RUSSELL PALMERRisk has been one of Russ Palmer’s favorite themes during his five eventful years as Dean of the Wharton [...]
September 1 1988 by Chief Executive
Risk has been one of Russ Palmer’s favorite themes during his five eventful years as Dean of the Wharton School of the University of Pennsylvania. “We can’t take people and make them risk takers,” says Palmer. “We can take people and give them some sophisticated techniques of how to go about it. We can give them the tools.”
Though the assessment of risk and opportunity-is something every CEO is familiar with, it has not usually been a notable feature of academe. Yet, Wharton, long known as one of the best schools for finance, has flourished and diversified under the leadership of Palmer, former CEO of Touche Ross International. Finance majors are now a minority; management claims twice as large a share of students and marketing almost equals finance today as a field of choice.
The entrepreneurial success of such prominent (and grateful) Wharton graduates as Saul Steinberg, Donald Trump and Ronald Perelman also has not gone unnoticed by students, or the press: “Wharton Reaches for the Stars” and “Their Eyes on the Main Chance” are titles of recent articles on the school’s new image under Palmer. But entrepreneurial glitter is far from the whole story of Palmer’s tenure at Wharton. He has brought strategic leadership to a venerable institution of solid reputation and limited vision. “He’s been making the right moves,” observes a professor at another top business school. “He’s got the confidence of the faculty and business, and the students like him.”
Wharton’s independent-minded faculty was a challenge for Palmer. “You’re somewhat suspect as a non-academic,” he says. “It takes a longer time to be accepted for what you are.” He never made the mistake of presenting himself as an academic (“That dog wouldn’t hunt!”), declaring that his job was “to lead in attaining our collective vision.” The faculty liked the “collective” part: they would be consulted-and are. He has initiated “internationalism” (advisory boards in Europe and Asia/Pacific), executive education (with a new conference center) and “Project 2000″ to determine what business will be like in the next century-and how to train people for it. However, the basics have not been neglected either: in five years, student applications have doubled, and funds raised have gone from $3.5 million in 1983 to more than $22 million.
Does Palmer miss the “real world” of business? Recently, he says, he returned to Touche Ross to visit some of his former partners. One of them asked, “Russ, what do you do now?” Palmer replied: “Well, let me tell you what I don’t do: I don’t worry about getting clients, or losing clients, or making money to pay partners, or getting sued in class action suits.” The partner looked at Palmer and said, “Oh, I see. You don’t do anything.” Not quite.
Bessel Kok wants chess to be as popular as tennis…and his company’s name to be as recognizable as that of, say, Bobby Fischer or John McEnroe. Kok is CEO of S.W.I.F.T., one of the fastest-growing communications companies in Europe. The Belgian-based firm, with annual revenues of $200 million, provides a telecommunications network for more than 2,000 banks in 64 countries, enabling them to transfer funds or send messages worldwide very quickly.
Kok, 47 years old, is also a confirmed chess lover and the largest corporate sponsor of the sport. “I’m a crazy chess player,” he says. “I would like to play often but I never have the time.” Perhaps that’s because he’s so busy organizing tournaments. Since 1986, SWIFT. has spent more than $1 million sponsoring three highly successful chess tournaments in Brussels.
At the Russian Tea Room restaurant in New York City earlier this year, the company sponsored a match between world champion Garry Kasparov and the top six American junior chess players, one of whom managed to defeat the champion.
In April of this year, too, Kok and his company organized and hosted the first Chess World Cup in Belgium, bringing together such noted players and competitors as Yasser Seirawan of the U.S., Anatoly Karpov of the USSR, John Nunn of * England and 16 other grandmasters. More than 7,000 spectators attended the event.
Kok’s coup de grace during the tournament was the staging of a spectacular “live” match on Brussels’ Grand Place (see photo), one of the most beautiful squares in Europe. With the S.W.I.F.T. flag flying high, actors dressed in medieval costumes played the parts of pawns, bishops, kings and queens. Real horses were used for the knights, while fes- tively dressed buglers loudly celebrated the taking of a piece. The event received extensive media coverage-just what Kok wanted.
Besides his love of the game, Kok began sponsoring chess as a means to polish his cornpany’s image; despite the firm’s reputation for high-tech efficiency, not much was known about its operations. “People weren’t sure whether we sold sports equipment or manufactured racing cars,” says Kok. “But now our secret profile has been demystified, and the company has gained a reputation for good organizational skills, professionalism and intelligence.”
S.W.I.F.T. has also received an award from the European Service Industries Forum for being the best-performing service company in Belgium. Even the Belgian king, Baudouin I, has visited the firm’s headquarters. Meanwhile, the 15-year-old company is expanding. From a handful of employees in 1973, it has grown to a workforce of 1,000 in Belgium alone. Its 16 foreign subsidiaries and branches include two firms in the U.S.: S.W.I.F.C.O. U.S. Inc. in New Jersey and, S.W.I.F.T. Culpeper in Virginia. Its board of directors is now chaired by W.R. Moore of Chemical Bank.
Kok has become friends with many of the world’s top chess players, who refer to him as “the godfather.” Last year, Kasparov even asked Kok for help in forming a grandmaster’s association; the GMA is based in Brussels, with Kok as chairman.
With Kok behind them, these grandmasters could be S.W.I.F.T.-ly successful in their plans.
If demographic projections of an increased elderly population are correct (individuals over age 65 will account for more than one-sixth of all adults by the year 2000), then Continental Health Affiliates -the nation’s fifth-largest provider of housing and services to the elderly-is poised for growth.
Continental, developer Forest City Enterprises, and Hyatt Corporation recently formed a limited partnership to develop and operate a 224-unit congregate-care facility (apartments for retired, elderly persons who no longer can, or want to, maintain their homes but aren’t yet ready for nursing homes) in Teaneck, New Jersey.
Under the terms of the agreement, says CHA’s CEO Jack Rosen, Continental retains an equity position of up to 30 percent. Rosen sold the property and plans for the site to the partnership for $4 million. “This is a first for Hyatt,” he says, and “we’re the perfect partner for them. We have the knowledge of how to house, care for, and service the elderly.”
Rosen, also chairman of Hazel Bishop (a cosmetics concern), says his success comes from his “ability to understand the senior market. American business has yet to learn that Americans are finding a new way to grow old.” Rosen is “secure as a businessman; he’s tough and knows what he’s doing,” says Forest City’s Ron Ratner.
When traveling, Rosen often pilots his own jet. In March he joined an interfaith delegation visiting Cuba. After meeting observant Cuban Jews who expressed a desire for Kosher wine to celebrate Passover, Rosen asked Castro for permission to fly the wine into Cuba. Castro asked Rosen to explain “Kosher” wine. Rosen did, and offered to send him a case. Castro agreed.
-Margaret Alison Hart