Mindy Herman once took a 50 percent pay cut to get her foot in the door.
Herman, W’82, president and CEO of cable network E! Entertainment Television, always knew she wanted to work in the entertainment industry. A TV and movie junkie as a child and young adult, she moved from Philadelphia to Los Angeles to get her MBA and law degree, thinking she would find a way to break into the business. But four years later, she’d settled somewhat comfortably into life as a young corporate attorney focusing largely on M&A work.
The turning point came when she called home to Philadelphia to share what she thought was great news with her parents: she’d scraped up enough money to buy a home in Malibu.
“I call my parents; I’m all excited to be a homeowner. And my mother, who is a very mild-mannered lady, tore into me on the telephone,” recalls Herman, 39. “She basically told me that I could be a corporate lawyer in Philly or New York, but I’d now bought a house — which meant I wouldn’t be coming home — and that I hadn’t done anything to attain my supposed dream of working in the entertainment industry. I said, ‘Whoa, this is not the call I was expecting.’ And so I did what any mature, seasoned lawyer would do when confronted by their mom. I hung up on her.”
But that Monday, Herman called a headhunter. And three weeks later, she had an entry-level legal job at Fox. At that time, in 1990, Fox was a young, vibrant company about to take off. “For someone who likes start-ups and loves deals, it was a great place to be. It was a Wharton case study a day and a great training ground — a place to really learn every aspect of the business. But it was touch and go to pay my mortgage — it took my whole first check and three quarters of my second check to pay it at the beginning.”
In the pages that follow, we talk about five such beginnings, continuing Mindy Herman’s story and introducing a handful of other remarkable women — Wharton alums all. They are a vastly different lot, which goes to show that you can’t predict success based on personality or background. Herman and Traci Lerner, founder of one of the nation’s most successful hedge funds, share intense personalities and a passionate love affair with their respective fields. M. Joy Drass, M.D., president of Georgetown University Hospital, is focused and logical, with a scientist’s mind. Ndidi Okonkwo Nwuneli, the baby of the group at age 26, is driven by a need to help her native Nigeria, a nation battered by corruption and poverty. And William Penn Foundation president Kathy Engebretson is a turn-around artist who finds nearly everything interesting.
Few would argue that women have made professional inroads as their presence in American organizations has become the norm over the past three decades. A survey by Catalyst Women, the New York-based nonprofit that studies women’s professional progress, found that the number of U.S. Fortune 500 firms with a female top earner increased by 54 percent from 1995 to 2000, from 29 women to 83, while companies with more than 25 percent female corporate officers rose 25 percent. But despite these increases, women still represent just 4.1 percent of top earners among Fortune 500 companies. Men hold an overwhelming 92.7 percent of “line officer” positions — those with profit-and-loss or direct client responsibility. And there are just five female CEOs in the Fortune 500 and nine in the Fortune 1000.
What kind of woman is able to buck the trend and rise to the top, or create something powerful from nothing? Some answers follow.
Mindy Herman, W’82
After joining Fox, Mindy Herman ascended rapidly, ultimately holding a number of senior-level posts. But it was in 1993, as senior vice president of business affairs at FX Networks, that she played a pivotal role in launching Fox’s first cable network. Herman was active in all areas of the new network’s business, including programming and strategic positioning, as well as in the launch of Fox Sports and Fox Television Studios. She joined E! in 2000 after a two-year stint at In Demand L.L.C., formerly Viewer’s Choice, where she served as president and CEO.
At E!, she’s taken on a burgeoning, 74-million subscriber entertainment news and lifestyle network. Since its launch in 1990, E! has seen a compounded revenue growth rate of 45 percent annually, while estimates of the company’s overall value have soared from $50 million in the early 1990s to more than $2 billion today.
There’s little doubt that E!, initially created in 1990 to replace the then three-year-old Movietime cable network, has gained credibility and viewer loyalty in recent years, with expanded programming and a stable of regular stars such as Joan Rivers and Howard Stern. Herman’s goal, however, is to create an entertainment-genre powerhouse with the clout of CNN or MTV. Her plans: launching four new networks over the next decade that will help broaden the assets of the private company, 80 percent of which is owned in a joint partnership between Comcast Corp. and the Walt Disney Co., and securing E!’s place in the Internet economy. While specifics are still under wraps, Herman says that all of the new networks will, like E!, focus on lifestyle issues. She’s also working toward significant international expansion, which she believes will be a key for continued growth.
Keeping a close eye on what the viewer wants, Herman says, is her greatest challenge, and much of Herman’s first year at E! was spent tinkering with programming. A slate of new shows reflects today’s grittier tastes without being salacious. “When NYPD Blue considered some very tasteful, story-driven partial nudity in 1995 there was an uproar,” she says. “Today, we’re putting people in tanks of rats on television,” she says, referring to the increasingly popular “reality TV” trend. “The subject matter has gotten a lot edgier and more aggressive.”
Even on the telephone, Mindy Herman’s strong personality is apparent. She is funny and at ease, and you can tell that she’s smiling most of the time. Herman doesn’t appear slick in any way — she calls herself a Philly Girl to the core — and she’s proud that she’s retained her down-to-earth nature and still risen to the top in Tinsel Town. She plays softball, reads historical non-fiction, and is a recreational sports fanatic who tries to get home each month to see her tight-knit Philadelphia family. A recent magazine article describes her office knick-knacks — framed hockey jerseys signed by players from the LA Kings and Philadelphia Flyers hockey teams, as well as a Wayne Gretzky helmet — as a bit incongruous for the office of the head of a television network devoted to Hollywood. “In this business, you tend to have to fit yourself into the mold, but I have tried very hard to still be the person that I was without having to become a slicker, more packaged, Hollywood version of me,” Herman says.
What Herman has that has set her apart is an addiction to the entertainment industry so strong that she has never resented working constantly, as well as an ability to “connect the dots and to see dots that others don’t see. The heart of what I like about business is the idea — coming up with the idea, the strategy, and figuring out the best way to execute that strategy,” Herman says.
Despite what looks like an effortless rise to the top, Herman initially had difficulty convincing the powers-that-be at Fox that she was more than someone who “went back to her office and drafted contracts all day.” Very early on, she knew that she wanted a broader operating role within the company, but couldn’t convince senior executives to think of her as much more than an attorney.
How did she break in finally? A key, interestingly, was her interest in sports. “Growing up as a kid in Philly, with the success of the Flyers and the Phillies winning the World Series and the Eagles making the Super Bowl, I was a sports junkie,” Herman says. “My dad has two girls, and I was the baby. He took me to a lot of games. When Fox started getting into the sports business, I was one of the people on the team. And it became pretty obvious to not only the people at Fox but also some of the folks in the league that I knew a lot about sports. That was one of the first opportunities where I could take more of a business role rather than a pure lawyer role and craft our strategy for getting into the sports business.” It also gave her the chance, she says, to “bond with the guys.”
Today, Herman is frustrated by the small number of women in senior television positions, particularly given the fact that the cable television business started out as a haven for talented women executives who were often overlooked by the major networks.
“A lot of women were able to get their start in the cable business because it wasn’t viewed as a multi-billion dollar business. But over the years, it turned out that those little cable channels ended up with valuations of $3-, $5-, $10-billion dollar enterprises.” The result: the business caught the eye of talent — often male — from the major networks. Women, to some degree, have been nudged aside.
What does Herman suggest to alums interested in the entertainment field? First, she says, be willing to accept an entry-level post. “Once you’ve gotten in, just work really hard. Be smart; get to know people, and always have a point of view.”
Looking back, Herman believes this willingness to speak up, even when her ideas were wrong, was critical. “There are a lot of people who can do analysis, while other people make the decisions and craft the strategy. You should go in not only with your analysis but also with your view of what to do with it. You have to speak up, and you have to do it with a thoughtful point of view. It doesn’t necessarily mean that it’s the right point of view, but you have to be willing to give your opinion.”
Kathryn Engebretson, WG’83, PhD’96
Kathryn Engebretson knew the City of Philadelphia was hemorrhaging when she agreed to become its new treasurer in 1992. What she didn’t know was how bad things really were.
She quickly found out. Her first day on the job, Engebretson, then 34, learned that colleagues were in court that morning scrambling to postpone a pension payment. If they failed, the city’s thousands of employees would not get paid that Friday.
Later that day she joined another group of colleagues gathered to project the city’s anticipated revenue for the week. The group, which met every Monday, then sifted through a massive pile of outstanding invoices, deciding who would get paid, and who would not.
“It was one thing after another,” Engebretson recalls. “I thought, ‘Oh, my God.’ Certainly I expected it to be bad. But I never thought it could be that bad. I was really overwhelmed. At the end of the day, I was so tired,” says Engebretson, today the president of the William Penn Foundation.
In the early 1990s, its population and workforce declining and taxes rising, Philadelphia’s bond rating slipped to junk status. Lenders and guarantors refused to assist the city with routine borrowing necessary to meet expenditures until tax revenues could be collected. Newly elected mayor Ed Rendell, facing a daunting $153.5-million budget deficit, recruited Engebretson from Lehman Brothers in New York to play a pivotal role in the City’s fiscal recovery.
In the two years she spent as city treasurer, Engebretson led a turnaround of the city’s financial ratings via a massive $3.3 billion in financings, $2.5 billion of which were refinancings that resulted in $110 million in savings. She also revamped the city’s investment policy, guided new investment legislation through City Council, and redirected investments to private-sector managers where possible. Today, Philadelphia’s financial about-face is often cited as one of the most remarkable turnarounds in urban history.
For Engebretson, the post was without question the most tumultuous she has ever held. “It was a really hard job in the sense that every day there was a crisis,” she says. “But I was working with great people, and the mayor was so positive and did have a plan. If I would have had to do it all myself, I probably would have been almost paralyzed by fright. In a way it was great because since then, not much worries me,” she adds.
Engebretson, now 45, hasn’t followed a focused path based on a singular passion. She worked in investment banking at several different firms on the East Coast and the Midwest. After serving as treasurer of the City of Philadelphia, she was vice president for finance and ultimately chief financial officer of the University of Pennsylvania. She even spent two years at a Washington, DC-based dot-com before becoming the William Penn Foundation’s new president this year. “Yes, I’ve done a lot of things,” she says, laughing.
The link in each instance, though, is the fact that Engebretson was aggressively recruited for nearly every post she’s held. Known for her intelligence, collegiality, and ability to solve tough problems, Engebretson hasn’t ever really had to look for opportunities.
She became president of the William Penn Foundation, a major philanthropic organization with about $1 billion in assets, through a typically circuitous route. After sitting on the foundation’s board for a number of years, the foundation’s leadership asked whether she’d consider taking over.
The timing wasn’t great. Engebretson had just bought a house in Washington, where she’d moved in late 1999 to serve as CFO of BET Interactive, a company that operated two web sites targeted to African American and urban communities. “But on the other hand, there’s no job like giving away money.” She also liked the Foundation’s exclusive focus on the Philadelphia region — “The endowments are sizeable enough that we really can have an impact on the area” — and felt a real affinity for the understated, civic-minded Haas family, which established the foundation in 1945 and has remained very active in its workings.
And so Engebretson decided to accept the board’s offer. She put her Washington home up for sale and moved back to Philadelphia.
At the William Penn Foundation, Engebretson has very little to fix. After just recently completing a major strategic planning process — which, as a board member, she was actively involved in — the organization, she believes, is on the right track. “There’s a lot going on here that’s very positive,” she says. “It’s wonderful to not have to turn things on end.”
That being said, Engebretson has some very definite plans. She worries about the Philadelphia area and the reality that the region has fallen far behind most of the nation in two critical areas — population and job growth. Recent data shows that the region’s population has grown just 6 percent from 1970 to year 2000, one of the lowest growth rates in the nation. By comparison, Atlanta had 170 percent growth, and Washington, DC grew by 70 percent. Employment growth also has lagged.
Meanwhile, suburban sprawl is rampant. Engebretson cited one study that revealed that developed land grew 33 percent between 1982 and 1997, but the region’s population increased by just 3 percent. “There’s a little bit of a sense of complacency here,” she says. “I don’t think many people who live outside of the city realize that our region as a whole is not doing very well.”
Other issues Engebretson hopes to tackle with targeted grants include urban redevelopment, school readiness and other early childhood health and education issues, youth violence reduction, watershed and open space preservation, and sustaining and growing the region’s arts community.
Engebretson, the eldest of three children, was born in the Midwest and grew up in a middle-class family. “My parents were supportive, but neither of them was an overachiever, and none of us was pushed,” she says. Education and academic achievement were highly valued in her extended family — there were many academics, ministers, and teachers — as well as volunteer work and the “helping professions.” This emphasis on contribution is a reason that Engebretson, who is one of the few members of her family to enter the business world, has always had an interest in the public sector.
She’d never heard of investment banking when she entered Wharton as an MBA student in 1981, after earning her B.S. in biology and political science at Luther College in Iowa, then an M.S. in statistics from the University of Minnesota. But two years later, she entered the investment-banking world as an associate in public finance at Dain Bosworth in Denver. But she missed the East Coast, and in 1984 decided to take a job at E.F. Hutton, which eventually became Lehman Brothers, where she began as an associate and became a vice president in the public finance department. While at Lehman, she also began work on her PhD at Wharton, and it was reportedly a Wharton professor on Mayor Rendell’s transition team who recommended her to help shape the City’s recovery.
She cites her time as Philadelphia treasurer as the most memorable of her entire career, during which she learned vital lessons — lessons that she’s retained throughout her career and personal life. In particular, something she calls learning to “satisfice” instead of always finding an optimal solution, has become a philosophy that has carried over into virtually every aspect of her too-busy life. “Doing everything perfectly is not a feasible option,” she says. “You need to decide which things are really most important to you and go for the optimal outcomes. For everything else, a satisfactory outcome is probably sufficient.”
In all, she spent two years in city government, after which time she felt that “most of the do-or-die work had been done.” In 1994, Engebretson moved on to Miller Anderson & Sherrerd, a Conshohocken, PA-based institutional assets arm of Morgan Stanley, where she went on to become a principal. While at Morgan Stanley, she worked on a number of outside consulting projects, including a pooled loan program for the Historically Black Colleges and Universities, a municipal finance program for Romania, and a collaboration with the World Bank to develop a market for South African municipal bonds.
It was a busy time for Engebretson, whose work routinely took her across the U.S. and often abroad. By all accounts, her life was full.
But in January 1996, she read a New York Times article about orphanages in China. The article described the often-deplorable conditions children in China are subjected to, and told of the particular problem of baby girls being abandoned. “I was reading it, and I said to myself, ‘Well, I could adopt a child.’ ” She went to an information session, was intrigued, and decided to keep the process going. About this time, in anticipation of her new charge, she decided her jet-setting lifestyle should change. She joined the University of Pennsylvania in 1997 as vice president for finance, a move she felt would provide professional challenges and personal stability.
In February of 1997, after a year of paperwork, home visits, and other formalities, Engebretson got a letter in the mail with a photograph of a baby girl. A couple of months later, she flew to China and brought home her daughter, Emma, now five. “It’s been great,” she says. “I’ve never regretted it.”
Since Emma’s adoption, however, Engebretson has, like most single, working mothers, struggled to achieve a balance between her life at home and work. “I’ve personally never been very successful at this,” she says. “But it’s one of my major personal goals today.” Engebretson loves to exercise and play the violin and piano, but rarely has time. She does try, though, to regularly attend theater and music performances, particularly ones that Emma can attend.
Her most recent move from the Internet world to William Penn also has to do with Emma. Engebretson hopes for more predictable hours and believes she’s found a professional home where she can put down some roots. “It’s very easy to work too much. And when major relationships and/or children become a part if your life, the first thing that goes is your personal time — time for your individual relationships with others, time to do the things that make you feel relaxed and happy. I would encourage others to make personal time a priority,” she says.
Engebretson is both practical and philosophical when asked what other advice she would offer to those interested in how she has come so far. “There is no substitute for hard work, especially at the beginning of your career. Getting along well with others and being known as a helpful, cooperative person who does quality work can go a long way in building a career.
“I also believe that most of us spend too much time thinking about the future and don’t relish the present,” she says. “Part of this has to do with the rapid pace of society. I think we would all do well to focus a little more on the present instead of thinking only about how what we do in the present will affect our future.
Two of Traci Lerner’s four children have asked her, independent of the other, why she’s always running out the door to go food shopping. Each time she has looked at them, mystified, and said, “I’m not going food shopping. What are you talking about?” Their reply: “But you always say you have to go before the market opens.”
The market Lerner is running out the door to, of course, is not the supermarket.
Lerner has worked until the day she delivered each of her four children and immediately after their births. So it’s not surprising that the founding partner of Chesapeake Partners L.P., a Baltimore-based hedge fund, has delegated the food shopping. But Lerner, who has learned to live on very little sleep, also eats breakfast and dinner each day with her kids and her husband Mark, W’80/C’80, and has never missed a play, concert, or parent/teacher conference.
Somehow she manages her brood — two girls, Stephanie, 13, and Sara, 4, and two boys, Coby, 10, and Tyler, 6 — while also managing a $1 billion fund, widely regarded as one of the nation’s most successful. In the ten years since its founding, Chesapeake Partners L.P., launched with $4 million under management, has generated an annual net return of 22.1 percent. By comparison, the S&P 500 enjoyed a 10.9-percent gain during the same time period.
Lerner’s story is all about the unusual. A precocious teen, she went to college before graduating from high school, earning her Wharton degree at age 20. She grew up without her biological father — he died when she was three — and with a mind for math. She didn’t go to Wharton because she loved or was even all that interested in business; it was more that she was good at and fascinated by quantitative analysis.
Then there’s her day-to-day life. Lerner, who says she’s “focused and intense,” is up at 5, works from 5:30 to 7, gets her kids off to school from 7 to 8, then heads to the office. She typically leaves each day by 6:15, is home five minutes later to have dinner with the family, supervises homework and gets the kids to bed, then goes back to work at her home office, often until 1 a.m. “I’ve been known to tell Mark that you can sleep all you want when you’re dead,” laughs Lerner, 41. The Lerners do have full-time childcare during weekdays but take over the caretaking when they come home and handle doctor’s appointments and school activities themselves. A team approach, with Mark an equal participant in all aspects of caring for the couple’s four children, is the only way Traci has been able to carry on with her successful career, she says.
“There are no lines drawn between us as partners and no real gender roles,” she says. “It is highly unusual. There’s nothing Mark or I wouldn’t do to help the other with whatever is on our plates, and my children are fortunate that they have two equally involved parents. Mark and I really share the parenting of our children, which is why my children are not hurt by my working.”
If one of the kids has an early morning doctor’s appointment, Mark is likely to take them. Once the market opens and settles into a pattern, Traci handles doctor’s appointments. For school functions, the couple often divides up an event: for a recent middle school open house, Traci attended the first 90 minutes, and Mark the last. For assemblies, plays, and other performances, both parents generally find a way to be there, though Lerner admits attending plenty with cell phone and Blackberry in tow. “There’s nothing more important to us than our children. The one thing I’ve been able to prove to myself is that you can have kids and somehow have a real career as well. Mark and my kids are the world to me. What I hope I’ve brought to Chesapeake is the family nature of who I am.”
Chesapeake is similarly orchestrated. Mark manages operations, while Traci runs the portfolio. “Part of what’s made it successful is that I haven’t had to deal with the business end of the fund. Often, the portfolio manager ends up trying to do everything, and the investment focus is lost,” Lerner says.
Perhaps what’s most unusual about Lerner is her wish to maintain a low profile. Lerner was very reticent about being interviewed for this article and has never sought exposure or publicity for herself or her firm. “We live very quietly,” she says. Chesapeake doesn’t have a website or even a brochure; its marketing has been entirely via word of mouth. “We have opted to stay below the radar screen. I just don’t have the ego for it and didn’t want to call attention to what we were doing. We had some very good investors early on, and this is very much a word-of-mouth business. We haven’t had the need to go out there and make a lot of noise.”
Lerner began her career at Citibank’s analyst training program in New York, then went to Dillon, Read, where a man who would become her mentor hired her to work in the research department of the risk arbitrage department. “I didn’t even know what risk arbitrage was,” she says.
Risk arbitrage, an example of something called event investing, involves trading securities of companies when they are in the midst of some major event — a takeover, management shake-up, or bankruptcy, for instance. This highly charged investment strategy — “There’s a lot of yelling and screaming,” says Lerner — became her passion. In 1984, two years after joining Dillon, Read, she was named a vice president. A year later, Lerner was asked to manage all risk arbitrage research and was named a senior vice president. In 1990, she was named the head of the risk arbitrage department, overseeing all research and trading.
But less than a year into her new post, with two toddlers at home, Traci and Mark Lerner decided it was time to leave New York. “I didn’t want to raise my kids in New York as it was ten years ago,” Lerner says, “and I didn’t want to commute.”
She decided to start her own hedge fund in Baltimore in 1991 with one other colleague from Dillon, Read, while Mark worked to complete a leveraged buyout he was immersed in. About six weeks after starting Chesapeake, she asked Mark to put his deal on hold and work with her for six months, just until she’d gotten the business off the ground. “But we starting working together and said ‘Gee, this is everything we wanted. We’ve got the quality of life, we get to spend more time together, and we’re having a great time doing it,’” Lerner says. The upshot: Mark never left the business.
Chesapeake, like her early work in risk arbitrage, focuses on event-specific investing. At any given time, the firm holds a portfolio of about 75 different investment opportunities from a wide range of situations, geographic locations, and industries. Lerner says her strategy is different from both market-biased investment managers, who try to predict the future, and market- neutral investors, who attempt to structure portfolios to weather market fluctuations. “We research a large universe of events and select situations that we think will evolve a certain way over a finite period of time, regardless of the movement of the equity or debt markets,” she says.
Mergers and acquisitions are Chesapeake’s largest investment category, and Lerner believes the record number of IPOs during the past several years, as well as companies’ need to fuel growth and profits via acquisition, will stoke the transaction pipeline with activity for many years to come. Certain sectors, such as health care, communications, and financial services, will also continue an already strong wave of consolidation, she says. “We certainly review and participate in lots of short-term situations,” Lerner says. “But a strength of ours is our willingness to be a patient, longer-term investor.”
Lerner says she is “a nut about what I do. It’s just fun. It’s different every day, it’s dynamic, it’s challenging, it’s exciting. You couldn’t possibly get bored. It’s a fascinating challenge to try to figure out the puzzle. Moreover, I think I am a better parent going to work. I think I would drive my kids crazy if I were home with them 24 hours a day — or so I rationalize.”
Joy Drass, M.D.,WEMBA’91
Joy Drass likens her current position as president of Georgetown University Hospital to triage.
A critical care physician who practiced in a surgical trauma unit for 13 years, Drass, 54, is good at quickly assessing what needs to be done to save a patient, then methodically performing the tasks most likely to ensure survival.
Her charge at Georgetown, where she attended medical school 20 years ago, is not dissimilar. Georgetown, like the Hospital of the University of Pennsylvania and myriad other teaching hospitals across the nation, is struggling to survive. In July 2000, the university sold its ailing teaching hospital to MedStar Health, a Columbia, MD-based nonprofit organization that owns hospitals and other health care services in the Washington-Baltimore area. In the three years before MedStar stepped in, the hospital recorded losses of more than $200 million.
Drass, who played a key role in negotiating the agreement, came to Georgetown from the Washington Hospital Center, also owned by MedStar, where she served as vice president for professional services and as associate medical director. “If you work in a surgical intensive care unit, there’s no environment in medicine, with the exception of maybe an operating room, that’s more uncertain,” she says. “There are a lot of skills that I learned and developed as a critical care physician that have an absolute application in a stressed organization. I call it triage, but others might call it prioritizing. It has to do with being able to look at a situation and quickly set goals to get from point A to point B, build team-work, and develop structure to support people when they are in an uncertain environment.”
For Georgetown, getting from point A to point B meant focusing on four key goals. Drass needed to stabilize operations, improve patient customer service, improve revenue collection, and develop a long-term plan to ensure the hospital’s survival. Early clinical changes included strengthening the hospital’s cardiovascular surgery capabilities and trying to set the hospital apart from peers by developing specialties in very complicated procedures such as organ transplant surgery and high-risk births. Employee focus groups, town meetings, and an aggressive recruitment program were also put into place.
After a year and a half on the job, Drass seems to have made some early inroads. For the first six months of the year, the hospital’s in-patient volume increased 8.5 percent compared to the same period in 2000. Emergency room patient numbers rose by 16 percent for the same period. Employee turnover has also dramatically decreased. Nursing turnover fell from 25 percent to 6 percent, numbers that are critical to improved patient care, Drass says.
“I never have a dull day. It’s been our transition year — a time for us to gain the confidence of the physicians and employees who became a part of MedStar and for us to stabilize the hospital and begin to rebuild. It was a big change for this hospital,” Drass says.
Indeed, for teaching hospitals such as Georgetown, transitioning from the more methodical, consensus-driven pace of university governance to the more business-driven corporate model is often a struggle. Physicians, skeptical of what they perceive as a less patient-centric approach to clinical care, are typically wary of new leadership, particularly given the health care industry’s tumultuous state. In recent years, several well-regarded medical centers have been repeatedly sold and, in some cases, their for-profit parent companies forced into bankruptcy — a reality that also heightened staff and physician anxiety.
Drass admits she faced a lot of “wait and see” when she became president at Georgetown. “But the employees and physicians were at least glad that they knew who their new partner was going to be,” she says, after years of uncertainty and well-publicized financial difficulty. “The uncertainty had come to an end, and that offered some stability. With the transition finally concluded, I think there was at least a sense of relief.”
Internal communication, she says, was every bit as important as stabilizing the hospital’s operations. “A key message we keep stressing is that this is a long-term partnership. A big part of the first year was reassuring the staff that MedStar wasn’t just going to vanish after two years.”
What’s Drass’ take on the health care industry’s ongoing turmoil? Better technologies have brought more sophisticated but costly treatments that consumers want access to. The cost of health care, thus, just keeps rising. Insurers and consumers want costs to stay low, but hospitals need to recoup their ever-rising costs. Even managed care, once thought a long-term solution, has not been the panacea many industry experts predicted. “What all this creates is a very turbulent environment for the industry,” Drass says. “There are constant renegotiations about what is going to be paid for services, which constantly squeezes the hospital in its attempt to provide that care.”
University hospitals, carrying the extra burdens of research and teaching and often based in urban areas where populations of uninsured are higher, are feeling the pinch more than their peers. “And many have governance structures that don’t allow them to respond to what’s happening in the market on an equal footing with other hospitals,” Drass says.
What needs to happen? Drass thinks teaching hospitals will have to create and adopt new organizational models to survive. At Georgetown, she recently participated in such an effort, devising a long-term partnership between the hospital and the university. Under the terms of the agreement, Georgetown University maintains the hospital’s academic and research enterprises, while all clinical operations — the hospital, the clinical faculty, and the community practice network, became a part of MedStar. “One of my hopes is that the model that we’ve just put in place with the MedStar acquisition of Georgetown will be one of the models that survives long term and that other hospitals can use,” Drass says.
Drass grew up in a tiny town near Altoona, PA, with a father who “thought women could do anything.” An avid skier, she has three grown children, 32, 30, and 24, and never took a hiatus from her career.
She graduated from Georgetown University Medical Center in 1973, then interned and trained at Washington Hospital Center. She loved the Washington area and decided to stay there, taking a job as a critical care physician in the surgical intensive care and trauma unit at Washington Hospital Center, where she remained for 12 years. She became a clinical leader at the hospital, serving as deputy director of the surgical critical care unit and trauma unit and developing its emergency helicopter program as well as playing a major role in overhauling the emergency services in general, which became one of the nation’s best.
But after more than a decade of the long hours and crisis-driven nature of a trauma center, Drass began to feel that she needed a change. The growth of HMOs was another factor in her decision. “I realized that things were going to change, and if physicians didn’t participate in trying to help make that transition, it wasn’t going to be good for patients . . . . And when you work in an ICU in a trauma unit, you work 24-hour days, and you work weekends. It was very intense and very demanding from a physical and an emotional stand-point. I think I realized that this wasn’t a career I could do until I retired. The move to Wharton was to help me transition into the second half of my work life.”
Drass graduated from Wharton’s executive MBA program in 1991. “It sounds funny, but I wanted the language,” Drass says. “The health care arena during that period of time was changing dramatically. But physicians were talking medical talk, and administrators were talking business speak. They couldn’t translate for each other, and they really needed to be collaborators and colleagues, if they were going to provide the best care possible for patients in an environment where resources were being constantly constrained. My MBA gave me an understanding of the business side and the language so that when I sat down at the executive level, I could translate from the medical side the important points that related to what we needed to do.”
After earning her MBA, Drass went back to Washington Hospital as a member of the executive staff of the hospital’s new president and has remained a health care administrator ever since. It’s a decision she doesn’t regret. But Drass freely admits she misses practicing medicine.
“I miss the one-on-one interaction with patients and families. When you’re in an ICU, you are privileged to have very close relationships with patients and families. So you have the satisfaction of that, and you also have the satisfaction of seeing the results of your intervention in a relatively short period of time,” she says. “As a business leader, you are more removed from that. It’s moving from taking care of a single patient to taking care of a population of patients. But it’s very important that Georgetown survive. Georgetown as an institution, and the employees and physicians here, will save a lot of lives.”
Ndidi Okonkwo Nwuneli, W’95
It was during the summer of 1998 in Hebron in the West Bank that a pointed question from a Palestinian entrepreneur indelibly defined Ndidi Okonkwo Nwuneli’s future.
She was consulting for the Center for Middle East Competitive Strategy while getting her MBA at Harvard when an entrepreneur she was advising asked her, “Why are you helping us in our country when yours is such a mess?”
“I think this was a defining moment for me,” says Nwuneli, a native of Nigeria and the founding executive director of the FATE Foundation, a two-year-old nonprofit organization created to foster wealth in Nigeria via entrepreneurship.
Nwuneli returned to McKinsey, where she had begun her post-Wharton career, for seven months after graduating with her MBA. But she continued to think about Nigeria, a nation torn apart by government corruption and poverty, and how she could use her education and experience to help her people.
A phone call from Fola Adeola, managing director of Nigeria’s Guaranty Trust Bank whom she had met after a speech he made, gave her a place to start. Adeola shared Nwuneli’s view that wealth creation through entrepreneurship, rather than programs designed to alleviate poverty, would help Nigerians improve their lives. He wanted to target Nigeria’s recent college graduates, 70 percent of whom are unemployed, with a nonprofit foundation that would provide the skills, tools, networks, and financing necessary to ultimately start thousands of new businesses capable of employing tens of thousands of Nigerians.
Nwuneli, excited by the prospect of returning to Nigeria to lead a project she believed could help thousands of Nigerians, pulled together a strategic plan outlining how FATE could and should evolve. Shortly thereafter, Nwuneli became FATE’s first executive director. She resigned her post at McKinsey, moved back to Nigeria, and founded FATE in March of 2000.
A developing country, Nigeria faces massive hurdles and societal problems. Per capita income is less than $300 per person, and 69 percent of the population live on less than a dollar a day, despite the fact that, as Africa’s leading oil-producing country, Nigeria produces more than 10 percent of the oil used in the United States. “It’s a very corrupt country, and very little trickles down to the masses,” says Nwuneli. In the early 1990s, massive government spending ballooned the budget deficit. Interest rates and inflation soared, and more recent government efforts to reduce the county’s dependence on oil exports and sustain noninflationary growth have failed, in large part because of endemic corruption.
Nigeria’s shrinking economy and dependence on oil exports means that very few jobs exist, even for Nigerians with college degrees. “This is why crime and prostitution rates are increasing in Nigeria,” Nwuneli says. “We have all these recent graduates who feel that they have skill, and relative to everyone are actually quite privileged. But they still can’t get jobs. So you have all these people sitting around idle,” she says. While governments of other developing countries have recognized small business development as one way to improve economic growth, Nigerian initiatives have instead focused on very small, “micro” entrepreneurs in rural areas, leaving the country’s recent college graduates with few options.
Nwuneli and Adeola hope to change this. With the help of donors, including the Seven-Up Bottling Company, the Ford Foundation, and Arthur Andersen, Nwuneli and the FATE staff created three programs. The core program, The FATE Programme for Aspiring Entrepreneurs, combines a five-month educational program with mentoring and a financing support plan for recent graduates.
Three classes have now graduated from the program, and Nwuneli has learned some critical lessons along the way. “We found with our first class that despite the fact that many people are unemployed, they are not necessarily motivated to improve their situations,” she says. Fifteen of the program’s initial 20 students (190 applied for admission) graduated, but only four businesses got off the ground, and problems such as spotty attendance and tardiness were common.
“What we saw was that we had to get tougher with the standards,” she says. FATE officials tightened admissions standards, forcing applicants to take an examination, write an essay, and come for an interview. Once accepted, students were also expected to attend classes regularly and on time. “When people were late for class, we locked the door. Participants who missed consecutive classes were asked to leave the program,” she says. “We are trying to teach them that starting a business requires discipline.”
The tougher standards paid off. Of the second class, 20 of 33 graduates have started businesses. The new companies range from an Internet café to a textile business. “We have also held two business plan competitions and two investors forums to showcase the business ideas that our entrepreneurs have generated and to introduce them to investors,” Nwuneli says. Aspiring Entrepreneurs are given access to a computer center, business library, internship program, and a consulting service staffed with 200 volunteers. The third class, which graduated in December 2001, had 69 people enrolled from an applicant pool of 450.
Two other programs include a year-long course for emerging entrepreneurs, which offers monthly workshops, assistance in securing bank loans and networking services, and a monthly speaker series spotlighting successful Nigerian entrepreneurs. “It’s one thing to start a business,” Nwuneli says, “but it’s tougher to keep it alive and successful. Nigeria is a very difficult place to become a successful entrepreneur — the red tape and government hurdles are incredible. It’s great to hear from people who have persevered and succeeded.”
An incubator is also planned to overcome another obstacle potential Nigerian entrepreneurs face: renting office space often requires tenants to pay two years of rent upfront. “There is no credit system, and so no entrepreneurs, unless they have a lot of money, can actually start up very successfully on their own,” Nwuneli says. The incubator will provide office space, computers, marketing support, accounting support, water, and electricity (since most Nigerian entrepreneurs must also buy generators to provide their own).
“A benefit of being a nonprofit is that you can get a lot of support from the private sector,” Nwuneli says of the incubator. “Companies will donate computers and office space. One thing I have gained from my education and nonprofit work in the United States is that people will support a great cause once you demonstrate credibility.”
Nwuneli grew up in a middle class home in the city of Enugu. Her father, a pharmacology professor at the University of Nigeria’s medical school, is a Nigerian native. Her mother, an American, teaches history at the university. Nwuneli’s parents, whom she says were “a huge influence on my life,” met at Cornell University in the 1960s. “They have always pushed me to be the best that I can be and to give back to society,” she says.
Nwuneli graduated from Wharton with honors when she was 20. She went to work as a consultant for McKinsey in Chicago and South Africa, serving Fortune 500 companies in the retail, insurance, pharmaceuticals, and other industries while volunteering for several nonprofits. She enjoyed her consulting work, but ultimately felt there were too many variables that she couldn’t control. “That’s why I love running my own organization,” she says. “I can control a lot more. I can ultimately do more.”
Newly married, Nwuneli is in the process of moving back to the United States to join her husband while he attends Harvard Business School. While back in the States, Nwuneli will head FATE USA and work to galvanize the resources of Nigerians and friends of Nigeria in the U.S. to support Nigerian entrepreneurs. Though she remains actively involved in the organization and plans to return to Nigeria with her husband after he completes his MBA, Nwuneli still views the change as a tough but important life decision.
“I believe that establishing FATE was one of my callings in life, and now I have to leave the country,” she says. “But I feel strongly that being in the U.S will give me another platform. By helping establish FATE USA, I feel sure that I will be able to strengthen the overall organization and ultimately be in a better position to support economic development in Nigeria.”
Wharton Women in Business: Building Networks
By Nancy Susan Perloff
This year, the Wharton MBA Admissions Office reported a record-breaking number of women applicants and matriculants. Wharton women make up more than 30 percent of the student population (both undergraduate and MBA). All totaled, there are more than 14,000 Wharton alumnae worldwide.
That’s quite a networking potential. It is no surprise, then, that this year’s Wharton Women in Business (WWIB) conference focused specifically on networking. The conference, which brought together Wharton students, alums, and guest speakers from diverse industries, was held in November to coincide with Penn’s “125 Years of Women” celebration.
Jennifer Beachell, WG’02, co-president of WWIB, says, “We are aware that we have filled ‘white space’ in the marketplace. Women have different choices to make than men. These issues get old, but they’re still there.”
Susan Ciccarone, WG’03, co-president of WWIB, acknowledges that women struggle with whether there’s a need for a women’s organization and conference. “One reason we feel there is,” she says, “is that when we go out into the business community, many of us will go into male-dominated companies and fields. We are building a network at Wharton that extends beyond the two years we’re here.”
What’s so special about networking, anyway?
Ann-Marie Corner, WG’89, who received the 2001 Kathleen McDonald Distinguished Alumnae Award at the conference, knows about networking. She is the founder, president, and CEO of Biosyn, a drug-development company focused on products for preventing and treating infectious disease. She also co-founded the Women’s Investment Network (WIN), which provides networking opportunities, helps establish mentoring relationships, and introduces members to sources of investment capital. “By bringing female entrepreneurs together,” she says, “we learn from one another’s experiences, increase the size of our investment networks, and provide support to help our businesses grow and become hugely successful.” When WIN gets involved, many people win. Janet Hanson, the conference keynote speaker, is founder and CEO of Milestone Capital, which manages assets for major corporations, governments, family businesses, and other large institutional investors. But that’s just her day job. Hanson also founded 85 Broads, a global, independent, online network of more than 1,200 female current and former Goldman Sachs professionals. (Hanson earlier spent 14 years at Goldman Sachs, whose Manhattan address, 85 Broad Street, inspired the name of the network.)
Hanson offered several tips to students, emphasizing that women should support other women. If you become the Queen Bee, she says, use your power to help other women: “You belong in the lives and Rolodexes of other women and men, whom you can support and encourage as you gain status and strength.”
Not that it’s easy, though. Hanson says most large firms today have formal mentoring programs “which don’t work, for the most part, because they assign a mentor to you without knowing if there’s any chemistry. Since you work in a high- octane atmosphere and you’re focused on your job, you have little time for networking outside your immediate area.”
To break that mold, WWIB and Hanson have formed a co-mentoring venture between female Wharton MBA students and 85 Broads. A similar venture has already found success at other leading business schools.
Ciccarone says that the program will be mutually beneficial. “When we start co-mentoring with 85 Broads, we can learn from them, sure, but they can also learn from us, especially in areas of technology.”
Beachell, too, says it’s critical to give back. Though she hasn’t had the opportunity to “mentor up,” Beachell says, “When my mom calls me for computer help, it teaches me that learning is ageless.”
Of course, mothers often make excellent mentors, too. Hanson’s constant traveling companion, who listens to lectures and interviews, is her 13-year-old daughter, Meredith.
Ann-Marie Corner agrees. Just over a decade ago, the Welsh-born Corner graduated from Wharton and began Biosyn, but it wasn’t an easy start. “I’m risk averse. I never wanted to be an entrepreneur. I had no experience of corporate life – in fact, I’d not even worked in a company before. I knew absolutely nothing about drug development, and I had passed accounting and finance by one point. At that time, Biosyn consisted of me in a closet-sized office, a part-time Penn student, 10 credit cards, and $20,000 in the bank. But I had a burning desire to do something for myself, and I never for one minute doubted that I could do what I set out to do.”
Where did that burning desire and lack of self-doubt come from?
“My Mum always told me that perseverance and determination are two great character traits,” she says. Pass it on.