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S U MM E R 2012

G ra d ua t e S ch o o l o f m a n age m e n t

Innovator

Eurozone Crisis Up Close

Moneyball Hits a Home Run

Alumnus of the Year

Curing the U.S. Health System

MBAs on the Ground in Milan and Istanbul

Professor Shannon Anderson on A’s Lessons of Value Creation

Sacramento is Superhero City for Entrepreneur Mark Otero

Kaiser Permanente’s Bernard Tyson Calls for Care Delivery Reform


Innovator

SUMMER 2012

9

U C Dav i s G ra d uat e S cho o l o f m a nage m e n t

C ONTENTS C OV E R S TO R Y

2 I Our Global Trailblazers

5 I Want to Fight Poverty? Give Someone a Stage 6 I MBAs Experience Eurozone Crisis Up Close F A C U LT Y FO C U S

8 I Emerging Markets Foretold Financial Crisis

9 I Moneyball Hits a Home Run

10 I “Normal” Organizational Wrongdoing DI S TIN G U I S H E D S P E A K E R S

17 I Amory Lovins Says Farewell to Fossil Fuels 18 I Patagonia’s Prescription for a Healthy Planet 19 I Bernhard Tyson Offers Cure for Health Care

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A L U MNI S P OTLI G H T S

20 I Peter Buggy Charts Healthcare Strategy 21 I New Ventures: Revolights and Ruhstaller S P E C I A L S E C TION

NetWorks Newsletter: Child Family Institute for Innovation and Entrepreneurship S C H OOL N E W S

22 I Big Bang! Business Plan Competition

24 I Alumnus of the Year Mark Otero 26 I Student Scholars Honored

28 I MBA Ranked among Best in U.S. 17th Year 29 I Orlando Harris Brings Corporate Relations to Next Level

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30 I Will Snyder Leads Master of Professional Accountancy 31 I Meet Bill Sandefer, Lana Wickliffe and Leigh Ann Hartman B E Y OND C L A S S

32 I Business with Buffett

33 I Ignite Sparks Student Entrepreneurship 34 I GoodKoz Wins Walmart Challenge 35

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S T U D E NT S P OTLI G H T S

38 I N E W S TI C K E R IN A P P R E C I A TION

41 I Update: The Campaign for UC Davis

42 I Our Top All-time Donors

43 I Thank You: Dean’s Advisory Council and Business Partners 44 I Craig Hall Redefines Making a Difference

45 I

C L A S S NOT E S

22 Graduate School of Management

Dean

University of California, Davis One Shields Avenue Davis, CA 95616-8609 (530) 752-7362

Steven C. Currall

innovator@gsm.ucdavis.edu

Current and back issues of the Innovator are available online. www.gsm.ucdavis.edu/Innovator

Associate Deans

Hemant Bhargava Paul Griffin Assistant Dea n – Student Affairs

James R. Stevens

Assistant Dea n – Development & External Relations

Judy Nagai Managing Editor

24 Associate Editor

Photography

Printing

Marianne Skoczek

Scott Braley Karin Higgins Gregory Urquiaga T.J. Ushing The GSM Community

Dome Printing

Assistant Director of Marketing and Communications

Timothy Akin

Contributing Writers

Senior Director of Marketing and Communications

Joanna Corman Karen Nikos Robert Preer Alex Russell

Design

Page Design Group

Printed with vegetablebased inks on paper manufactured from 30% post-consumer waste recycled fibers and sustainably managed forests.


China 2.0

Spreading our International Wings

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ne of my key strategic objectives for moving the School forward is to strengthen our global footprint. Having moved to Davis from London, I am passionate about the further internationalization of our student experience and pursuing partnerships in research and executive education. With Northern California’s economic engine fueling Pacific Rim commerce, pursuing the dynamic opportunities in China is our natural first stop on a tour to build our international influence. In May, I made a 12-day visit to China, my sixth trip there and my second as dean. Joining me was my wife, Cheyenne, a Chinese native and a former principal at executive search firm Heidrick & Struggles, and Wendy Beecham, the School’s managing director of executive education. Our whirlwind itinerary included talks with top academics and executives in Beijing, Shanghai and Hong Kong who are shaping China’s energy, financial services, technology and agribusiness industries. We visited Beijing, Tsinghua and Fudan universities, and the China-Europe International Business School (CEIBS). CEIBS recently partnered with the CHIC Group on the First China Agri-Business Forum, focused on the modernization of agrifood. The CHIC Group is China’s leading agribusiness supply chain management service. Our tour of its new training and research facility in Shanghai, where the forum was hosted, revealed many promising alliances with UC Davis’ expertise. We also met Beijing University Vice President Wen Hai (pictured), who earned his UC Davis Ph.D. in economics in 1991. He is the founding dean of the HSBC Business School in Shenzhen, an entrepreneurial hotbed of 10 million north of Hong Kong. We learned much about their executive education needs and building more bridges with UC Davis. In Hong Kong, Dr. Rosanna Wong, an influential businesswoman, former government executive council member and UC Davis Ph.D. graduate, brought us together with the leaders of eight of Hong Kong’s top universities and business schools. We’re now examining the best areas where we can meet the Chinese business sector’s hunger for education. As we expand our footprint beyond our borders, we will build on the groundwork laid by our global trailblazers—our alumni living and working around the world. Several are featured in this issue. I invite you to read the first-person accounts from these graduates whose innovative leadership and entrepreneurial drive are having a powerful and positive impact on international business.

S t e v e n C . Curra l l

Dean and Professor of Management

>> www.stevecurrall.com >> Read my tweets from China @ucdavisgsmdean Scan QR code or Download interactive digital Innovator @ >> www.gsm.ucdavis.edu/summer2012

U C D avis G raduate School of M anagement 1


OUR GLOBAL TRAILBLAZERS

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cross six continents, UC Davis Graduate School of Management alumni are catalysts for

change in a wide spectrum of industries around the world. From strategizing on global investments in London and Zurich to administering health programs in Africa and innovating in high-tech markets in India and China to managing drilling contracts for the world’s largest off-shore development project in Abu Dhabi, our alumni are excelling in international business as top executives, managers and entrepreneurs. Our faculty members have long been recognized internationally as leaders in their scholarship and research, collaborating with international colleagues and traveling the world to present their expertise at forums, conferences and as honored visiting professors. Many also work directly with international companies on research projects that provide valuable and actionable intelligence to guide strategy and business operations. UC Davis MBA students also fan out to nearly every continent, studying in exchange programs abroad, working as interns overseas and organizing international study trips to get a first-hand look at companies and emerging markets. We highlight here just a sample of the international leadership of our alumni, who in their own words share how they are making a global impact.

L O W - I N C O M E p r oduce r / consume r connec t ions

ecuador

no v el food p r ese r vat ion

CHILE

BRAND MARKETING

F RA N CE

switzerl and

Craig Cummins MBA 05 Biomedical Engineering MS 04

Noemi Danao MBA 04

Rodrigo Cifuentes MBA 05

Stephanie Swannack MBA 07

Head of Business Development SNV in Latin America Quito, Ecuador

Global Manager, New Business Development AgroFresh, a division of Dow AgroSciences Santiago, Chile

Director of Marketing Catalina Marketing International Paris, France

“I am the head of business development for SNV in Latin America, a Dutch social enterprise focused on advancing inclusive development. We work with private sector firms, government institutions, NGOs and community-based organizations to link low-income producers and consumers to formal markets. I build partnerships and fundraise in collaboration with our five country-based offices across Latin America. Our main source of funding comes from large bi- and multilateral institutions, such as the InterAmerican Development Bank, European Commission, USAID, World Bank and foundations in both the U.S. and Europe, and consulting contracts with private firms.”

2 S U M M ER 2012 I N N OVATO R

“AgroFresh, the post-harvest arm of Dow AgroSciences, is the global leader in innovative fresh produce preservation solutions. With a fast-growing world population and increasing food prices, while one-third of food produced globally is lost or wasted, novel food preservation solutions are in high demand. I manage our innovation process and strategy to rapidly create and bring new products or services to our global customer base, using a variety of channels that include internal R&D, development of external partnerships or joint ventures, licensing of intellectual property and acquisition of complementary technologies and companies.”

S us tainable I n v es t men t s

“Catalina is the global leader in precision marketing, providing brand manufacturers, retailers and health providers worldwide with consumer-driven solutions that efficiently meet their objectives for growth, profitability and deeper, more productive consumer relationships. As a director of marketing based in Paris, I manage our client account for the largest do-it-yourself hardware retailer in Holland, Intergamma. I work with Intergamma to develop actionable customer segmentation and impactful customer relationship management campaigns.”

Senior Associate, Private Equity Sustainable Asset Management Zürich, Switzerland

“Robeco, a leading European asset manager, and its subsidiary Sustainable Asset Manager, SAM, a sustainable investment pioneer, manage one of the largest global sustainable private equity platforms focused on clean technology, clean infrastructure and environmental, social and governance integration. My responsibilities include investing into private equity partnerships and co-investing directly into companies alongside these partnerships, and developing marketing strategy and materials for the raising of funds and separate accounts.”


GLOBAL IMPACT denmark

i ta ly

in d i a

c hin a

Jacob Fossar Petersen MBA 03

Antonio Z accheo MBA 93

Praveen Srikantaiah MBA 10

Willia m Xu MBA 11

Vice President, Business Ethics Compliance Office Novo Nordisk Copenhagen, Denmark

Vice President, Sales and Marketing Carpineto Winery Greve in Chianti, Italy

Manager, Market Research Blueocean Market Intelligence Bangalore, India

Vice President, Digital Media Development International Data Group, China Ltd. Beijing, China

“Headquartered in Denmark, Novo Nordisk is a global healthcare company with 89 years of innovation and leadership in diabetes care. The company employs more than 32,700 employees in 75 countries, and markets its products in 190 countries. I have global responsibility for implementation of our Business Ethics Compliance Program, including anti-corruption, conflicts of interest, interaction with healthcare providers and intermediaries, and related areas of Business Ethics Compliance.”

B usiness E t h ics

li q uid nat u r al gas

“Carpineto grows a dozen varieties of wine grapes, producing about 2.5 million bottles of mostly red wine annually. We export about 90 percent of the production to 70 countries; our major markets include the U.S., Canada, Germany and Japan. I work with importers to develop sales strategies and I’m also in the vineyards, where it’s all hands on deck as needed. I’m constantly jetlagged from a global itinerary of wine shows, and visits with wine retailers and restaurateurs, wine writers and other customers.”

W ine S ales & M a r ke t ing

NEW T E C H N O L O GY

“My company helps Fortune 100 companies build actionable business insights based on market research. Everybody is looking at emerging markets right now, and clients are increasingly relying on global market research agencies to tell them stories about what the market looks like in these countries, what the consumers are expecting, how the market is going to shape up in the next five to 10 years. My work drives a diverse range of business impact ranging from how a software giant will push its products in Brazil to how a high-end beverage player from France will target the elite socialite market in India.”

M a r ke t Resea r c h

S O F T WA R E SALES

digi tal media de v elo p men t

ANGOLA

q ata r

John Talbot MBA 91

Wisa m Costandi MBA 01

Paul Krueger MBA 95

Mat thew Vogel MBA 08

Comptroller, Angola LNG Ltd. Chevron Corp. Luanda, Angola

General Manager Informatica Qatar Doha, Qatar

Sales Leader, ASEAN Pegasystems Singapore

Product Manager Abbott Diabetes Care Melbourne, Australia

“Chevron is a 36 percent owner of a start-up liquid natural gas company in Angola. The oil companies operating in Angola, including Chevron, produce gas as a necessary but not desirable by-product of the valuable crude oil. This gas cannot be used locally and cannot be economically shipped to a market, so it is flared at the well site, which is not helpful for the environment. The project I work on will put out these flares and allow the gas to be economically transported to a profitable market. My role as comptroller has been to develop the accounting and reporting processes and to hire and train about 45 local Angolans to perform these processes. There is a very strong emphasis on Angolanization of the project content and staffing, which is an international trend facing oil company projects.”

“I came out to Qatar in spring 2008 to start a new technology business based in Doha and focusing on the region. As the classic story goes, I landed at the airport here alone with two suitcases and thinking, ‘Now what?’ Four years later, we’ve grown the business to 30 people and we are on track to triple our revenue from last year. We are positioned between the East and West, so we try to leverage the advantages of Europe/U.S. and Asia in delivering products and solutions to the region.”

Sing a p o r e

“IDG is the first American IT service company entering the Chinese market. Since the founding of Computerworld, a Sino-U.S. joint venture in 1980, IDG has more than 30 magazines and newspapers covering computer technologies, electronics and telecommunications by means of joint venture or cooperative publishing in China. Annually, we hold 18 expositions on computer, electronics and telecommunications in China and 60 conferences for major international producers in the IT industry. I help move IDG China’s paper-based media to online/mobile platforms. I work closely with IDG colleagues worldwide to bring the latest technologies and ideas that can help online publications for our media in China.”

D iabe t es Care

A u s t r a li a

“In 2009 I was hired away from IBM to start up the Singapore sales operation for Pegasystems, and was the first sales employee in Asia for the software company. In addition to focusing on sales pipeline growth and deal closure throughout target accounts in Southeast Asia, I oversaw the hiring of professional services and pre-sales staff, and developed relationships with business partners. Pega views Asia as a significant source of license revenue growth through sales to both indigenous Asian organizations and global companies with operations in the region.”

“I’m responsible for creating, executing and managing Abbott’s diabetes care product launches, marketing campaigns and market research projects throughout Australia and New Zealand. I’m closely involved in all aspects of the business, including finance, sales and customer service. We collaborate with colleagues throughout the Asia-Pacific region, Europe and the Americas to share best practices, market intelligence and leverage resources.”

U C D avis G raduate School of M anagement 3


GLOBAL IMPACT

OUR GLOBAL TRAILBLAZERS

ENGLAND

K a z a k h s ta n

CHINA

Cristal Sumner MBA 99

Paul Reinhart M A 88

Todd Kinkade MBA 98

Koji Nishihara MBA 95

Chief Executive British Homeopathic Association and Faculty of Homeopathy London, England

Peace Corps Volunteer U.S. Peace Corps Pavlodar, Kazakhstan

Intel PRC Sales & Marketing Controller Intel China Ltd. Beijing, China

Chief Executive Officer Nishihara Environment Co. Ltd. Tokyo, Japan

“As CEO since 2008, I have implemented new strategies toward collaborative work across the homeopathic profession, created coalitions to increase our impact in the health system and in government fighting for patients’ rights. I’ve embraced new technologies and social media to better inform the public about homeopathy and to raise the profile of both organizations I lead. I have spearheaded efforts to integrate post- graduate training in UK universities and accredit teaching centers throughout the world, working particularly with European organizations representing patients and doctors.”

A lt e r nat i v e M edicine

W o r ld Healt h

R e PU B l I C O F c o ng o

“My responsibilities at the Peace Corps NGO at Decenta include providing support for strategic planning, annual organizational and employee performance planning and ad hoc projects. Decenta contributes to the sustainable development of civil society through the capacity building of non-governmental organizations and other civil initiatives of northeastern Kazakhstan. The U.S. Peace Corps seeks to help the people of interested countries to meet their need for trained men and women and promote mutual understanding among Americans and the peoples served by the Peace Corps.”

PEACE C O RP S

FUTURE E N E R GY

United Arab EmirateS

ja pa n

“I oversee sell-in and sell-through programs for China’s consumption of Intel products, which represent about $9 billion in revenue in 2012. I’m responsible for optimizing the company’s growth for the next three years through goal setting, priority definition and program zero-based budgeting. I partner with Intel China’s president to manage an annual budget of about $200 million and a sales organization of 600 direct and indirect sales employees.”

Healt h Relief S e r v ices

HIGH TECH

M a daga s c a r

“Since its foundation in 1917, Nishihara Environment has contributed to improving people’s lives in Japan through design, construction, operation, and maintenance of water/wastewater treatment plants. I joined the company after returning to Japan in 1995 with my UC Davis MBA, and became CEO last year. Now the company is a member of Veolia Water Group, one of the biggest water services companies from France. My responsibility is to cooperate with Veolia Water to produce synergies to further grow our company in Japan and worldwide by leveraging Veolia’s global network.”

W o r ld t r ade

C r eat ing C lean Wat e r

INDIA

Daniel Walter MBA 00

Roane W yat t Thorpe MBA 98

Ingrid Sheridan Somé MBA 08

Inderbir (Micky) Singh MA 89

Director of Administration and Finance World Health Organization, Africa Regional Office Brazzaville, Democratic Republic of Congo

Team Leader—Project Drilling Planning & Business Improvement Contracting Abu Dhabi National Oil Co. (Zakum Development Co.) Abu Dhabi, United Arab Emirates

Deputy Management Quality Coordinator Catholic Relief Services Antananarivo, Madagascar

Chief Operating Officer Tradeindia.com New Delhi, India

“After serving the World Health Organization in India and Switzerland, in June 2011 I returned to ‘the field’ at WHO’s Africa Regional Office. I’m responsible for 300 staff in 46 African countries in the areas of finance, human resources, information technology, procurement and security. My affinity is to be close to where the healthcare needs are the greatest and the work is consequential.”

4 S U M M E R 2012 I N N OVATO R

“I lead a team managing a $3 billion drilling and completions contracts portfolio. We are developing the world’s largest offshore project—$15 billion—from four artificial islands, which will be 100 percent discharge free to the ocean environment. The project is a complete redevelopment of the fourth largest oilfield in the world. Abu Dhabi National Oil Co. is a sponsor, and Abu Dhabi hosts the World Future Energy Conference, which are leaders in future energy transformation. In my career I have lived and worked in 16 countries, and traveled to another 20 countries in support of project and operations activities.”

“Catholic Relief Services works in more than 100 countries to assist impoverished and disadvantaged people. The program in Madagascar focuses on improving health, agricultural production and access to clean water, and responding to Madagascar’s frequent natural disasters. I work in operations, helping to improve our cost efficiency and bring new technology to help solve problems in the developing world.”

“I have been working since 2007 with India’s largest business-to-business marketplace. The company started in 1990 printing exporters directories and moved its focus to the web in 2001. It is an exciting and growing business. We have two million registered users worldwide. The portal bridges buyers and sellers, importers and exporters of a wide range of products. The CEO and I have travelled extensively to Hong Kong and China, as almost 400 Chinese users sign up daily, and we would like to monetize this by hiring local Chinese speakers. In India we employ 1,200 people and plan to hire 50 in China soon.”


GLOBAL IMPACT

Want to Fight Poverty? Give Someone a Stage MBA Team Reaches Finals of Hult Global Case Challenge

Photo courtesy Anup Menon

B y 2 012 M B A G ra d ua t es K e i t h W e i ssg l ass , A d a m B a i l l i e , Dav i d F i sher , E m m a Va n G e n d ere n a n d E va n H o we l l

Keith Weissglass MBA 12 presents at the Hult Global Challenge regional finals in San Francisco. UC Davis advanced to the finals by besting 15 other teams. Thousands of students competed across five cities and online, representing more than 130 countries and six continents.

There are good alternatives, but the price is high. For the rural poor, a solar-powered lantern can cost half a month’s wages. With this in mind and a fresh perspective, we began by deconstructing the solar lantern—literally. We removed the solar panel, charging circuit and battery, which account for 70 percent of the cost. The lanterns need electricity, so we designed solar-powered charging shops for rural communities in Kenya. A centralized charging station is far more efficient than leaving individual lanterns outside all day where they can get broken, stolen or rained on. Here’s how it works: When a customer buys a lantern, the shopkeeper lends her a fully charged battery for free. Three days later, the customer brings back the

sk a young person today, “How can you make the world a better place?” Few will reply, “Go to business school!” We aim to change that, because it turns out that “how to change the world” is exactly what business schools teach. Whether that’s for better or for worse, of course, depends on what students do with that knowledge. In our case, it’s reinventing the way the world’s poorest families light their homes. Our team was a finalist in the 2012 Hult Global Case Challenge, which this year focused on global poverty solutions in housing, education and energy. After winning the regional energy final in San Francisco, we flew to New York City in April to vie against five teams from other top global universities. We were competing for a $333,000 prize to pilot our plan. Here is the challenge: Right now, in rural Africa, 140 million families can’t flip on the light switch when it gets dark. They have no electricity, so most burn dirty and expensive candles or kerosene lamps.

for a freshly charged one for 20 cents. That’s half of what many Kenyans pay for three days of kerosene.

Why would a customer come to this shop? Because we’re also charging cell phones. More than half of rural Kenyans own cell phones, even though many can’t charge them at home. Some regularly travel three hours by bus and pay 20 cents

This article was adapted from the team’s blog in the Huffington Post @ >> www.gsm.ucdavis.edu/hulthuffpost

Photo courtesy Robert Cochran

A

depleted battery. The shop exchanges it

(or more) for the recharge. That’s $40 per kilowatt hour, which is more than 200 times what we pay in the U.S.! With families spending so much on kerosene and phone charging, it’s no surprise that our idea can be profitable. And once one charging shop pays for itself, the profits build the next one in another community. This sustainable business model can save customers money, improve their lives and replace polluting and dangerous kerosene. Of course, everything won’t work exactly as we expect. But through this competition, we collected feedback and insights from an incredible array of experts: UC Davis professors and engineers; consultants at McKinsey, IDEO and Jump Associates; funders at Omidyar Network; and NGO workers and business people across Africa. We didn’t win at the global finals, but we’re inspired to move forward. This business model needs to be tested. There are 140 million families in Africa alone who are waiting for cleaner, brighter light.

At the Hult Global Case Challenge finals in New York, UC Davis MBA students (left to right) Evan Howell, Adam Baillie, David Fisher, Keith Weissglass and Emma VanGenderen share solar power ideas with President Bill Clinton. The Clinton Global Initiative is a partner on the competition. U C D avis G raduate School of M anagement 5


GLOBAL IMPACT

Photos courtesy Wil Agatstein

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6

Eurozone Crisis Up Close Students on the Ground in Italy and Turkey

by Mar i a n n e S k o czek

I

n late June, foreign ministers of 16 European Union countries, including

Italy, signed an editorial: “The EU and Turkey: Stronger Together.”

M I L A N , i ta ly

“At a time when the EU faces economic challenges and continuing instability in the Middle East, our relationship with Turkey matters more

i s ta nb u l , t u r k e y

than ever. . . . In these tough economic times, increasing trade with Turkey offers opportunities for EU businesses. With a GDP growth rate of 8.5% last year, the second fastest in the G-20 after China, Turkey is now the EU’s fifth largest export market. Turkish entrepreneurs in Europe run businesses worth 40 billion euros, employing half a million people. In sectors like aviation, automobiles and electronics, our economies are increasingly integrated.” The ties between the Eurozone and Turkey set the stage for 21 UC Davis MBA students and Wil Agatstein, executive director of the UC Davis Child Family Institute for Innovation and Entrepreneurship, to travel to Milan and Istanbul in March to learn firsthand about how business is done in Italy and Turkey—and their roles in the global economic system amid the crisis in Europe. The trip was the culmination of the School’s International Study Practicum, which marries 10 weeks of intensive classroom preparation with setting the itinerary for the 10-day, in-country immersion.

I n s i d e r s ’ I t in e r a ry MILAN Bocconi University Borsa Italiana Ducati Ermenegildo Zegna (leading Italian men’s fashion house) Galleria Campari Johnson & Johnson Maserati Micron Technology Sergio Rossi (leading Italian women’s footwear company)

I STA N B U L British Consulate Efes Brewing Company International Finance Corporation (World Bank Group) Istanbul Stock Exchange Sony Universal Music / Taxim Edition Toyota Pazarlama Ve Satis (Toyota Motors Turkey) Wines of Turkey

“With much of the world’s eye turned to the European economic situation, Italy and Turkey were a natural choice,” said Agatstein. “Italy is steeped in

The UC Davis team met with executives and managers, entrepreneurs

history and has some unique business strengths, such as fashion, food and

and policymakers in industries ranging from finance and banking to food

performance automotive vehicles. The country is a founding member of the

and wine, and from pharmaceuticals to fashion to automotive. They learned

European Union that finds itself economically challenged today.

about local, regional, national and international business—and returned

“Turkey is both European and Asian, working toward full EU membership.

understanding how history, culture, management practices, geography

Its population—young, well educated, skilled but often unemployed—and its

and a country’s relationship to the U.S. are intertwined in today’s global

strategic geographic location offer a tremendous economic opportunity.”

business environment.

6 S U M M E R 2012 I N N OVATO R


GLOBAL IMPACT

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1 D u o m o d i Mil a n o The UC Davis MBA team outside the Duomo di Milano. Ground broke for construction in 1386, and the gothic cathedral took nearly six centuries to complete. Inside, a list of Milan archbishops dates back to the year 50. 2 Ita li a n I nf r a s t r u c t u r e I n s igh t s “As a civil engineer, I was interested in how the everyday designs that makes cities and roads possible are different from what we are used to in the U.S. Milan enjoys a fully formed public transit system, with rich subway, streetcar and bus routes. This may be an advantage of Milan being a very old city. Subway and street cars represent large capital investments, and if the zoning nature of a city changes, these fixed investments may end up in the wrong place.” — MBA student Benjamin F. Nicholson 3 MAK I N G PASTA MBA student Jason Banh learns how to make pasta in Gubbio, Italy. 4 Fa s hi o ning a C o m p e ti ti v e C o ll ec t i v e “At Bocconi University in Milan, Assistant Professor Diego Rinallo explained the unique branding Italian microcompanies use to compete in a global market. Coopetition is a blend of cooperation and competition in which less individually powerful companies join together on the basis of a common activity or skill. The resulting ‘industrial clusters’ are innovation hubs for products in the fashion, design, manufacturing and other sectors. “Italy’s most recognizable collective is fashion. Prior to the 1950s, Italian fashion lay deep in the shadow of Paris. But in 1951, 13 dressmakers united and created innovative collections that were clearly differentiated from Paris designs, and from each other. Runway shows attracted American buyers and the press—and the rest is history.” — MBA student Carolyn Dicharry

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5 Ex treme At tention to Detail s “What surprised me the most was the visit to Maserati. Not only was it amazing to see performance vehicles being built by a combination of advanced manufacturing equipment and manual assembly. It was also educational to see how the region created a network of companies that, together, deliver a spectrum of high-performance vehicles to the world.”

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“The experience has changed me both as an individual and as a business person. I have a new appreciation for other cultures and a wonderful perspective on their way of doing business.” — MBA student Marcus Wilson

— Wil Agatstein 6 P r o m o t ing t h e N at i o n a l in I n t e r n at i o n a l “The British Consulate in Istanbul promotes that nation’s economic interests in Turkey—identifying opportunities for British companies, and supporting their entry into Turkey’s diverse and lucrative markets. We met with Deputy Consul General Sayed Shah and the three diplomats responsible for diverse sectors, including information and communications technology; household goods; and automotive, oil and advanced engineering. Our wide-ranging discussion touched on the booming Turkish economy, the European Union, Turkey’s emerging relationships in Asia—and keys to foreign service success: stress management and strategic networking.“ (Pictured: Ryan Person in front of the British Consulate.)

1 1 F o ll o w t h e M o n e y “Eralp Polat, head of the international relations team at the Istanbul Stock Exchange (ISE), discussed Turkey’s place among the world’s top 20 GDPs. The country’s sole securities market, the ISE began trading in 1986 and today lists 375 companies. But of the top 500 companies in Turkey, only 120 are publicly traded. The ISE’s efforts to encourage companies to list face a very specific challenge: the vast majority of Turkish companies are family owned and have a traditional approach to business—one that does not include complying with the ISE’s rules and regulations. “The meeting ended with a view of the trading floor and an explanation of the trading boards that were used until 1995, when the exchange switched to computerized trading.”

— MBA student Nasif Siddiqi

— MBA student Leah Silva

7 A L OCA L SPEC I A LTY Hunting for truffles at the Azienda Agraria Villa Fassia.

1 2 OUTS I DE T H E B LUE MOSQUE

8 COME TO G ET H ER Lindsey Spice and Leah Silva visit the Blue Mosque in Istanbul. 9 I s ta nb u l S p i c e Ba z a a r The Istanbul Spice Bazaar has been the center of the city’s spice trade for more than 350 years. Once the largest spice trading venue of the medieval world, its abundant stalls still feature mountains of edible exotics. 1 0 t h e pa s t in t h e p r e s e n t Mona Kamdjou at the 15th-century Rumeli Fortress, on the Bosphorus Strait.

D r i v ing Ch a ng e in T u r k e y ’ s Au t o m o bil e I n d u s t ry “At Toyota Pazarlama Ve Satis (Toyota Motors Turkey), we gained an overview of the firm’s sales and marketing activities as well as current challenges, including Turkey’s tax structure, the black market economy and the relationship between the two. “At more than $12 U.S. per gallon, Turkey has the highest fuel prices in Europe and possibly the world. But that doesn’t mean the 1.8-liter Toyota Prius is popular. Vehicles with engines larger than 1.6 liters face a higher tax.“ — Nasif Siddiqi

U C D avis G raduate School of M anagement 7


FACULTY FOCUS

Banking Expert Foretold Risk that Led to Global Financial Crisis Robert Marquez Joins Faculty

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s U.S. housing prices peaked during the real estate bubble in 2006, Boston University Associate Professor Robert Marquez and Giovanni Dell’Ariccia of the International Monetary Fund wrote a compelling paper showing that when banks have easy access to capital and demand for credit is high, the tendency is to take excessive risks that could endanger the financial system. Their study, “Lending Booms and Lending Standards,” published in the Journal of Finance, offered an explanation for the sequence of financial liberalization, lending booms and banking crises observed in many emerging markets. It proved to be a telling recipe for financial disaster that could, and did, spread globally, with devastating impacts. Two years later, the contagion hit the U.S. as many banks that had expanded

B y R o ber t P reer

their portfolios when interest rates were low saw their sub-prime mortgage loans suddenly go bad, and the collateralized debt obligations on those loans sold to investors globally fell apart. Retail and investment banks collapsed, and a global financial crisis followed. Marquez’s paper foretold the rise of systematic risk in the interconnected financial system “We never thought about it as a ‘crisis paper,’ but looking back, a lot of its implications are consistent with what we observed in the crisis,” Marquez said

in an interview this spring in his office at Boston University, as he prepared for what he hopes will be the last in a series of cross-country relocations. A leading expert in banking and corporate finance, Marquez joined the Graduate School of Management faculty in July. A native of Southern California, Marquez earned his undergraduate degree in economics from the University of California, Berkeley in 1990, then worked for several years for the Federal Reserve in San Francisco. He headed east for graduate school, earning a Ph.D. in economics from MIT in 1998. He spent eight years on the faculty of the University of Maryland before accepting a faculty post at Arizona State

“In the popular press, it has been taken for granted that a cause of the crisis was that institutions were operating in an environment of low interest rates. But when you look at the economic literature, there were no models that would have predicted that. . . . I am trying to find out what causes banks to do what they do.” —Professor Robert Marquez

University’s W. P. Carey School of Business. After three years there, he crossed the country again to Boston University, where he was an associate professor of finance. Married with two young children, Marquez is happy to return to California. “I grew up there and have family there,” he said. “Boston is a very nice place to live, but sometimes once-in-a-lifetime opportunities come along. We see this as a permanent move.” Marquez’s wife, Elizabeth Bailey, also an economist, will become executive director of the Energy Institute at UC Berkeley’s Haas School of Business. Professor Brad Barber says Marquez is “a stellar addition” to the Graduate School of Management community. “Robert brings years of experience in research and teaching at a number of institutions,” Barber said. “More importantly, his research on the structure of the banking industry is both timely and influential. He is one of the leading theorists on banking issues, and we are fortunate to have him at UC Davis.” In his research, Marquez uncovers the mechanisms that underlie the behavior of financial institutions. “I work with models and equations and try to study the implications for markets.” One important focus of his research now is the effect low interest rates have on banks and whether they encourage banks to take on more leverage. To understand the recent crisis and perhaps find ways to avoid crises in the future, we need to know what happens inside banks, according to Marquez. “I am trying to find out what causes banks to do what they do.” >> www.gsm.ucdavis.edu/marquez

8 S U M M E R 2012 I N N OVATO R


FACULTY FOCUS

Moneyball Hits Home Run Lessons on Value Creation by P r o f ess o r S ha n n o n W. A n d ers o n N P R i n t er v i ew w i t h B ra d Pit t on Moneyball @

M

oneyball has become a metaphor for everything in business today: It touches heavily on concepts related to budgeting, data analytics and productivity. The movie is about how Oakland A’s General Manager Billy Beane revolutionized the process of scouting new baseball players on a budget by employing computer-generated analysis to sign new players and when best to put them in the line-up. National Public Radio recently interviewed Brad Pitt about making Moneyball and his role as Billy Beane. The interview provides snapshots of critical moments in the film that help put my points in perspective. We typically think about budgets and constraints as the enemy of creativity. There is a sense that you need to think big thoughts, and not be constrained by an accountant looking over your shoulder. But Moneyball demonstrates that the A’s hard budget realities fostered creativity—they forced Beane and his managers to come up with new ways to get the most out of their dollars. A n a lyze Th is : Data , Data , Data

Too often, people watch Moneyball and only come away with a sense of the power of data analysis. Data analytics are everywhere in business today. New technology makes sophisticated data analytics and data mining possible, and it’s being used by many industries: healthcare, crime prevention, the education sector, social media—you name it. The subtitle of Moneyball (the book, by Michael Lewis) is The Art of Winning an Unfair Game, which illustrates a key point for business leaders. The “unfair game” is that major league baseball

>> www.gsm.ucdavis.edu/NPRMoneyball teams play with different budgets and constraints. However, take note that Lewis used “art” not “science,” which would be more expected given the heavy use of statistics and data analytics. There is an art of management that goes hand in hand with science and making data useful.

Professor Shannon W. Anderson is an

I n n ovat i v e Pro d uc t i v i t y:

expert on the design and implementation

M ov i n g B eyo n d “ The Way

of performance-measurement and

I t’s A lways B ee n D o n e”

cost-control systems. Her research spans

Businesses are focused on driving productivity. We can use Moneyball to explore the concept of behavioral economics extensively. It also shows us how our behavioral biases, observational biases and decision-making limitations lead us to make systematically bad decisions. Reviewing the history of baseball, scouts used a “five tools” system to judge potential players. Ultimately, we see that those criteria became cognitive blinders because they were more of a tradition rather than an accurate way to predict success. Billy Beane’s system generated data that made possible a more dispassionate look at what predicted success in the industry. On one hand, experience can be a wonderful thing as far as learning and becoming more efficient. But experience can also condition you to look at things as always having being done a particular way.

the fields of management accounting and operations research. In her MBA courses, she uses the case study of the Oakland A’s major league baseball team as chronicled in the book and film Moneyball to illustrate key business concepts. This is adapted from her recent blog.

Managers need to question if “the way it’s always been done” is the best way, and if not, how to break that frame. Moneyball shows how Beane got more for his money because he learned what it means to be productive in baseball, and then built models and tested them. The lesson learned: Given available resources, how do we redesign processes to be able to be more productive? >> www.gsm.ucdavis.edu/anderson

U C D avis G raduate School of M anagement 9


FACULTY FOCUS

“Normal” Organizational Wrongdoing B y P r o f ess o r D o n a l d P a l m er

W

hen people such as Bernard Madoff or firms such as Enron are found to have engaged in shady dealings, news commentators, social critics and even scholars loudly condemn the offenders. For the most part, they have framed wrongdoing as an abnormal phenomenon. Recently, though, theorists and researchers have begun to view wrongdoing as a normal phenomenon with a range of explanations. This turn has important implications for those interested in finding ways to curb wrongdoing. Wrongdoing is normal in at least four respects. First, it is prevalent. As I began this article in April, three major instances of misconduct made the news over two days: Wal-Mart de México’s bribery case; fraud perpetrated by top managers of the U.S. Immigration and Customs Enforcement agency; and Rupert Murdoch’s testimony regarding his newspaper’s illegal phone hacking.

The Plethora of Nor m al Causes of Organizational Wrongdoing ■■

Rational choice and culture – When

analyzing the causes of the recent financial crisis, proponents of a “rational choice” explanation pointed to investment bankers’ “greed” and regulators’ failure to keep it in check. Proponents of a “culture” explanation blamed the industry culture in which investment bankers viewed clients as stupid and fair game for manipulation. ■■

Administrative systems – These explicit

guidelines tell managers and employees what they should do when they confront specific work situations, but the rules can give rise to wrongdoing.

Why do employees, managers and senior officials engage in illegal, unethical and socially irresponsible behavior? In his new book, Normal Organizational Wrongdoing (Oxford University Press, 2012), Professor Donald Palmer examines wrongdoing as a normal occurrence in which pervasive structures and processes help explain why it is so prevalent and why ordinary people are susceptible to perpetrating it. The full version of this article is published in The European Financial Review (June/July, 2012), www.europeanfinancialreview.com. Editor’s Note :

he book provides a comprehensive critical review of the theory and research on rganizational wrongdoing. By using rich case study material, it illuminates different erspectives, potential explanations, and policy suggestions for the reduction of rganizational wrongdoing.

NORMAL ORGANIZATIONAL WRONGDOING

he dominant view of wrongdoing as an abnormal phenomenon assumes that the erpetrator is a rational, proactive actor, working in isolation. However, Palmer evelops an alternative approach in this book, examining wrongdoing as a normal ccurrence, produced by boundedly rational actors whose behavior is shaped by he immediate social context over a period of time.

Palmer

stances of wrongdoing in and by organizations have featured heavily in news eadlines in recent years. Why do organizational participants—employees, managers, senior officials—engage in illegal, unethical, and socially irresponsible ehavior?

NORMAL ORGANIZATIONAL WRONGDOING A Critical Analysis of Theories of Misconduct in and by Organizations

Donald Palmer

Jacket image: © Peter Stone/Alamy.com.

ISBN 978-0-19-957359-2

9 780199 573592

 2

1

Second, wrongdoing is often not much different than right doing. This is particularly true of bribery, where lines are blurred between legal and illegal exchange, or at least officially tolerated gifts. Third, even though wrongdoers are often cast as malevolent, for the most part they are ordinary and even morally upstanding people and firms. Fourth, and most important, wrongdoing is generated by organizational structures and processes that are pervasive in organizations and that are also responsible for right doing.

10 S U M M E R 2012 I N N OVATO R

2

Donald Palmer is Professor of Organizational Behavior at the Graduate School of Management, University of California, Davis. He holds a BSc in Molecular Biology from the University of Wisconsin, Madison, and a PhD in Sociology from the State University of New York, Stony Brook. He has served as Assistant Professor in the Graduate School of Business at Stanford University and as Chair of the Department of Sociology at Reed College. Professor Palmer has conducted quantitative empirical studies on corporate strategy, structure, and inter-organizational relations, and qualitative studies of organizational wrongdoing, which have been published in the American Sociological Review, American Journal of Sociology, Annual Review of Sociology, Social Forces, Research in the Sociology of Organizations Administrative Science Quarterly, Research in Organizational Behavior, Strategic Organization, and Journal of Management Inquiry. He was an Associate Editor of Administrative Science Quarterly from 2000 to 2002 and Editor of the journal from 2003 to 2008.

■■

■■

Power structures – Pecking orders and chains of command resolve problems quickly and facilitate coordination, but can cause subordinates to engage in wrongdoing. In the Wal-Mart de México bribery case, the company quickly squashed an internal investigation, presumably because it implicated an executive who had engineered the firm’s most dramatic international expansion. Situational social influence – Social relationships support attitudes and behaviors that help the company achieve goals, but also can foster wrongdoing by quashing dissent. Commitment processes are among the most powerful forces behind financial fraud. For example, faced with performance shortfalls, managers sometimes tweak accounting numbers to look better and are praised for their efforts, adding more pressure to keep the ruse going.

I m pl i cat i o ns fo r Ma n agers a n d E m ployees

The view of wrongdoing as a normal phenomenon suggests managers and employees are often confronted with choices that place them in a gray area separating right from wrong, with pervasive forces that push them into the wrong. Managers and employees need to become sensitized to the decidedly grey area in which they operate, and they must become familiar with the forces shaping their navigation of this terrain. If they can do this, they have a fighting chance of staying on the right side of the line. Learn more about Normal Organizational Wrongdoing @ >> www.gsm.ucdavis.edu/palmer


FACULTY NEWS & RESEARCH

Launching Multiple Products Key to High-tech Success

H

igh-tech firms should aggressively market multiple product versions at the same time, the way Apple did with the iPhone and iPod Touch, both to attract early adopters and to build a network of application developers, according to research by Professor Hemant Bhargava. Bhargava and co-authors Byung Cho Kim from Sogang University and Daewon Sun from the University of Notre Dame studied high-tech platform products launched over the past 20 years, including the Xbox, e-readers and the iPhone. The study, forthcoming in the journal Production and Operations Management, looks at products that operate in a two-sided market. Video game consoles, for example, serve game-playing consumers who can play their complex video games, but also game developers, who in turn get a platform to reach potential buyers.

To be successful, companies must overcome many obstacles with new platform products. “Often, entrepreneurs and firms are unable to successfully commercialize their innovation despite having technologically sophisticated products,” said Bhargava. Start-ups often roll out a minimal product line during initial launch to avoid design complexity and higher fixed costs, and wait for substantial developer participation before expanding the product line. However, two versions of a product—basic and premium—could resolve the growth versus profitability conflict, especially when the value of the new platform product increases with the number of people using it. For example, after launching the relatively expensive iPhone

Professor Hem ant Bhargava

Associate Dean for Instructional Programs Jerome J. and Elsie Suran Chair in Technology Management

at the end of June 2007, Apple quickly added the iPod Touch, which does not have the calling feature and offers a less-expensive alternative for consumers. The iPod Touch had the effect of increasing the overall installed base of devices running iPhone applications, which made the platform even more attractive to potential application developers. “Our research is founded on the proposition that growth and profitability need not necessarily operate in conflict,” Bhargava said. In February, Bhargava was honored with the Jerome J. and Elsie Suran Chair in Technology Management. The endowed chair was established in 1999 by a generous gift from Senior Lecturer Emeritus Jerome Suran and his then wife, Elsie Suran. >> www.gsm.ucdavis.edu/bhargava

Behaviors that Lead to Real Estate Bubbles

T

he real estate and subprime mortgage bubbles

highlight incentive A ss is ta n t Pro fess o r A n n a S cherb i n a

that burst and cascaded through the global

problems of key market

financial system leading to the Great Recession

players and discuss why

offer an opportunity to examine why such bubbles

real estate bubbles can

form and how to minimize their impact. Assistant

cause greater adverse

only to public signals that confirm their prior ideas

Professor Anna Scherbina and co-author Bernd

impacts on the economy

but ignore signals that do not. Fourth, investors

Schlusche from the U.S. Federal Reserve Board are

than equity bubbles.

put their faith in attention-grabbing news and then

using behavioral models to study the dynamics

“A typical household has more exposure to real

are slow to change their minds when confronted

of residential real estate bubbles.

estate than to the stock market,” Scherbina said.

with new facts.

In their paper, “Asset Bubbles: An Application to

“Through its effect on households’ balance sheets,

To prevent future bubbles, Scherbina offers

Residential Real Estate,” forthcoming in European

real estate price fluctuations can have a strong

three suggestions: make short sales possible

Financial Management, Scherbina and Schlusche

feedback effect on the real economy.”

with real estate the same way they are with stocks;

The paper divides these behavioral models into

regulators can ensure that the incentives of

four classes. First, buyers disagree about the fair

financial intermediaries are not compatible

values in the market, and investors who believe

with churning bubbles and that the incentives

prices are unrealistically high cannot sell short,

of information intermediaries are better aligned

like they could with stocks, which would correct

with telling the truth; and governments can

the market. Second, investors assume the most

provide better financial education to reduce

recent price trends will continue, which ensures

the adverse effects of investor irrationality.

that indeed they do. Third, investors pay attention

>> www.gsm.ucdavis.edu/scherbina

U C D avis Graduate School of Management 1 1


FACULTY NEWS & RESEARCH

Social Media Buzz: It’s All about Who You Know

W

hen it comes to social media marketing, it’s not just how many people you “friend” on your network, it is how much influence you have with those friends and how connected they are, concludes a new study by Assistant Professor Hema Yoganarasimhan analyzing “buzz” marketing on YouTube. Her research takes an important first step in looking at video viewership online, and how managers can use online campaigns to boost their return on investment. It differs from other similar studies in that it looks at whether influential social media users actually lead, or cause, their followers to use and purchase products they recommend. “While video-sharing websites have become increasingly popular, managers have limited information on using this new medium as a marketing tool,” said Yoganarasimhan. The research, “Impact of Social Network Structure on Content Propagation: A Study Using YouTube Data,” was published in Quantitative Marketing Economics (March 2012). Yoganarasimhan points to a Ford Motor Co. buzz marketing campaign for its subcompact Fiesta car in 2009. Sidestepping traditional marketing, Ford steered Fiestas to 100 influential video bloggers, in return for them blogging, tweeting and recording their experiences. The result: Ford garnered 6.2 million YouTube views, 750,000 Flickr views and about 4 million Twitter impressions in less than a

Social and Organizational Innovation Converge Facu lt y H os t 12 t h Dav i s Co n fere n ce o n Q ua l i tat i v e R esearch

B y A l ex R usse l l

Professor Kimberley Elsbach

Associate Professor Beth Bechky

T

op qualitative researchers from around the world converged at Gallagher Hall on March 24 for the 12th annual Davis Conference on Qualitative Research. 12 S U M M E R 2012 I N N OVATO R

year, leading to 6,000 car orders and 100,000 “hand-raisers” who expressed interest. The key, Yoganarasimhan says, is handpicking influencers who can spread information efficiently, factors not based on only the size of the author’s network, as prior studies assume, but also the structure and the author’s place in it. “Authors with many friends are also likely to have more engaging personalities, greater expertise and experience, and an overall better reputation for dispensing good information­—all of which also contribute to their effectiveness,” she said.

Ford Fiesta Buzz Marketing Result

6.2

MILLION Youtube VIE WS

750,000 Flickr Views

6,000

4

million Twit ter impressions

car orders

Organized by Professor Kimberley Elsbach and Associate Professor Beth Bechky, the innovative forum has improved qualitative research and its methodologies and built a community of pioneering researchers. “We were the first qualitative conference in management studies in the world, and are widely viewed as the pre-eminent conference to attend as a member of the qualitative research community in management and organizations research,” said Elsbach, who holds the Steven G. Newberry Chair in Leadership. This year’s conference Best Presentation Awards recognized Assistant Professor Melissa Mazmanian of UC Irvine’s Donald Bren School of Information and Computer Science and Assistant Professor Emily Heaphy of Boston University’s School of Management. “It was a very valuable opportunity,” said Mazmanian. “The conference has an incredibly

Assistant Professor Hem a Yoganarasimhan

I t’s Fash i o n ab l e to be C loake d

Yoganarasimhan also has been exploring fashion industry advertising strategies. “The common view is that more information is always better,” said Yoganarasimhan, whose paper, “Cloak or Flaunt? The Fashion Dilemma,” was published in Marketing Science (January/February 2012). “For conspicuously consumed products, giving more information to customers is not always good,” Yoganarasimhan says. “Having more customers is not always good either.” In the high-end clothing industry, she explained, often the most fashionable items are kept under the radar intentionally. Yoganarasimhan’s research suggests that “cool” people buy hot products to show off their taste and fashion knowledge to their friends. If a fashion designer were to advertise these products broadly, those who wouldn’t have known about the products without advertising—the “uncool” people—might buy them, which would lead the cool people to leave. “You can’t keep them both,” she said. >> www.gsm.ucdavis.edu/yoganarasimhan

good reputation as being a supportive and generative space with premier scholars.” Mazmanian presented her research on how group members can help take care of each other, increasing the effectiveness and efficiency of the entire group. The presentations covered four main topics: Institutions, Practices and Social Problems; Group Processes: Change and Creativity; Scientific Research Practices; and Boundary Spanning: Roles and Objects. Other presenters included Associate Professor Michael Sauder, University of Iowa; Assistant Professor Victor Seidel, University of Oxford’s Said School of Business; and Senior Lecturer Tammar Zilber, Hebrew University’s Jerusalem Business School. Information Age Publishing has published two volumes of Qualitative Organizational Research, a compendium of Best Presentation papers from the conferences edited by Elsbach and Bechky. The third volume will be released next year.


FACULTY NEWS & RESEARCH

Can Credit Unions Compete with Payday Lenders?

E

ven if credit unions offered short-term loans

National Credit Union

at better interest rates and lending terms than

Administration reports

payday lenders—and most don’t—current payday

that only 6 percent of

loan customers say they prefer the convenience

credit unions offer such

of payday lenders, according to a new study by

short-term loans, seeing

Associate Professor Victor Stango.

A ss o c i at e Pro fess o r V i c to r S ta n g o

Payday lending has become widespread during the

them as too risky and

past 20 years, with 24,000 payday outlets operating

Growth of payday lenders has led to a policy

expensive to maintain.

physical locations in the United States, in addition to

debate about whether credit unions could offer

Payday loan customers

more online. By comparison, there are about 16,000

the same short-term loans with less financial

say they prefer the longer business hours and

banks and credit unions with about 90,000 branches.

burden on consumers, said Stango. But the

easier lending requirements of payday lenders,

Industry reports suggest that between 5 percent and

despite the high costs of about 391 percent APR

10 percent of adults in the U.S. have used a payday

(annual percentage rate). This APR is based on a

loan at least once. The data was compiled in 2009.

“It seems unlikely that credit unions can viably serve as providers of short-term credit to the customers currently served

typical payday lender charge of $15 per $100 borrowed for two weeks. “It seems unlikely that credit unions can viably

“Current payday borrowers strongly prefer a higher-priced but less restrictive loan to a lowerpriced but more restrictive loan,” Stango said in

serve as providers of short-term credit to the

the study. “Expecting …credit unions to provide

“Some New Evidence on Competition in

customers currently served by payday lenders,”

borrowers with lower-priced but otherwise similar

Payday Lending Markets,” published in

according to the study, “Some New Evidence on

short-term loans products is unrealistic.”

Contemporary Economic Policy (April 2012).

Competition in Payday Lending Markets,” published

by payday lenders,” according to the study,

in the Contemporary Economic Policy (April 2012).

View the study @ >> www.gsm.ucdavis.edu/stango

How Wine Critics’ Quality Ratings Impact the Market

I

t is well known that in markets such as restaurants,

in which critics shape

films and books, critics directly shape outcomes

producers’ behavior:

by guiding consumers’ attention and purchase

by establishing the

decisions through their assessments of product

standards for quality

quality. Less understood is how critics influence

that allow producers to

As a result, wine producers more effectively

the decision making and behavior of producers.

effectively differentiate

price their wines in ways that match the

Associate Professor Greta Hsu and her

A ss o c i at e Pro fess o r G re ta Hsu

themselves and their

quality ratings assigned to future products

colleagues Associate Professor Peter Roberts

product offerings from

within that varietal.

and Professor Anand Swaminathan at Emory

one another. Their paper, “Evaluative Schemas

University have shed light on an integral way

and the Mediating Role of Critics,” was published

list prices, which are often set prior to reviews,

in Organization Science (January/February 2012).

correspond more closely to critics’ quality ratings.

The result is a more orderly market in which

Studying more than 20,000 wine reviews

The study adds to the understanding of how

in the influential Wine Spectator, Hsu and

market order is produced in mediated markets,

colleagues find that for wine varietals

and the multifaceted role that intermediaries such

in which critics’ standards for quality

as critics play in structuring the interface between

are clearly conveyed through the

producers and consumers.

language in their reviews, producers have a tangible basis for antici-

Download the full study @

pating reactions to their offerings.

>> www.gsm.ucdavis.edu/hsu

U C D avis Graduate School of Management 1 3


FACULTY NEWS & RESEARCH

Inside the $2.5 Trillion Global Private Equity Market

P

rivate equity funds’ roles in the economy and their managerial compensation drew scrutiny following the recent global financial crisis, and there is an ongoing debate about increasing taxation on private equity managers’ profit participation, and on the industry’s impact on innovation, competition and employment. Over the past 15 years, worldwide private equity investment has skyrocketed from $100 billion in 1994 to about $2.5 trillion today, driven by institutional investors’ portfolio allocation to private equity, which increased from 3 percent on average in 1997 to 12 percent in 2007 for large foundations. Associate Professor Ayako Yasuda recently teamed with Professor Andrew Metrick of the Yale School of Management to publish the first survey paper of its kind to treat and examine both the venture capital (VC) and the buy- out (BO) segments as subsets of a broader, private equity industry. The paper, “Venture Capital and Other Private Equity: A Survey,” was the lead article in European Financial

Management (September 2011). “We focus on what distinguishes both VC and BO funds from hedge funds and mutual funds, for example,” the authors write, “and discuss the theory and evidence on this ‘private equity’ industry both as financial intermediaries and as an asset class.” Their study notes the importance of private ownership, and information asymmetry and liquidity associated with it, to explain what makes private equity different from other asset classes. The paper reviews the literature on various topics, including value-added activities of VC and BO investors, performance of private equity funds, and contracts between private equity fund managers and their investors. “Both VC and BO backing is associated with significant changes in the ways the investee companies are operated, including more independent and hands-on boards, higher earnings quality, and higher CEO turnover,” Yasuda and Metrick write. On the flip side, investors in VC and private equity funds ink contracts that will best align their interests, via a profit-sharing agreement, closed-end, finite-life fund structure, limited reinvestments, and explicit negative covenants preventing VC and BO fund managers from taking excessive risk and/or diverting efforts away from funds. >> www.gsm.ucdavis.edu/yasuda

Capping the day, Graduate School of Management alumnus Joncarlo Mark MBA 00 (left) moderated an all-star panel on the role of private equity in corporate governance, finance and operations. Mark recently founded Upwelling Capital, an advisory and investment management firm, after 12 years with CalPERS, where he led the restructurings of more than $2 billion of private equity partnership interests. The panel featured alumna Sarah Corr MBA 01, senior portfolio manager at CalPERS; Amador Bustos, president and CEO of Bustos Media; Dennis Roberts, CEO of The McLean Group; and UC Davis alumnus and Dean’s Advisory Cabinet member Mike Child 76 (right) of TA Associates, one of the oldest and largest private equity firms in the world.

Symposium Shines Spotlight on Private Equity B y A l ex R usse l l

T

he Graduate School of Management hosted

its second annual Symposium on Financial

Keynote speaker Raymond Chan of the private equity management firm Adams Street Partners

Institutions & Intermediaries in March, bringing

presented an internal analysis based on his

together two dozen top scholars and industry

firm’s confidential, proprietary data that explored

practitioners from around the world.

the risk-return relationships in various segments

Organized by Associate Professors Ayako Yasuda and Roger Edelen, the symposium focused on private equity, an asset class that

of private equity, from venture capital to corporate buyouts. “This makes for a veritable Disneyworld of

typically raises capital from institutional

insights for academics,” said Edelen. “Private

investors to invest in companies that are already

equity represents an increasingly important

private or are public and then taken private.

channel for capital allocation. It has several

Yasuda said that private equity funds are

unique dimensions that provide an intriguing

becoming a more important asset class for

setting for economic study. Often, these insights

public pension funds and others, but have not

come totally out of the blue, sparking new angles

been as thoroughly researched as banks or

on the structuring of academic inquiry.”

mutual funds. Republican presidential nominee Mitt Romney’s experience as co-founder of Bain Capital has turned a national spotlight on private equity as a political issue. “That’s increasing the mental share of private equity and its role in the economy in the press,” said Yasuda. “This is not an abstract, esoteric topic up in the ivory tower.”

“There is a wide variety of interesting research being conducted worldwide on private equity as it has become a core strategy for most institutional investors over the last 20 years,” said Joncarlo Mark MBA 00. “More research will help further shape how institutions will consider and allocate to the asset class.”

14 S U M M E R 2012 I N N OVATO R


FACULTY NEWS & RESEARCH

The Irrational Individual Investor

I

n the crowded field of behavioral economics and

Professor Brad Barber

highlighted the study on

Maurice J. and Marcia G. Gallagher Chair in Finance Director, Center for Investor Welfare and Corporate Responsible

finance, Professor Brad Barber has carved out

CBS MarketWatch, saying:

a niche as one of the world’s leading experts on

“This raises such questions

individual investor performance, stock buying

as: ‘Why do so many

and selling behavior, and portfolio diversification.

investors self-manage

Endowments Earn Alpha?,” shows that consistent

Over the past dozen years, Barber and co-author

portfolios when they could earn better returns

alpha returns for elite university endowments over

Terrance Odean, professor of finance at UC

with lower risk in low-cost mutual funds, such

the last 20 years—alpha meaning the returns higher

Berkeley’s Haas School of Business, have shown

as index funds? And why do investors with

than that of a standard benchmark index—come

unequivocally that “trading can be hazardous

portfolios of individual equities actively trade

from not stocks and bonds but from private equity

to your wealth.” Their latest working paper, “The Behavior of Individual Investors,” sifts through 37 years of research. “The investors who inhabit the real world and those who

when doing so lowers “The bottom line is that investors

their expected returns?’”

who don’t know they perform poorly

A lt er n at i v e

end up believing that they’re doing

I n v es tm e n t s Fue l

well—the incompetent are unaware.”

E n d owm e n t s

— Larry Swedroe

After years of double-digit

Buckingham Family of Financial Services

populate academic models

incurred by elite university

are distant cousins,” Barber and Odean note. “In theory, investors hold well diversified portfolios and trade infrequently so as to minimize taxes and other investment costs. In practice, investors behave differently.” Barber and Odean say that individual investors who ignore advice to buy and hold low-fee, well-diversified portfolios, generally do so to their detriment. Larry Swedroe, a principal and research director for The Buckingham Family of Financial Services,

returns, the steep losses endowments in 2009

caused schools like Princeton and Harvard, which relied heavily on endowment funding for ongoing operational expenses, to slash spending. Many began to question the investment model endowments like theirs tend to follow. Barber partnered with Guojun Wang, a UC Davis economics Ph.D. candidate, to analyze university endowment returns using data from 1991 to 2010. Their working paper, “Do (Some) University

ecognizing his internationally renowned

The top five university endowments—Harvard, Yale, Stanford, Princeton and The University of Texas—collectively manage almost a fourth of the $350 billion managed by all university endowments combined. Barber and Wang found that the returns earned by these endowments are driven by large allocation to alternative asset classes (e.g., private equity and hedge funds). For institutions with smaller endowment funds, alternative asset classes play a relatively small role in explaining returns. The strong returns earned by elite institutions can be entirely explained by their allocation to alternative asset classes. “Clearly, the public stock and bond benchmarks do not represent alpha-generating asset classes,” Barber and Wang conclude. “However, one might argue the alternative investment strategies themselves represent alpha.” >> www.gsm.ucdavis.edu/barber

A Trailblazer in Statistical Analysis

R

and hedge funds.

Professor Chih-Ling Tsai

Robert W. Glock Endowed Chair in Management

higher number of

research contributions and teaching excellence,

variables, Tsai’s methods

possible keywords,” said Tsai. This is important since

UC Davis recently honored Professor Chih-Ling

can effectively identify

different keywords yield different sales results.

Tsai with the title of Distinguished Professor. The

the most important

designation is the highest campus-level profes-

information in a dataset

Tsai and his co-authors applied their statistical

sional faculty title.

with a large number of variables. The statistical

model to a real dataset from a major wireless

model Tsai helped develop can be applied to

phone company, using it to quantify the influence

of statistics in business, including regression

many fields, including business, biological

an individual customer has on the phone usage of

analysis, model selection, high-dimensional data,

science, computer science and social science.

other customers. If the company could identify

A pioneering expert in the practical application

time series and biostatistics, Tsai has published

Tsai has recently completed two working papers

In “Network Regression for Covariance Estimation,”

those customers who most frequently communi-

more than 100 research papers during his career.

in high dimensional data analysis. In “Testing

cated with others using the same service, it could

His current work is in the extremely competitive

Covariates in High Dimensional Regression,” he and

invest in incentives to encourage that influential

field of high dimensional data analysis, in particular

his co-authors applied their theoretical results for

customer for promotions, which would increase

when the number of variables in a dataset is

studying how keywords contribute to a retailer’s

overall usage and, as a consequence, revenue.

greater than the sample size. Where typical

online sales. “We have developed a method to

statistical methods become less effective with a

identify significant keywords from the larger set of

>> www.gsm.ucdavis.edu/tsai

U C D avis Graduate School of Management 1 5


FACULTY NEWS & RESEARCH

Planning for Uncertainty in Power Generation

R

enewable sources such as wind and solar power are an increasing part of the nation’s energy mix, but these green resources also bring new uncertainty to our power supply. Professor David Woodruff is collaborating on a new, federally funded project to help power utilities navigate in this new reality. “The goal is to be able to plan to generate power in the face of the uncertainty caused by a 30 percent penetration of renewables in the power supply,” said Woodruff.

Woodruff and Distinguished Research Professor Roger Wets in the UC Davis Department of Mathematics, both leading experts on optimization under uncertainty, have teamed up on the $3 million, two-year project with partners at Iowa State University, Sandia National Laboratories, Alstom Inc. and the Independent System Operator (ISO)–New England. The team’s goal is to develop tools for power utilities and regional system operators such as ISO–New England. The project is funded through the Green Electricity Network Integration program of the U.S. Department of Energy’s Advanced Research Projects Agency–Energy. The Department of Energy also funded some of the basic research leading to this project.

Professor DAVID WOODRUFF

Wind and solar power bring big advantages in reducing carbon emissions, but power generation can drop suddenly with cloud cover or a change in wind speed. To compensate for that, power system managers keep extra capacity from coal- and gas-fired plants in reserve. That means that the effective cost of power can fluctuate over a few hours or even minutes. Woodruff, Wets and their colleagues are pursuing an optimal way to hedge against fluctuations in regional power supply on time- scales from 45 minutes, a few hours or 24 hours. They will exploit large-scale computational models to explore all the possibilities and come up with optimal hedging strategies. >> www.gsm.ucdavis.edu/woodruff

Stock Values Rise When Companies Disclose “Green” Information

T

he past year has witnessed an explosion of research supporting the Voluntary Disclosure Theory, which suggests that how much a company discloses is in direct correlation to investors’ premium, increased stock price, elevated consumer trust and a more powerful employer brand. According to a recent study by Professor Paul Griffin, it pays to be green. Griffin and his co-author, Yuan Sun of UC Berkeley, tracked stock prices of firms around the time these companies voluntarily issued press releases disclosing carbon emission information. The study, “Going Green: Market Reaction to CSR Newswire Releases,” uses the archives of the Corporate Social Responsibility Newswire to identify climate change related press releases issued by companies between 2000 and 2010. For the 172 companies identified as making voluntary disclosures, average stock prices increased just under a half percent in the five-day span around the disclosures, according to the study.

16 S U M M E R 2012 I N N OVATO R

“Companies should not be as reluctant as they have been to provide this information because we show that it can be shareholder positive,” Griffin explains. “Investors are saying they would prefer to invest in an environmentally responsible firm.” Co rp o rat e B o n d Marke t R esearch E ar ns B es t Paper Awar ds

Griffin has teamed with Assistant Professor Hyan Hong of the University of Memphis on research focused on the impact of short sellers on the corporate bond market. Savvy investors who follow short sellers to predict bearish news about a company’s stock­­­­­­­­—and sell their stocks in that company to avoid losses—should also keep an eye on the company’s bonds, according to their working paper, “Price Discovery in the Corporate

Professor Paul Griffin

Associate Dean of Academic Affairs

Bond Market: The Informational Role of Short Interest.” Their study won both the Best Accounting Paper and Overall Best Paper from more than 90 submissions at the 2012 Financial Markets and Corporate Governance Conference hosted in April by La Trobe University in Melbourne, Australia. New A pp o i n tm e n t as A ss o c i at e Dea n o f Aca d e m i c A ffa i rs

On July 1, Griffin began a three-year term as associate dean for academic affairs. Griffin previously served in the position from 1999–2004. Dean Steven Currall appointed Griffin to step in for Associate Dean Michael Maher, who is on medical leave. >> www.gsm.ucdavis.edu/griffin


DISTINGUISHED DISTINGUISHEDSPEAKER SPEAKERS

Amory Lovins Calls for Farewell to Fossil Fuels by Mar i a n n e S k o czek

“W

hat if we could make energy do our work without working for our undoing?” With this provocative question, Amory Lovins, co-founder, chairman and chief scientist of the Rocky Mountain Institute, launched into the topic of his book, Reinventing Fire: Bold Business Solutions for the New Energy Era, a detailed strategy for business to help wean the U.S. off of its dependency on oil and coal. A Harvard and Oxford dropout, Lovins has published 29 books and hundreds of papers, and received numerous awards, prizes and fellowships. Named one of the world’s 100 most influential people by Time magazine, Lovins counsels governments and firms worldwide on energy and resource efficiency. He toured UC Davis on February 28, including the West Village development, the world’s first net-zero energy community (pictured). Later, he spoke to a capacity audience at an event co-sponsored by the Graduate School of Management and the UC Davis Energy Efficiency Center, which he serves as an advisory board member. He outlined how the U.S. can secure a safer, healthier future by ending its reliance on fossil fuels and other risky energy sources. Lovins offered actionable solutions for transportation, buildings, industry and electric power generation. By 2050, he said, the U.S. can grow its economy by

158 percent while eliminating the need for oil, coal, nuclear energy and one-third of the natural gas—and save $5 trillion in net-present-valued cost.

“We need to use energy in a way that saves money, modulate demand to match energy’s real-time value, and optimize supply from the cheapest, least risky sources,” he said. The effort “must be led by businesses for profit” and “driven from the C-suite,” with a focus on outcomes rather than motives.

“We need to use energy in a way that saves money, modulate demand to match energy’s real-time value, and optimize supply from the cheapest, least risky sources.” — Amory Lovins, Co-founder, Chairman and Chief Scientist, Rocky Mountain Institute

Blueprint to the new energy era Business can become more competitive, profitable, and resilient by leading will build a stronger economy, a more secure nation, and a healthier environment.

TODAY

35%

America gets 90% of its energy from oil, natural gas, coal and nuclear. Our aging infrastructure demands refurbishment to meet 21st century needs.

26% 22%

OIL

NATURAL GAS

COAL

9% NUCLEAR

5%

3%

BIOMASS HYDRO

1% OTHER RENEWABLES

SHARE OF U.S. PRIMARY ENERGY CONSUMPTION EXCLUDING FEEDSTOCKS. TOTAL ADDS TO 101% DUE TO ROUNDING.

L

GN

OI

I RE

FO

90

21g

TRANSPORTATION Every day, moving people and goods burns million barrels of oil – costing American drivers $2 billion directly and $4 billion in additional hidden costs.

ELECTRICITY

86%

13

BUILDINGS America’s 120 million buildings consume of the nation’s energy – more than any other sector, and more than any country but China and the U.S.

INDUSTRY

42% K E Y

D R I V E R S

76%

of the industrial sector’s energy use comes from fossil fuels. Graphic courtesy Rocky Mountain Institute

T O

B l uepr i n t t o t he e adoption n ergy era • Wide of energy-efficient

• Ultralight low-drag autos • Electrified autos • Productive vehicle use • Superefficient trucks and planes • Advanced biofuels needing no cropland • Revenue-neutral feebates

of U.S. electricity is generated from natural gas, coal, and nuclear in large, centralized powered plants.

C H A N G E

• Wide adoption of energy-efficient technologies • Integrative design • Thorough use of cogeneration • Fuel-switching • Dematerialization and closed material cycles • Revolutions in biomimicry & additive manufacturing

technologies

• Superefficient end use • Divers e, largely distributed,

renewable-dominated supply Business can become more competitive, profitable and resilient by leading the • Easy-to-us e, IT -based controls • Smart, secur e, resilient grid • Integrative design • Full competition between • Next-generation and transformation from fossil fuel to codes efficiency and renewables. This transition will build investment options equipment standards • Fast, broad, transparent mark • Easy-to-access, low-cost financing a stronger economy, a •more secure nation and a healthier environment. • Utilitie s’ and customers’ Valuing non-energy benefits

2050 our addiction to fossil fuels, create the core industries of the new energy era, generate $5 trillion in

23%

ets

incentives aligned

26%

43%

U C D avis Graduate School of Management 1 7

4%

4%

HYDRO

HYDROGEN

NON-CROPLAND

NATURAL

WIND, SOLAR, AND


DISTINGUISHED SPEAKER

Patagonia’s Prescription for a Healthy Planet by Mar i a n n e S k o czek

O

“This was a fundamental lesson. Make a change motivated by environmental concerns and have it be an economic benefit.”

n Black Friday—the day after Thanksgiving, when retailers’ ledgers turn from red to black—the outdoor-clothing maker Patagonia shocked shoppers with a full-page ad in the New York Times. Above a photo of a top-seller ran the admonition: Don’t Buy This Jacket. Noting that our culture of consumption is leading to environmental bankruptcy, the ad asked consumers “to buy less and to reflect before you spend a dime on this jacket or anything else.” In the following days, said Rick Ridgeway, Patagonia’s vice president of environmental initiatives and special media projects, “close to 35,000 people took our Common Threads pledge to reduce purchases and to repair, reuse or recycle their belongings.” Ridgeway spoke at the Graduate School of Management on January 24 as part of Sacramento NPR affiliate Capital Public Radio’s environment-energy news initiative. A long-time Business Partner of the School, CPR launched the initiative last year at Gallagher Hall, the School’s LEED Platinum–certified campus home. Patagonia has fostered an eco-minded business strategy since 1972, when founder Yvon Chouinard first devised and sold new mountain-climbing equipment that left the mountain unscarred. “This was a fundamental lesson,” said Ridgeway: “Make a change motivated by environmental concerns and have it be an economic benefit.”

“We’re looking at a fundamental shift in how business is done that will help move us to a postindustrial, sustainable economy.” — Rick Ridgeway Vice President of Environmental Initiatives and Special Media Projects, Patagonia

18 S U M M E R 2012 I N N OVATO R

An acclaimed writer, photographer and Emmy Award–winning filmmaker, Ridgeway oversees Patagonia’s Common Threads Initiative and Freedom to Roam, which seeks protection for wildlife corridors. He also manages the company’s book and film-production division. “Business is a series of choices,” said Ridgeway. In 2010 he formed the Sustainable Apparel Coalition to create an ecoindex that quantifies the environmental and social/labor impacts of these choices for apparel and footwear, from natural resource extraction to manufacturing, packaging, transportation, use and— ultimately— disposal. Coalition members include the EPA, Gap, Levi Strauss, Nike, Patagonia, Target and Walmart. “This index is a game changer,” said Ridgeway. “We’re looking at a fundamental shift in how business is done that will help move us to a post-industrial, sustainable economy.” View the video of Ridgeway’s presentation @ >> www.gsm.ucdavis.edu/ridgeway


DISTINGUISHED DISTINGUISHEDSPEAKER SPEAKERS

Curing the U.S. Healthcare System

“We can get there in several years if we re-engineer care, make care safer, connect care, re-price care, computerize care data, and regulate a few key pieces of care.” — Kaiser Permanente President and COO Bernard Tyson

Kaiser Permanente President Bernard Tyson Offers Model for Reform B y TIM A K IN

W

ith the landmark Affordable Care Act upheld by the Supreme Court as healthcare spending skyrockets to more than $2.7 trillion this year—nearly 18 percent of the U.S. GDP—medical costs are big pocketbook issues for government, businesses, and both insured and uninsured Americans. Despite investing more per capita on health care than any other nation in the world—nearly $5,000 per person per year—the outcomes don’t match up. The U.S. ranks 27th out of 30 industrialized nations for life expectancy at 77 years; lags behind 40 other nations in infant mortality rates; and is in the middle of the pack with mortality due to heart disease at 106 deaths per 10,000 people, according to the Kaiser Family Foundation. Kaiser Permanente President and COO Bernard J. Tyson calls it an “inefficient, broken” system based on “perverse incentives” that “cripples innovation” and wastes $800 billion annually on health care that “doesn’t make us healthier.” Appearing as a Dean’s Distinguished Speaker in San Francisco in January, Tyson presented an eye-opening overview of the nation’s lopsided healthcare distribution system, in which 80 percent is spent on 20 percent of the population for endof-life care, chronic illness and acute care. Headquartered across the bay in Oakland, Kaiser Permanente is the nation’s largest nonprofit integrated network, serving more than 9 million members in nine states and the District of Columbia. Tyson oversees

Health Care in the U.S.

5,000 27TH

$

PER PERSON PER YEAR

OUT OF 30 FOR LIFE EXPECTANCY

students, and its Sacramento Service Area has supported the School as a Business Partner for more than 16 years. “Health care in America is performed on

18%

OF U.S. GDP

more than 48,000 nurses, 37 hospitals, and 600 other medical buildings, partnering with more than 16,000 physicians. Iconic industrialist and shipbuilder Henry J. Kaiser founded Kaiser Permanente in 1945 to provide affordable and highquality medical care for his companies’ workers and their families. “More than 60 years later, we are still trying to carry forward that mission—it’s in our DNA,” Tyson said. “We work very hard on prevention and early detection,” Tyson said. “Investing upstream helps our members and is much more efficient.” Tyson said Kaiser Permanente’s marketleading stake in cutting-edge technology and data analysis are key to “connected care” that includes 24/7 access to electronic healthcare records, registries that track care gaps and one of the world’s largest online medical libraries. Attracting management talent is crucial, Tyson said. Kaiser Permanente is a top employer of UC Davis MBA alumni and part-time MBA

the back of a disjointed, disconnected paper system—that’s a dangerous proposition for the American people,” Tyson said, holding

up his iPhone to unveil the latest technological leap for Kaiser Permanente members. “We’re now in the app business: your medical records go with you wherever you are.” Tyson said ingenuity and innovation focused on quality, accessibility and affordability of health care are necessary for meaningful reform. “We can get there in several years if we re-engineer care, make care safer, connect care, re-price care, computerize care data and regulate a few key pieces of care,” he said. Tyson outlined Kaiser Permanente’s three principles of reform: universal coverage, care delivery reform and a focus on prevention and community health. “We are big enough to serve as a case study for the rest of the country,” said Tyson, sharing a slide with a ringing endorsement from President Obama: “…if we could actually get our health-care system across the board to hit the efficiency levels of a Kaiser Permanente…we actually would have solved our problems.” View the video of Tyson’s presentation @ >> www.gsm.ucdavis.edu/tyson

U C D avis Graduate School of Management 1 9


ALUMNI SPOTLIGHT

Peter Buggy Leads New Directions in Healthcare Strategy Alumnus Enjoys Long, Healthy Career at Kaiser Permanente

A

s Kaiser Permanente’s director of strategy management, Peter Buggy leads a high-powered team of business consultants who work with the health plan’s business lines to better execute strategies and measure their success. Often termed the model for the future of health care, Oakland, Calif.–based Kaiser Permanente is the nation’s largest not-for-profit health plan and health care provider. What motivated you to earn an MBA?

I joined Kaiser Permanente as a health plan representative in San Joaquin County in 1985. Several years later, I had been promoted to area marketing director for Sacramento and the Central Valley. My supervisor suggested that while I had strong relational and communication skills, my relative weakness in analytical skills would likely limit my career. I took her words to heart and determined to earn an MBA. I selected UC Davis for its strong quant program. How has your UC Davis MBA helped you advance professionally?

My MBA studies focused on finance and healthcare management. With this knowledge and my new analytical skills, I was able to transition from a line management role to more strategic leadership roles at the regional and statewide levels. My career has been heavily influenced by one of Professor Michael Maher’s courses that included Kaplan and Norton’s book The Balanced Scorecard as required reading. I became very interested in strategy execution and performance management, and my enthusiasm eventually translated into my current position.

20 S U M M E R 2012 I N N OVATO R

What’s most exciting—and most challenging—about working in health care?

Back in the mid-1980s, healthcare organizations had just started to focus on sales and marketing. It was a thrill to be part of the team expanding Kaiser Permanente’s operational footprint throughout the Central Valley. The market was simpler then, and we were able to compete and grow by emphasizing our advantages in price, convenience and quality. Today’s market is extremely complex in terms of product offerings, funding mechanisms, distribution channels, market segmentation and customer expectations. Making health care affordable, and hence more accessible, is the single greatest challenge. The promise

“My career has been heavily influenced by one of Professor Michael Maher’s courses that included Kaplan and Norton’s book The Balanced Scorecard as required reading. I became very interested in strategy execution and performance management, and my enthusiasm eventually translated into my current position.” — Peter Buggy MBA 99 Director of Strategy Management Kaiser Permanente

B y Mar i a n n e S k o czek

and uncertainty created by healthcare reform has resulted in both opportunities and risks in the short term. You’ve worked with a UC Davis MBA consulting team and represented Kaiser Permanente at a recent career fair at the School. What motivates you to help students advance?

I enjoy being a good thought partner as students figure out what interests them and where the opportunities are. And I am thrilled when they can match their interests to an opportunity at Kaiser Permanente. Five years ago, we had between three and five UC Davis MBAs working here; today we have 30. That’s a testament to quality graduates and the relationship the School has built with us.


ALUMNI SPOTLIGHT

New Ventures

Revolights

Lighting the Way, One Revolution at a Time

J

im Houk and Adam Pettler, both MBA 11, want to revolutionize how cyclists see and are seen at night. Eighteen months ago, the pair teamed up with Stanford inventor/engineer Kent Frankovich to found Revolights Inc. and develop a wheel-mounted bicycle lighting system that offers optimal nighttime illumination. Unlike traditional bike lights–which focus primarily in one direction—Revolights casts 360 degrees of light, boosting biker safety by increasing their visibility to drivers. “Our MBA studies provided a solid foundation for entrepreneurial success,” says Houk. He and Pettler developed a comprehensive business plan for their venture in a group study course. A Business Development Clinic “further demonstrated the complexity involved in evolving an idea into a commercially viable product,” Houk

Ruhstaller Beer

Photos courtesy Revolights

by Mar i a n n e S k o czek

adds. “The candid feedback from my professors and peers was invaluable.” Last fall Revolights launched their project on kickstarter.com, the world’s largest funding platform for creative projects, seeking $43,500. They received $215,621 in pledges from 1,442 people in just over a month. They’ve since won praise from CNN, TEDxVienna, CNET, Gizmodo, CORE77, Fast Company and PC World. Revolights plans to ship its first 900 preordered Kickstarter units late this summer, followed by a domestic launch, with international expansion soon thereafter. With an undergraduate biology degree and a seven-year stint in the biotech industry, Pettler says he is really “a science guy at heart—one who these days builds

(From left) Revolights founders Kent Frankovich, Jim Houk and Adam Pettler in the original Revolights workshop/HQ. In typical Silicon Valley style, the start-up’s first five prototypes were designed and built in Frankovich’s Palo Alto apartment.

bike lights. But my MBA studies taught me to think like a businessman.” And this is paying off for his company. “We plan to realize the market’s true potential,” says Houk. “We are currently a niche product, compatible with only specific bike rims. Our pipeline includes future Revolights versions that will be able to adapt to a variety of additional wheel types.” >> www.revolights.com

A New Point of Brew

J

an-Erik Paino MBA 09 began brewing the idea for a new career when a New Business Development class project led him to delve into first Sacramento’s history—and then its beer. The founder and proprietor of Ruhstaller Beer, one of a new batch of craft breweries in the capital region, Paino credits his UC Davis MBA with the experience and network to successfully resurrect a local legend. “From the Gold Rush until Prohibition, Sacramento was the beer capital of the West Coast,” Paino says. Dominant among

the city’s dozen breweries was Ruhstaller, founded in 1881. Today, four decades after the original Ruhstaller brewery closed its doors, Paino and his team—which includes Liz Harris MBA 09 as project manager—are on a mission to bring back Captain Frank Ruhstaller’s legacy.

“In many ways, Ruhstaller’s rebirth began at the Graduate School of Management,” Paino says. “Liz’s husband introduced me to craft beer our first year, and Liz and I collaborated on a number of projects as students. “Later, the School’s MBA Consulting Center completed a very effective project for Ruhstaller. And Charlie Bamforth—UC Davis’ Anheuser-Busch endowed professor of malting and brewing sciences and one of the world’s top brewmaster generals— has been generous with his insight, advice and support.” “At Ruhstaller, we wear many hats and need to switch gears rapidly,” says Harris. “The Graduate School of Management gave me a great foundation to handle the varying roles I fill on a day-to-day basis.”

Photos courtesy Scott Duncan/ Midtown Monthly

by Mar i a n n e S k o czek

Ruhstaller emphasizes local and regional ingredients, including hops grown in nearby Winters. A vintage truck delivery the kegs and bottles to up-market pubs, select specialty grocers—and festivals and other events.

>> http://ruhstallerbeer.com U C D avis Graduate School of Management 2 1


SCHOOL NEWS

Green Power Sources, Baby Products and Cancer Treatment Win at Big Bang! Business Plan Competition Bay Area MBA–Led Team Takes First in Medical Technology Track B y K are n N i k o s

T

he biggest bang in this year’s UC Davis Big Bang! Business Plan Competition came from the S2E Energy founder with a thin, transparent material designed to conduct the sun’s power more cheaply and efficiently than existing solar technology. As firstprize winner, Jon Servaites took home $10,000 at the May 25 finals of the 12th annual competition, which is organized and run by UC Davis MBA students. Second prize of $4,500 went to the creator of Happy Baby Vending machines, for on-the-go access to diapers, organic snacks and other baby products. The People’s Choice Award and $2,000 went to Roadwise Technologies, which has developed a thin film that can be installed under asphalt to capture energy created by the sun’s heat and the pressure of passing vehicles.

15,000

$

Medical Technologies Track winner

Bay Area MBA students Joanie Cheung (front), a systems engineer at Roche Molecular Diagnostics, and Candice Pereira, a service sales manager at Bio-Rad Laboratories, present the business plan for Integrated Cancer Therapeutics, which won $15,000 as winner of the Big Bang! Medical Technologies Track funded by a National Science Foundation grant.

22 S U M M E R 2012 I N N OVATO R

“Just as a faster computer chip can enable a faster computer, a more conductive transparent conductor will enable a higher efficiency solar cell, or higher power solar cell—think of it as ‘Intel Inside’ for solar.” — First-place winner Jon Servaites, CEO, S2E Energy

S ee i n g a B r i gh t er Fu t ure i n S o l ar

S2E Energy, formerly known as Simple Cleantech, sells a platform solar cell component that, according to Servaites, outperforms existing components by a factor of four, which leads to efficiency gains of 25 percent to 30 percent or higher compared to existing technology. “Just as a faster computer chip can enable a faster computer, a more conductive transparent conductor will enable a higher efficiency solar cell, or higher power solar cell—think of it as ‘Intel Inside’ for solar,” said Servaites, S2E Energy’s chief executive officer. His goal is to find five beta customers— large solar cell manufacturers—willing to test the technology as a drop-in replacement product in the existing manufacturing process. Servaites is a 2010 graduate of UC Davis’ Green Technology Entrepreneurship Academy, run by the Graduate School of Management’s Child Family Institute for Innovation and Entrepreneurship. He earned a doctorate in materials science and engineering at Northwestern University, where the initial technology for the S2E Energy solar cell was developed. Co n v e n i e n ce fo r New Pare n t s o n -t he- G o

Erica Harris said the idea for Happy Baby Vending came from an incident a few years back when she ran into a woman in need of a diaper for her baby. The woman ended up leaving a cheerleading competition,

in which another child was participating. “I thought: There should be a better way for mothers to do this—there should be vending machines,” said Harris, a 2008 UC Davis graduate with a bachelor’s degree in clinical nutrition. In two years, with the help of her mother as primary investor, Harris has installed four Happy Baby Vending machines at shopping malls in the Los Angeles area, with plans to expand to Ventura County this summer and to have 180 vending machines statewide in five years. H ar n ess i n g H i ghway E n ergy

In winning the People’s Choice Award, third-year UC Davis law student Ryan Lore, team leader for Roadwise Technologies, won over the audience with his description of how to collect energy from highways. “The pressure of the passing cars, combined with the hot roadway, creates a lot of energy that we can use.” With the technology that Lore’s team of chemists, engineers and law students helped develop, energy can be harnessed and sold to utilities or companies. The Dynafilm technology can be used on existing asphalt. The next step: expanding an existing beta test to a larger scale 12-foot-by-12-foot section of asphalt. C uro G e n Na n ot ech n o lo gy A i m s to I m prov e C he m ot herapy

With two UC Davis Bay Area MBA students who work in the biotech field presenting the plan for Integrated Cancer Therapeutics


SCHOOL NEWS First-place winner Jon Servaites, CEO of S2E Energy, is a graduate of the UC Davis Green Technology Entrepreneurship Academy. He sees a brighter future through his transparent conductor solar cell component.

1ST

PL ACE WINNER

2012 Big Bang! Sponsors G OLD

DLA Piper S ILV E R

Boutin Jones Inc. Sacramento Metropolitan Utilities District (SMUD) UC Davis Child Family Institute for Innovation and Entrepreneurship B RON ZE

Bank of America Central Valley Fund Alumnus Mark Otero MBA 07 PIPRA Sierra Energy Wavepoint Ventures In-kind

Lamplighter Financial UC Davis Graduate School of Management

(ICT), the start-up took home a $15,000 award in the Big Bang! Medical Technology Track for their work on CuroGen, a unique nanotechnologycarrier drug delivery system that targets

2ND

the chemotherapy drug at urinary bladder cancer tumors. The UC Davis­­–based innovation is in the preclinical trial stage. Med Tech Track prize funding came from a Partnerships for Innovation grant from the National Science Foundation— a grant that established the UC Davis Medical Technology Commercialization Clinic. Graduate School of Management graduate Gabriela Lee MBA 04, the chief knowledge transfer officer at the UC Davis Center for Biophotonics Science and Technology, presented the award, which encourages students to pursue innovative breakthroughs in medicine. Bay Area MBA student Joanie Cheung, team leader for ICT, said CuroGen seeks to improve the efficacy and lower the side effects of bladder cancer chemotherapy.

People’s Choice Award

PL ACE WINNER

UC Davis clinical nutrition graduate Erica Harris (far left) won second place for her Happy Baby Vending machine start-up, and (from second from left clockwise) UC Davis School of Law student Jennifer Maguire, chemistry Ph.D. Andrew Davidson and School of Law student Ryan Lore’s Roadwise Technologies business plan won the People’s Choice Award.

Cheung has partnered with fellow Bay Area MBA student Candice Pereira, a service sales manager at Bio-Rad Laboratories, and UC Davis School of Law student Yi Yao, who brings intellectual property experience to the team. “As this therapy becomes the most effective bladder cancer treatment, it will control the growth of cancer cells effectively and reduce pain,” said Cheung, a systems engineer at Roche Molecular Diagnostics. Graduate School of Management alumnus Brian Woodall MBA 06, a Big Bang! judge, praised the quality of entries. “The ideas we saw today were more developed than a lot of business plans,” said Woodall, CEO of Lamplighter Financial.

Professor Andrew Hargadon, director of the Child Family Institute for Innovation and Entrepreneurship—an adviser for the competition—encouraged participants to pursue their entrepreneurial dreams. “Starting a business is more accessible and acceptable than it ever has been,” he said. Each year, the Big Bang! competition brings together interdisciplinary teams of students, university researchers and faculty, with mentors from the region’s business community. Some of Northern California’s largest employers, venture capitalists and law firms provide the prize money, coaching and volunteer judges. Since its founding in 2000 the Big Bang! has produced many teams that have become successful start-ups. >> http://bigbang.gsm.ucdavis.edu U C D avis Graduate School of Management 2 3


SCHOOL NEWS

M A R K

Otero ;–)

Risks Everything to Follow His Passion

Alumni Association Honors Global Gaming Entrepreneur By T i m A k i n

Depressed, exhausted and nearly broke two and half years ago, Mark Otero lay curled up in a fetal position, “paying dearly” for pursuing a childhood passion he was still not ready to give up.

A

fter earning his UC Davis MBA in 2007, Otero made a risky and radical move to put his new knowledge and skills into play—literally. He quit his $130,000-a-year job as a financial analyst, sold his home in Sacramento’s Oak Park neighborhood, maxed out his credit cards, then raided his retirement account—all to launch a gourmet yogurt shop, Mochii Yogurt. Meanwhile, in a small office upstairs, he and a partner parlayed the cash flow from the frozen confections to code and coddle a dream to create virtual, viral and profitable applications and games. Inspired by Otero’s enthusiasm, ideas and vision, a handful of diehard developers and designers joined his new venture, KlickNation. They rolled out 30 smartphone apps that eventually counted more than 400,000 users worldwide, many in non-English speaking countries like Romania, Chile, Mexico and Thailand. But the flame was flickering out. The apps weren’t making enough money, and Otero’s debt was piling up. The explosive growth of Facebook presented a new opportunity: Otero and the team set out to bring to the social web the scale of success of the fantasy role-playing board

MBA 2007

24 S U M M E R 2012 I N N OVATO R

game Dungeons & Dragons, in which Otero had become a dungeon master by age 10. With the IRS knocking on Otero’s door, KlickNation’s product No. 31 had to be a hit. Otero and his team huddled around computers in the office above the yogurt shop in early 2009, working feverishly to finish the first social game to feature animated battles and allow users to buy extra powers and weapons. Reinvesting every penny into KlickNation and unable to pay for counter help, Otero often ran downstairs to serve up frozen yogurt. He then worked late into the night on game specs, catching Zs on the sofa. The perseverance paid off. Otero’s Superhero City came to the rescue, pulling in $5,000 a day by the end of 2009. Its success allowed Otero to grow KlickNation to more than 70 employees, move to a twostory, 11,000-square-foot headquarters in midtown Sacramento and open a business development office in San Francisco. In 2010, Otero inked a multi-million dollar deal with NBC Universal. But he had even bigger plans. Last December, KlickNation’s ascent lured one of the world’s largest video

gaming companies to Sacramento. Otero negotiated with Silicon Valley–based Electronic Arts to purchase KlickNation for a reported $35 million to become part of EA’s wildly popular BioWare gaming division. Now Otero is a general manager of BioWare Social, with 70 employees in Sacramento and 45 more in Redwood Shores creating fantasy and sci-fi roleplaying games. “When you have 30 failures, you are either a madman or you are onto something,” Otero told the audience at the Graduate School of Management’s Pier-to-Peer event in February, where he shared his rags-to-riches story experience bootstrapping KlickNation. For his entrepreneurial business success and support of the School, Otero was honored with the GSM Alumni Association’s Distinguished Achievement and Outstanding Service Awards, becoming the first alumnus recognized with both in the same year. Otero consistently credits his success to his MBA experience at the Graduate School of Management. In recognition of what UC Davis has given him, he has given back to his alma mater with time, expertise and financial support. He made a significant, multi-year major gift pledge


“The skills and knowledge I gained at UC Davis enabled me to scale KlickNation from two to a team of 70 in just 24 months.” — Mark Otero, with his team at the midtown Sacramento headquarters of then-KlickNation, which soon after became part of Electronic Arts’ BioWare division in a reported $35 million deal with Otero as general manager.

to the School to name the Otero Faculty Resource Center in Gallagher Hall in memory of his sister, Elizabeth. Otero also gave a gift to support faculty in marketing and entrepreneurship—key areas among the building blocks for his success. “The skills and knowledge I gained at UC Davis enabled me to scale KlickNation from two to a team of 70 in just 24 months,” Otero says. “Along the way, I tapped into organizational behavior and commitment theory for recruitment and team building; finance and accounting to shape a sustainable business; and courses that fueled my entrepreneurial drive. Today I’m running on the thrill of doing exactly what I want to do.” And Otero continues to build more bridges to UC Davis. He has supported the School’s Business Partnership Program and Big Bang! Business Plan Competition. As a high-tech job creator, he has plugged into campus for new hires, bringing aboard UC Davis MBA alumni and other UC Davis graduates. They are helping BioWare ramp up a portfolio that attracts millions of players worldwide on Facebook and other social networks.

;–)

Recognizing Otero’s success, Chancellor Linda Katehi asked him to be the sole alumni speaker at the 2011 Convocation and at the UC Davis new student orientation last fall. At both events, he gave inspiring and energetic speeches. Otero also has become a high-profile business leader in Sacramento, showing his commitment to growing the capital region’s economy. He is a member of the Next Economy Leadership Group, which is mobilizing stakeholders to forge new joint ventures and collaborative strategies to encourage innovation, new business development and build a stronger, more sustainable economy. And most recently, Otero accepted Dean Steven Currall’s offer to serve on his advisory council. “It’s so crucially important for young people to see Sacramento as a breeding ground for exciting start-up companies,” Currall said. “Mark is so valuable in the current economic circumstances as a role model to others.”

Social Networking at Pier-to-Peer Event: In February at Carnelian by the Bay in San Francisco, Mark Otero MBA 07 accepts the GSM Alumni Association’s Distinguished Achievement and Outstanding Service Awards. He is the first alumnus to be recognized with both honors in the same year.

U C D avis Graduate School of Management 2 5


SCHOOL NEWS

Honoring Our Best and Student Scholarship, Leadership Recognized

by Mar i a n n e S k o czek

Newberry Fe l low J e n n i fer Lo n g Lea ds by L i s t e n i n g

The Stephen G. and Shelley A. Newberry Distinguished Student Fellowship, the Graduate School of Management’s largest privately funded fellowship award, supports students who have a broad base of experience—and who show exceptional potential as team leaders in business. This year’s Newberry Fellow, Jennifer Long, found the School’s dramatic rise in the rankings among U.S. business schools a powerful draw. “I wanted to be a collaborator in that ascent,” she says, “by helping shape student experiences at this top-tier school.” As president of the Associated Students of Management (ASM), Long has helped to strengthen the School’s diverse community. A full house of 225 students, alumni and business partners connected at Casino Royale, a “friend-raiser” held in San Francisco’s Fort Mason Center last fall. “Most important to our success,” Long says, “was turning everyone on the ASM board into a star contributor. I led by

listening first, by knowing the people around me. I led by finding ways to create success for others on individual, team and organizational levels.” Long’s management studies have focused on entrepreneurship and strategy. Last summer she interned in the investments office at the

A lu m n i A ss o c i at i o n Fe l lows S h i n e

Each year the Graduate School of Management Alumni Association awards fellowships that recognize a top student in each of the School’s MBA programs. Candidates are nominated by students, faculty and staff for their passionate and energetic leadership, community building and service to the School. Established in 2004, the awards are funded by donations to the GSM Annual Fund. The 2011–2012 Alumni Association student fellows are (from left) David Thayer, Bay Area MBA program; Robert Schumann, Sacramento MBA program; and Tarren Corbett, Daytime MBA program.

26 S U M M E R 2012 I N N OVATO R

Sacramento headquarters of CalPERS, the nation’s largest public pension fund. Before coming to UC Davis, she was president of the board of directors of the Wellspring Renewal Center in Anderson Valley, Calif., and a project manager at GM Green Real Estate in San Francisco.


SCHOOL NEWS

Brightest

“Beta Gamma Sigma recognizes these students’ excellence in their academic work. It helps them stand out from the crowd, and sends a message to prospective employers and business partners about their potential for superior performance as employees and managers, as well as personal attributes such as honesty and integrity.” —Associate Dean and Professor Hemant Bhargava

H o n o r i n g M BA E xce l l e n ce

A number of Graduate School of Management friends have established scholarships for MBA students who excel both in and outside the classroom, and who have shown great potential. Congratulations to this year’s recipients. N i l i sha S . A grawa l A war d

Established by alumna Nilisha Agrawal MBA 08, this award supports an MBA student in strong academic standing who is interested in a concentration in accounting and/or finance. Timothy Wood, Daytime MBA Program W i l l i a m F. a n d J ea n M . A l l ewe l t A war d

One of the School’s first endowed awards, this scholarship supports a full-time MBA student in good academic standing. Meeta Dash, Daytime MBA Program B ra d A t w o o d S ch o l arsh i p

Virginia and Greg Kelsch established this scholarship to honor former UC Irvine Vice Chancellor Brad Atwood’s pivotal role in recognizing Virginia’s potential and encouraging her early in her career. The scholarship supports an MBA student who plans to pursue a career or who has an interest in not-for-profit organizations and management. Tarren Corbett, Daytime MBA Program C a l i f o r n i a W i n e I n d us t ry Ma n age m e n t E d uca t i o n A war d

This endowed fellowship, which honors the strong partnership the California wine industry has with Professor Emeritus Robert Smiley, is given to an outstanding MBA student who is interested in a career in the wine industry. Carolyn Dicharry, Daytime MBA Program

Associate Dean and Professor Hemant Bhargava inducted 38 UC Davis MBA students into the international honor society Beta Gamma Sigma in January. The society is open to MBA students enrolled in programs accredited by the Association to Advance Collegiate Schools of Business International. Only those in the top 20 percent of their class are eligible for BGS membership, the highest national recognition an MBA student can receive.

J a m es R . a n d G e o rg i a K . C o rbe t t Fe l l o wsh i p f o r S t u d e n t E n t repre n eurs

Established by James and Georgia Corbett, passionate mentors and long-time supporters of the School, this fellowship is awarded to an outstanding MBA student who has the motivation, potential and passion to succeed in the entrepreneurial world. Tomas Sudnius, Daytime MBA Program Kenneth E. and Joanne M. N i t zberg S ch o l arsh i p

In appreciation for what UC Davis has meant to them, Ken and Joanne Nitzberg made this gift to benefit re-entry women students in the MBA program. The two-year

endowed fellowship honors Ken’s mother, who completed her college education after raising her family. Ming Ong , Daytime MBA Program J er o m e J . a n d H e l e n S . S ura n Fe l l o wsh i p

Established by Senior Lecturer Emeritus Jerry Suran and his wife, Helen, these fellowships recognize and support students in good academic standing across the School’s MBA programs. Laurie Grimsman, Daytime MBA Program Jesson Joy, Sacramento MBA Program Ashley Shah, Bay Area MBA Program

U C D avis Graduate School of Management 2 7


SCHOOL NEWS

MBA Programs Rank among Best in U.S. 17th Consecutive Year Part-time MBA Jumps into Top 6%, Full-time MBA among Top 8% B y T i m

T

TOP

Full-time MBA PROGRAMS U.S. News & World Report

Akin

Fu l l-t i m e M BA a m o n g To p i n U. S. fo r 17 t h Y ear

The UC Davis full-time MBA program remains firmly ranked among the premier business schools for the 17th consecutive year, having ascended a record 14 positions last year. U.S. News & World Report’s latest ranking places the UC Davis full-time MBA at No. 36, and among the top 8 percent of the 441 AACSB International– accredited full-time master of business administration programs. “The latest U.S. News & World Report rankings attest to the success of our MBA programs. During the past two years, our programs have risen significantly in the rankings,” said Dean Steven C. Currall. “Our commitment to excellence drives our dual mission of pursuing cutting-edge scholarly research that advances global business and creating a transformative learning experience in a tight-knit, collaborative community,” Currall said. “The result: enterprising, bold UC Davis MBA graduates with the fundamental skills and hands-on expertise to execute and help grow businesses.” The full-time MBA ranking is based on several key metrics: student selectivity (grade point average, GMAT score and percentage of applicants accepted by the school), reputation polls of recruiters and peers (business school deans and MBA program directors), job placement success for graduates and average starting salary.

6

%

TOP

Part-Time MBA PROGRAMS U.S. News & World Report

10

%

TOP

U.S. MBA PROGRAMS for 17 consecutive years U.S. News & World Report

NO.

6

WORLDWIDE FOR FACULTY QUALITY The Economist

NO.

4

diversity of corporate recruiters The Economist

10

%

TOP

worldwide for coursework, research and activities that prepare mBa s for social, ethical and environmental stewardship Aspen Institute’s Center for Business Education: Beyond Grey Pinstripes

IT

UT

M

B

IN

s

OCIAL AN R S D

100

FO

EN

P R E PA R I E • NG

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ST

he UC Davis Graduate School of Management’s part-time MBA program offered in Sacramento and the San Francisco Bay Area moved up significantly to among the top 6 percent of AACSB International–accredited programs nationwide, according to U.S. News & World Report’s latest graduate business school rankings released in March. The School’s part-time MBA program placed No. 19 among U.S. business schools, up 13 positions from No. 32 last year—one of the largest jumps among the top part-time MBA programs ranked this year. That places UC Davis among the top 6 percent of the 326 AACSB International–accredited part-time MBA programs surveyed, and a steady move up since U.S. News & World Report began ranking part-time MBA programs three years ago. This latest national recognition represents an all-time high for the UC Davis part-time MBA program. U.S. News changed its part-time MBA program rankings methodology this year, re-weighting from 100 percent to 50 percent the peer assessment by business school deans and MBA directors and adding four other factors: part-time MBA students’ average GMAT score, average undergraduate GPA, work experience and the percentage of the business school’s fall 2011 MBA enrollment that is part time.

8

%

ASP

Top

MBA PROGRAMS

beyond grey pinstripes

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28 S U M M E R 2012 I N N OVATO R

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edu/mbarankings


SCHOOL NEWS

“It’s about taking the value that we bring and spreading it throughout the business community as a whole. It’s not just a project for our sponsor companies. It goes a lot wider than that and ultimately, for us, to be recognized as a leading university for these types of partnerships.”

MBA students Grace Wang (middle) and Adam Baillie debrief with Orlando Harris about their team’s experience on a recent project to help the Sacramento Municipal Utility District (SMUD) predict

— Orlando Harris, Director of

and compensate for fluctuations in the energy supply from renewable sources such as wind

Corporate Relations

and solar. SMUD is the nation’s sixth largest customer-owned electric utility.

Orlando Harris Brings Corporate Relations to Next Level Sponsor Projects to Give MBA Students Crucial Hands-on Experience

G

lobal corporations to agile start-ups that are looking to solve pressing business operations issues and strategic challenges have a new friend in Orlando Harris, who has joined the Graduate School of Management as director of corporate relations. Harris brings more than 25 years of experience in business develo rewarding hands-on experiences. This fall, second-year full-time MBA students will be the first to participate in the new core course, Integrated Management Project (IMP). Teams of five students will work on 20-week projects that Harris is designing and lining up with sponsor companies. IMP is coupled with the Articulation and Critical Thinking (ACT) course, anchoring the School’s new IMPACT curriculum. The new required core project course takes the success of the School’s MBA Consulting Center to the next level. For several years, students have taken a

10-week elective course, working in teams on consulting projects for dozens of firms, big and small, from many industries. Now the student projects are doubling in length and Harris is traversing Northern California, especially the San Francisco Bay Area. He’s meeting potential corporate sponsors and aligning their needs with the expertise that UC Davis and MBA students can offer. “It’s about taking the value that we bring and spreading it throughout the business community as a whole,” Harris says. “It’s not just a project for our sponsor companies. It goes a lot wider than that and ultimately, for us, to be recognized as a leading university for these types of partnerships.” After graduating from Alabama A&M University with a bachelor of science in business and from the U.S. Army Quartermaster School, Harris started his career with IBM and then moved to Hewlett-Packard. He also ran American

By J oa n n a Co r m a n

Express’ Western Region for four years, spent nearly five years with Gartner Inc. and about a decade with Xerox. He’s also been an independent consultant. At a kick-off meeting last winter with a corporate sponsor and a student team, Harris quickly realized the project’s scale would go beyond the agreed timeframe and spoke up. It helped the company to more clearly define the scope, says Alok Sanghavi, a Bay Area MBA student and the team leader. Sanghavi welcomes Harris’ new role and is looking forward to students having a greater choice of projects. “It’s not just the number of projects, but it’s also the quality of the projects,” he says. “Orlando can really make a difference.”

U C D avis Graduate School of Management 2 9


SCHOOL NEWS

Will Snyder Leads New Master of Professional Accountancy Program Former Deloitte Partner Brings Energy, Expertise and Enthusiasm By J oa n n a Co r m a n

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ill Snyder retired last December after teaching accounting for more than 22 years at San Diego State University. Less than a month later he jumped at the opportunity to take the helm of the UC Davis Graduate School of Management’s new Master of Professional Accountancy (MPAc) program that starts this fall. As executive director, Snyder leads the MPAc program and will teach three of the courses. The School’s nine-month program is the first professional accounting master’s degree program at a University of California campus. An expert in financial and tax accounting, Snyder brings more than two decades of award-winning teaching experience and top-line professional industry practice. He started his career as a certified public accountant and was a partner at Deloitte, one of the Big Four global accounting firms. After teaching several college courses while working at Deloitte, Snyder found a new calling as a full-time accounting professor at the Charles W. Lamden School of Accountancy at San Diego State University. He retired from SDSU with

more than three dozen teaching honors to his credit, including named the annual “Most Influential Faculty Member” a record 12 times. He also taught accounting at his alma mater, the University of Southern California. In 2010, Snyder was recognized as an Outstanding Accounting Educator by the 36,000-member CalCPA and the California CPA Education Foundation. The award honors full-time accounting educators who have “made a significant contribution to the growth and enhancement of the education profession through course development or research relating to study, teaching and practice of accountancy.” Snyder is putting his entrepreneurial spirit to work at UC Davis at a historic moment for accounting education in California. Beginning in 2014, a new law will require those seeking a Certified Public Accountant license in the state to complete five years of post-secondary education at an accredited college or university. While a master’s degree is not required, the UC Davis graduate degree will exceed the state’s new education requirements

Accounting Ranks among Best Jobs in 2012 Field Offers Outstanding Career Potential

and give students a definitive edge in their careers in an increasingly competitive and growing global industry, Snyder says. Starting the degree program two years before the law goes into effect shows the School is innovating ahead of the curve, including building key relationships with top accounting firms to hire UC Davis graduates, Snyder says. “That we’re jumping in now can only pay tremendous dividends down the road,” he says. “My hope is other institutions and the profession will be looking to UC Davis’ Master of Professional Accountancy program as the new model. We can be the leader that starts out in front.”

Daria Costello, the new MPAc program manager, has been working closely with Snyder. His energy and enthusiasm for teaching and the profession, she says, have a huge impact on prospective students. “They will have the benefit of working with an expert in his field who is also so clearly dedicated to their success.” >> www.gsm.ucdavis.edu/snyder

15.7% PROJECTED GROW TH

ADDITIONAL

190,700 JOBS TO BE FILLED

The Bureau of Labor Statistics projects 15.7 percent

And, two of the nation’s top five best paying cities

Report how important it is for aspiring accoun-

growth for accountants between 2010 and 2020,

for accounting work—San Francisco and San Jose,

tants to become certified. “It’s really the gold star

which is much faster than the average growth for

Calif.—are near UC Davis.

on the resume,” she said, primarily because certified

most other professions. An additional 190,700

The School’s Master of Professional Accountancy

public accountants must take courses each year

accounting and auditing jobs will need to be

will qualify graduates to take the CPA exam in

to maintain their certification, which is useful to

filled during that time period. The profession’s

California. Rebecca Mahler, manager of career

employers. “It’s an invaluable credential, and you

promising outlook has earned it the No. 21 spot on U.S. News & World Report’s Best Jobs of 2012 list.

research and student organizational partnerships

get a 10 to 15 percent higher salary.”

at the American Institute of Certified Public Accountants, recently told U.S. News & World

30 S U M M E R 2012 I N N OVATO R

>> http://money.usnews.com/careers/ best-jobs/accountant


SCHOOL NEWS

Bill Sandefer Joins as Senior Director of Admissions By T i m A k i n

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ill Sandefer, who for the past 15 years served as director of admissions at the Freeman School of Business at Tulane University, joined the Graduate School of Management in June as senior director of admissions. Sandefer oversees admissions for all of the School’s academic programs: Daytime MBA program, part-time MBA programs in Sacramento and San Ramon, a new Master of Professional Accountancy program and the undergraduate Technology Management Minor program. “Joining the Graduate School of Management is a dream job,” Sandefer said. “It’s an opportunity to become part of a team with the potential and willingness to reach even greater heights.” While at Tulane, Sandefer managed recruiting and admissions for six graduate management programs, including full-time MBA, part-time MBA and master’s programs. He also served briefly as interim director of career management in the

wake of Hurricane Katrina. Before Tulane, he worked at Lockheed-Martin in corporate communications, at SECOR Bank/First Financial Bank in marketing and at Klein & Associates in advertising and public relations. “Bill brings a wealth of high-level experience, vision and leadership in the business school market as we expand our degree programs and continue to seek the best and brightest students,” said James Stevens, assistant dean of student affairs. Sandefer has been very active and visible in the graduate management education industry, serving in key roles with the Diversity MBA Advisory Board, the Graduate Management Admissions Council, the National Association of Foreign Student Advisors, and at the Council for the Advancement and Support of Education’s conferences. Originally from Kansas, Sandefer called New Orleans home since college. He did his undergraduate and graduate work in mass communication at Loyola University. >> www.gsm.ucdavis.edu/sandefer

Expanding Our Outreach and Philanthropic Support Introducing Leigh Ann Hartman and Lana Wickliffe By T i m A k i n

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ith the $1 billion Campaign for UC Davis closing in on a goal of engaging 100,000 donors to support the university’s mission, the Graduate School of Management has brought aboard two experienced professionals to help donors connect with and invest in the School’s priorities, programs and initiatives. In early June, Lana Wickliffe joined as director of development, a new position, followed by Leigh Ann Hartman as senior director of development later in the month. “Leigh Ann and Lana bring valuable experience in higher education and nonprofit management,” said Judy Nagai, assistant dean of development and external relations. “They both have business degrees and understand the impact that philanthropy

has on our ability to provide the best student experience for generations to come.” Coming from the Big 12 Conference, Hartman previously served as director of development at the Kansas University (KU) Endowment Association. She spent nearly seven years building support for KU’s School of Engineering, raising more than $6 million during her tenure. She also served as a regional development officer and helped launch a $1 billion campaign for KU. She was a member of the Engineering Development Forum Executive Committee from 2008–2011, and is a former steering committee member for the Women Philanthropists for KU. Previously, Hartman was the coordinator of alumni relations and public relations at Missouri Valley College. Hartman earned her bachelor’s degree in business administration from Missouri Valley College, and an MBA from the University of Central Missouri. “I’m looking forward to pairing individual passions with the needs of the School to enhance existing programs, add unique opportunities and strengthen the value a degree from the Graduate School of Management holds in industry,” Hartman said. Moving from the Lone Star State, Wickliffe brings more than six years of experience managing corporate workplace campaigns for the United Way of Metropolitan Dallas, where she stewarded loyal

Leigh Ann Hartman

Lana Wickliffe

donors and built new relationships to establish corporate donor programs. She worked closely with volunteers to help them create successful workplace campaigns, including one at Frito-Lay that raised more than $3 million annually. Wickliffe was previously an account executive at Moroch, J. Walter Thompson and Publicis advertising agencies. She earned a bachelor of business administration from the other “Aggie” university: Texas A&M. “This is an exciting time of growth and potential at the Graduate School of Management,” Wickliffe said. “My experiences at the United Way helping major donors match their philanthropic interests will be very helpful working with those who want to further the School’s mission and secure our future as one of world’s top-ranked business schools.” >> www.gsm.ucdavis.edu/hartman >> www.gsm.ucdavis.edu/wickliffe

U C D avis Graduate School of Management 3 1


BEYOND CLASS

Our Journey to Visit the Oracle of Omaha MBA Students Meet Warren Buffett B y S ara Lygre n M B A 12

B reak i n g B rea d w i t h B u f f e t t :

The Graduate School of Management group E d i to r’s n ot e : Friday, March 30, marked the sixth time UC Davis MBA students rubbed shoulders with Berkshire Hathaway chairman and CEO and legendary investor Warren Buffett in his hometown of Omaha, Neb. For the 20 students invited this year, like the others before, it was the opportunity of a lifetime. This is an excerpt from student Sara Lygren’s blog about their experience.

F

ollowing in the footsteps of past UC Davis MBAs, several of us arrived early to volunteer at Girls Inc. of Omaha, an organization that helps girls succeed in school and life, which is supported by the Buffett family. We planted spring seedlings with the girls and returned Saturday to help the administrators spruce up the facility. Friday’s fast-paced itinerary began with an early morning tour of Nebraska Furniture Mart, a Berkshire Hathaway subsidiary acquired in

1983, which is home to “4 food groups”: furniture, flooring, appliances and electronics. Our tour, led by Executive Vice President Bob Batt, the grandson of the late founder Rose “Mrs. B” Blumkin, gave us insight into Berkshire’s culture. Later in the day we toured Borsheim’s Fine Jewelry and Gifts, also a Berkshire Hathaway–owned company. From the Nebraska Furniture Mart, we sped off toward the Field Club of Omaha to get the best seats in the house for the Q&A session with Buffett, who was a jovial host, asking us to help ourselves to a table full of Coca-Cola products.

“Find your passion and follow it. Figure out a way to play it for all it’s worth.”

— Warren Buffett

MBA students (left to right) Sara Lygren MBA 12, Dipna Kishore MBA 12 and Heather Riggs MBA 12 strike a “Charlie’s Angels”—style pose with Warren Buffett, who was game for just about any photo opp. W arre n ’ s A n ge l s :

32 S U M M E R 2012 I N N OVATO R

thanked Warren Buffett with a UC Davis gift basket and plaque at the luncheon.

“Berkshire makes a profit on one of every 11 Cokes, so at least open one and pour it on your neighbor,” he joked. Buffett chimed in on issues ranging from the European Union and taxes to career advice and value investing. “I learned from Ben Graham at 19, and the value investing principles are still the same today,” he said. Regarding corporate responsibility and accountability, Buffett said he instills in his managers that “doing something just because the other guy is doing it” is never acceptable. In a holding company with 270,000 employees, there’s undoubtedly something illegal going on at any moment, he said, so managers must watch out for those infractions and be guardians for the company’s reputation. Buffett hosted us for lunch at Piccolo’s, his favorite local restaurant, graciously driving four students from the various business schools with him, including Bay Area MBA Vianna Quock. After lunch and photo opps, we presented him with a basket of UC Davis goods and a plaque thanking him for his dedication to entrepreneurship. Buffett thanked us, saying the pinball machine affixed to his plaque was a replica of those he leased to drugstores while in high school in the 1940s. We left Omaha feeling inspired and lucky, armed with sage advice for how to conduct business and pursue careers. Buffett offered us this inspiration: “Find your passion and follow it. Figure out a way to play it for all it’s worth.”


BEYOND CLASS

MBA Students Get Fired Up at Ignite in Boston Innovative Program Fuels Tomorrow’s Entrepreneurs

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hile waiting for the first speaker at the 2012 Ignite Entrepreneurship Conference in Boston, UC Davis MBA student Nandhini Raghunathan scanned the on-screen testimonials from previous attendees. “By the end of the third day,” she said. “I could see what each and every one of those comments meant.” Raghunathan and five fellow UC Davis MBA students joined students from Boston University, Baylor University and Rice University from March 1–3 for a whirlwind tour of Boston-area start-ups and venture capital firms, and to hear nearly 20 successful entrepreneurs share their stories. “It was frenetic, really fast-paced, with a positive energy. You couldn’t wait for the next thing to happen,” said UC Davis MBA student Seth Stanton, who wants to get involved in venture capital.

Many of the speakers were young successful entrepreneurs—and recent MBA graduates—including Nicholas Seet, who earned his MBA from UCLA in 2005, and has since sold two companies, IntoNow to Yahoo, and Auditude to Adobe. “You could feel they wanted to give back because they had a debt of gratitude to the people who mentored them at the beginning,” said UC Davis MBA student Robert Ryan, who joined IT consulting firm Gartner after graduating in June. “Students related very well to these young entrepreneurs because it has been only a few years since they were in the same seats as the students,” said Brad Burke, who oversees the Ignite Conference as managing director for the Rice Alliance for Technology and Entrepreneurship.

The Graduate School of Management hosted the first Ignite Entrepreneurship Conference in 2011, which included a trip to Silicon Valley to visit Google, Facebook and Sand Hill Road venture capital leaders at Sequoia Capital and Kleiner Perkins Caufield & Byers. Vanguard Ventures co-founder Jack Gill lit the Ignite flame, basing it on a similar Velocity Conference that he founded at Indiana University’s Johnson Center for Entrepreneurship & Innovation in 2000. Gill is a professor in the practice of entrepreneurship at Rice University, lectures at Harvard Medical School and top business schools, and serves on the Graduate School of Management’s Dean’s Advisory Cabinet. He taps his vast network for Ignite’s itinerary. “I learned the power and importance of good mentorship in the early days of Silicon Valley,” Gill said. “A great, new teaching methodology was born: live ongoing case studies told by founderprincipals. Founders of companies such as Apple, Intel, Cisco, HP, Raychem and more provided inspirational storytelling, motivation and leadership, and pragmatic career counseling to aspiring young entrepreneurs. I have been practicing this teaching style for three decades and have seen firsthand the powerful impact it has.” The UC Davis MBA students’ trip was made possible by Gill’s friend and fellow Dean’s Advisory Cabinet member Art Ciocca, chairman of The Wine Group. Ciocca generously contributed $10,000 for the students’ travel costs.

B y A l ex R usse l l

Burke said next year’s Ignite will probably return to West Coast. “It’s very attractive to go back to Silicon Valley every other year, because it is a hub of activity.” Raghunathan realized that business school is a great time to launch a new venture. If it’s successful, you have a great new start-up to run, she said. If not, you have your MBA and that experience under your belt. “Everyone doesn’t want to act on ideas because they are scared of failure. I want to totally start something now.” View Ignite program, itinerary, photos @ >> www.gsm.ucdavis.edu/ignite2012

At Ignite, UC Davis MBA students (from left to right) Nandhini Raghunathan, Seth Stanton, Tomas Sudnius, Jennifer Long, Joanna Zelaya and Robert Ryan tour Promethean Power Systems, a Boston-based start-up that designs and manufactures rural refrigeration systems for developing countries.

U C D avis Graduate School of Management 3 3


BEYOND CLASS

GoodKoz Wins $10,000 in Walmart Better Living Business Plan Challenge MBA Students’ Start-up Blends Commerce, Communities and Causes B y A l ex R usse l l

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hink Kickstarter meets Etsy meets Kiva.org, all in the name of good. That’s the innovative idea behind GoodKoz, an e-commerce site to help nonprofits raise funds, being built by MBA students Dylan Fiesel and Allen Alday. Fiesel and Alday’s passion for GoodKoz carried them to the finals of the 2012 Walmart Better Living Business Plan Challenge in April at the company’s headquarters in Bentonville, Ark. There they presented their business plan to C-level Walmart executives, its suppliers and top business and sustainability leaders, who awarded GoodKoz second place and $10,000. The Walmart challenge, now in its fourth year, provides a forum for students nationwide to get valuable feedback on their ideas for a sustainable product or business solution and make them a reality. “GoodKoz.com is on a mission to connect people with the causes they care about,” said Fiesel, who described the site as

“a social marketplace for good, fostering sustainable communities by supporting local nonprofits through commerce.”

Visitors will be able to buy unique products and experiences, with a portion of the proceeds benefitting a nonprofit of their choice. “Allan and Dylan’s passion clearly came through,” said competition judge Greg Trimble, senior director of global energy development & reporting at Walmart. “I’m sure it won’t be long until we all are able to follow and fund our favorite nonprofits through GoodKoz.com.” Fiesel and Alday developed their concept last summer. In addition to its success in the Walmart challenge, the team reached the semifinals in the 2012 Dell Social Innovation Challenge. 34 S U M M E R 2012 I N N OVATO R

$10 k P r i ze M o n ey : At the finals at Walmart

headquarters on April 13, UC Davis MBA students Dylan Fiesel and Allen Alday receive their second place award from company executives (from left to right) Rob Bray, senior vice president of Walmart Realty; Claire Babineaux-Fontenot, senior vice president and chief tax officer; Fiesel and Alday; and Jim Stanway, senior director of global supply chain, who started and runs the competition.

Alumnus Ben Finkelor MBA 04, and Nicole Starsinic and Wil Agatstein of the UC Davis Child Family Institute for Innovation and Entrepreneurship, mentored Fiesel and Alday. “They helped us formulate the best way to communicate our vision and our innovation,” said Fiesel. This is the second year in a row a UC Davis MBA team placed in the top three in the Walmart competition. Last year EcoCatalytics, a new venture with technology to improve fuel cell efficiency, won third place. The team included UC Davis MBA students, a doctoral candidate in mechanical engineering, and an electrochemistry post-doctoral researcher and Business Development Fellow. At this year’s West Coast regional finals at Gallagher Hall, GoodKoz beat teams

from Stanford, UC Berkeley, UC Santa Cruz and the Presidio Graduate School of San Francisco. In Bentonville they went head-to-head with seven other regional winners—narrowed from 50 entrants. The grand prize and $20,000 was awarded to students from the University of Missouri for Enzime, which deploys enzymes to clean polluted soils by breaking down toxic substances and heavy metals. This summer, Fiesel is interning for a company in exchange for help developing a world-class front end for GoodKoz’s website. He and Alday hope to start hiring their own interns to launch a beta version of the website. “Local nonprofits are the backbone of our communities,” said Fiesel. “We’re excited to help improve their visibility, community engagement and fundraising.”

Blending commerce, communities and causes, UC Davis MBA student Allen Alday explains GoodKoz’s business plan to judges at the finals of the 2012 Walmart Better Living Business Plan Challenge.

The P i t ch :


STUDENT SPOTLIGHT

M a k in g A n

I m pac t

i n H ea l t h C are Ma n age m e n t

UC Davis Neurologist Dr. Steven Brass Seeks to Empower Doctors By J oa n n a Co r m a n

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r. Steven Brass, a neurologist with a sleep medicine specialty at the UC Davis Medical Center, has run clinics, directed sleep labs, conducted research and served as a consultant on several FDA advisory panels that approve medical devices and medications during his 14 years as a doctor. He’s at the top of his game in medicine. Now he’s positioning himself for his a long-term goal to become a hospital executive, finishing up his first year as a student in the part-time Sacramento MBA program, which holds classes on the UC Davis Health System campus. An assistant professor of neurology at the UC Davis Medical Center, Brass also directs the center’s Neurology Sleep Clinical Program and is co-medical director of its Sleep Medicine Laboratory. In the sleep clinical program, Brass evaluates patients with sleep disorders, such as sleep apnea, narcolepsy and restless leg syndrome in collaboration with his pulmonary colleagues. During the past few years, Brass has taken on several leadership roles and attended a number of leadership and management courses while pursuing a master of public health from Harvard University. With these experiences, he felt that one of the best ways he could affect patient care and influence the nation’s health system would be at a higher level. Being a hospital executive would allow him to have a significant impact on safety, quality and cost-effectiveness in healthcare delivery.

“I first got a taste of the importance of healthcare management through my master of public health training, and as I went on with different leadership experiences I realized I really enjoy it and I could make a big difference,” he says. With the nation’s healthcare industry at a historic turning point, Brass wants to help doctors make crucial decisions about the country’s fast-changing system. Issues of money are often taboo among doctors, he says, and rarely addressed in medical school. Yet in order for doctors to play a role in helping improve health care, they need to understand the financial and management side of the business. “It’s important for physicians to be more knowledgeable about healthcare costs, and to be able to balance clinical effectiveness with cost effectiveness,” he says. “If, as a physician, you do not get involved, someone else will start to make those decisions for you.” Brass received his medical degree from McGill University in 1998 before completing a residency in neurology and a fellowship in multiple sclerosis at Harvard University. His work with MS patients, many of whom had undiagnosed sleep disorders, plus his own medical diagnosis of sleep apnea in 2006, led him to pursue a second fellowship in sleep medicine. In addition to his clinical roles, Brass is leading an international sleep study, is an associate editor for the journal Neurology International and has had many articles published, including three in the prestigious New England Journal of Medicine.

“It’s important for physicians to be more knowledgeable about healthcare costs, and to be able to balance clinical effectiveness with cost effectiveness,” Brass says. “If, as a physician, you do not get involved, someone else will start to make those decisions for you.” Brass already has put his classroom experience to work. He recently prepared a presentation for the UC Davis Medical Center administration and his department chair to persuade them to buy new equipment to modernize the sleep lab. He drew on knowledge from his courses in accounting, marketing and statistics and included a financial analysis showing when the device would break even and show a profit.

U C D avis Graduate School of Management 3 5


STUDENT SPOTLIGHT

Joanna Zelaya Blazes Ambitious Path in HR Leadership Bay Area MBA Student Helps Client Firms Succeed

By J oa n n a Co r m a n

J

oanna Zelaya’s parents fled an imminent civil war in El Salvador in the 1980s and settled in Los Angeles. They instilled in their California-born daughter a respect for education and a fierce ambition. “They pushed education so much,” says Zelaya, a second-year student in the Bay Area MBA program. “They come from the camp of ‘Nobody is going to help you. You have to help yourself ’.” Zelaya started her career as an animal hospital nurse while attending California State Polytechnic University, Pomona, and worked up the ranks to management, eventually overseeing a group of emergency and critical care veterinary nurses. After eight years in animal medicine, she decided to switch careers and in 2009 joined as a consultant at TriNet, one of the nation’s largest professional employer organizations. The $200 million-a-year, San Leandro–based human resources outsourcing firm has 5,000 mostly small-business clients servicing 80,000 employees in a wide range of industries, including technology, high-tech, biotech, financial services, professional services and health care. The company works with its clients on a variety of HR matters, including payroll benefits, worker’s compensation and employer’s practice liability insurance. Looking to take on leadership responsi-

bilities as a human resources executive, Zelaya says the Bay Area MBA program is sharpening her skills and providing a well-rounded and deep knowledge of business. Her goal is to become a trusted adviser and business partner who can be consulted on all business-related questions, not just HR issues.

“I am very ambitious and I’m driven,” she says. “As a manager, I want to push myself more and manage in larger and

36 S U M M E R 2012 I N N OVATO R

“I am very ambitious and I’m driven. As a manager, I want to push myself more and manage in larger and larger settings.” — Joanna Zelaya

larger settings.” Zelaya has a bachelor’s degree in psychology, an interest in science and a love of business, which make her career goal an ideal fit, she says. At TriNet, Zelaya gives her clients, including many Silicon Valley start-ups, expert guidance about industry best practices and regulatory compliance on topics such as sexual harassment claims and termination. They want to know what is legal, how to reduce their risk of litigation, or how to improve employee morale, for example. The experience helping Silicon Valley ventures prompted Zelaya to join five other UC Davis MBA students at the Ignite Entrepreneurship Conference in Boston from March 1–3 to tour area start-ups and venture capital firms, and to hear successful entrepreneurs share their experiences. Back in the Bay Area, she says her MBA courses are teaching her how to read financial statements, which she uses to

help clients strategize about their budgets for benefits and compensation. Her negotiations class is helping her learn how to best present difficult ideas to clients. When Zelaya managed veterinary medicine nurses, she took the initiative at one hospital when employee morale was at an all-time low. There was gossiping, too many absences and internal conflicts. She persuaded administrators to hire an anonymous third party to interview employees and find out what they wanted to change. With that information, the administration formed quarterly focus groups with a list of items to address. “We saw much more collaboration and much more cohesion,” she says. “It was a step in the right direction.” Looking back, she can see what other changes she would have made. “Thanks to the MBA program, now I have the skills and know-how to apply those tools.”


STUDENT SPOTLIGHT

Lauren Davis Works and Plays Hard with Heart and Passion Sports and Marketing Interests Lead to Internship at Adidas B y J o a n n a C o r m a n

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ike a hard, game-winning spike that leaves a big impression, Lauren Davis has never forgotten the inspiring words of her junior high school club volleyball coach. “He said, ‘play with heart.’ Everything you do in life should be done with passion.” With that in mind, Davis has hit the ground running as a full-time MBA student. She’s found a new interest in marketing and new business development after a successful career in financial services. Davis’ experience as a scholar-athlete in high school and college, and her passion for high-intensity sports, has rubbed off on her business interests. She plays basketball, beach volleyball and enjoys rock climbing. And while training for a half marathon this summer, she is interning in the marketing group at the Portland, Ore., headquarters of Adidas, one of the world’s leading sports brands, focusing on Adidas’ women’s line. It’s a perfect fit, as she grew up wearing the company’s athletic gear. Her interest in marketing comes after three years charting courses for client

investments through the turbulent waters of the global financial crisis. As a registered associate at Morgan Stanley Smith Barney in Pleasanton, Calif., Davis helped manage and transfer more than $100 million in assets for high-net-worth individuals. Her team oversaw more than $200 million in assets. During the economic downturn, Davis worked with many retirees and those close to retiring, helping them manage annuities, bonds, equities and other assets. At Morgan Stanley Smith Barney, Davis passed the Series 7 and Series 63 exams to earn registration with the Financial Industry Regulatory Authority, allowing her to make stock trades. “That was why I became interested in financial services,” she says. “I like working with clients and helping to grow their portfolio. It’s about building relationships and hopefully having a positive effect on clients’ lives.” While earning her bachelor’s degree in business administration with an emphasis in international business at

Loyola Marymount University in Los Angeles, Davis learned the ropes of financial planning and wealth management during two summer internships at Morgan Stanley and Smith Barney before the companies merged. She also earned a certification in coaching high school girls’ volleyball. “It’s great to have the ability to positively influence and inspire young girls,” she says. Davis played club volleyball in junior high and high school. Her team, Golden Bear Volleyball, competed in the Junior Olympics in Salt Lake City. “To reach that point where you’re at the absolute top of your game is an incredible experience,” she says. “You can push yourself as far as you want to go.” She’s doing just that at the Graduate School of Management, where she appreciates the close-knit community. She’s also honing her leadership skills as vice president of communications for the Marketing Association and as an MBA Ambassador, sharing her positive experience with prospective students. “I chose UC Davis for a reason,” she says. “I’d like to share that enthusiasm and excitement, and encourage others to do the same.”

With a love of the outdoors, Lauren Davis gets vertical on a recent trip to Yosemite National Park, just a few hours drive from UC Davis.


NEWS TICKER

UC DAVIS Wine Executive Program

Offers Grape-to-Bottle Intelligence H ow will you manage your wine business during the tight supply of grapes in the coming years? How do you create an effective social media plan for your brands? What are the opportunities in the wine market in China? These were just a few of the hot topics at the 12th annual UC Davis Wine Executive Program, co-hosted by the Graduate School of Management and the Department of Viticulture & Enology from March 26–29. The four-day program sold out, attracting 70 attendees from 13 states—California, Florida, Illinois, Maryland, Missouri, New Jersey, New York, North Carolina,

Jack Stuart (left), winemaker and general manager of Benessere Vineyards, a small, family-owned, high-end producer of Italian varietals in St. Helena, Calif., compares notes during a break with Napa Valley neighbor Gretchen Brakesman, sales and marketing manager at The Ranch Winery.

Ohio, Oregon, Texas, Washington and West Virginia—and international participants from Argentina, Brazil and Canada. Professor Emeritus Robert Smiley, director of wine industry studies at the Graduate School of Management, said the diversity of attendees created a highly interactive experience, bringing together general managers from wineries of all sizes, winemakers, marketing managers, finance and human resources professionals, chefs, restaurateurs and winery investors. “The attendees were impressive, coming from large wineries such as Constellation, The Wine Group and Delicato as well as cult wineries like Kosta Browne, and start-up wineries, suppliers and vineyards,” Smiley said. “Our sessions on current topics included an intriguing talk on the potential in the Chinese wine market by Tom Selfridge, the former CEO of Hess and Chalone.” Graduate School of Management faculty and guest experts led sessions on financial management of wineries

“This intensive program offers even seasoned industry veterans new perspectives on marketing, finance, winegrowing and other topics in a stimulating and collegial environment.  It’s also a great opportunity to compare notes with suppliers, growers, winemakers and retailers from around the world. Bravi!” —Jack Stuart, Benessere Vineyards and vineyards, macro trends in marketing communications, social media and public relations, strategic cost management in the wine industry, legal issues facing the domestic wine industry, and how to tap into the network of innovation. Department of Viticulture & Enology experts gave primers on grape growing and winemaking, analysis of vineyard site evaluation and selection, seasonal management options and costs, and winery and vineyard operations of the future. Over the past 12 years, nearly 650 wine industry professionals have attended the program, and praise the faculty, curriculum, and world-renowned wine and business expertise that only UC Davis can offer. Chase Cambron, vice president of operations for Constellation Wines’ Clos Du Bois Winery, said the program offered “an excellent overview of the wine industry from grape to bottle. The topics were extremely relevant to today’s challenges in the wine industry. I would recommend this program to anyone desiring insight into the extremely dynamic and complex industry.” >> www.wineexecutiveprogram.com

38 S U M M E R 2012 I N N OVATO R


NEWS TICKER

Photo Courtesy Phil Kampel Photography

At Sacramento City Hall, UC Davis MBA Mayoral Fellows Tiffany Tan (left) and Trevor Jha (right) work closely with Mayor Kevin Johnson on economic development and education initiatives.

UC Davis MBA Mayoral Fellows Help Propel Sacramento Forward Making an Impact in Education and Economic Development B y A l ex R usse l l

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irst-year MBA student Tiffany Tan loves basketball—and being on a team led by a former NBA all-star with a bold vision for the state capital. When Sacramento Mayor Kevin Johnson’s chief of staff visited the Graduate School of Management to present the Mayoral Fellowship program, Tan recognized it was a slam dunk opportunity. “I knew Mayor Johnson was leading the charge for a new sports and entertainment complex in the downtown railyards,” said Tan, who joined fellow first-year MBA student Trevor Jha as this year’s UC Davis MBA Mayoral Fellows. Modeled after the White House Fellows Program in Washington, D.C., this special

Modeled after the White House Fellows Program in Washington, D.C., this unique partnership with the city of Sacramento gives UC Davis MBA students hands-on experience at the intersection of business and government.

partnership with the city of Sacramento gives the School’s MBA students hands-on experience at the intersection of business and government. “The Intern and Fellows Program is one of my proudest achievements as mayor,” said Johnson. “UC Davis has been an extraordinary partner in creating the kind of opportunities for MBA students that have a real impact on the residents of Sacramento while providing a unique and meaningful service learning opportunity for talented young leaders.”

“Trevor was a terrific fit for our economic development goals,” said Johnson’s chief of staff, Kunal Merchant, “and we were equally impressed with Tiffany’s passion for education reform and the unique skills and experiences she brings to the table.” Since the fellowships began in 2009, six UC Davis MBA students have been Mayoral Fellows. Jha and Tan will each earn an $8,000 stipend. At City Hall, Tan and Jha work in “the bullpen”—an open workspace with team meeting niches for those involved with the mayor’s policy initiatives. “It’s a high-energy environment,” said Jha. “Everyone is trying to get things done in less time than anyone expects.” As the Economic Development Fellow, Jha is researching other cities to identify a Top 10 list of strategies to attract and retain businesses in Sacramento. The marriage of politics and public policy is plugging Jha into a network of influential business and community leaders who have high stakes in Sacramento’s economy. Tan, who has a background in banking and finance, has a new-found passion for education working on Sacramento READS! The third-grade literacy program is being piloted in 14 public schools— and was launched last year with the help of UC Davis MBA Mayoral Fellow Tarren Corbett. Jha has met with Mayor Johnson to talk about interesting projects and to learn more about the mayor’s goals for Sacramento. “The Kevin Johnson philosophy is to bring young people in, and they can gain experience along the way. I’m not just pushing paper.”

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NEWS TICKER

Students from Historically Black Colleges Prep for Business New UC Summer Institute for Emerging Managers and Leaders

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landmark collaboration between the six University of California business schools and the nation’s historically black colleges and universities (HBCUs) launched in May with the first annual UC Summer Institute for Emerging Managers and Leaders (SIEML). The new career-building program attracted 25 undergraduates from around the country to UC Berkeley’s Haas School of Business. The two-week immersion featured company visits to Facebook and Google, a group project on open innovation and business models, and sessions on corporate social responsibility, negotiations and choosing a graduate school. Dean Steven Currall welcomed the inaugural SIEML class, which included a roughly equal number of men and women students from Howard University, Tuskegee University, Fisk University, Morehouse College and 15 other historically black colleges and universities.

Dean Currall Names K at h y G l e e d a s C h i e f Diversity Officer

Gleed, who leads the team that oversees the School’s student experience, will work closely with students, alumni, faculty and staff to continue the success of a School-wide diversity plan launched in January.

40 S U M M E R 2012 I N N OVATO R

At the first annual UC Summer Institute for Emerging Managers and Leaders held at UC Berkeley, Dean Steven Currall greets David Thomas, an undergraduate at Howard University in Washington, D.C.

Currall shared the Graduate School of Management’s culture and emphasis on building community and responsible business leadership. He then drew from Malcolm Gladwell’s book Outliers to highlight the need to work hard to develop both intellectual and practical skills to succeed as leaders. Students receive all-expenses-paid fellowships to attend the program for two consecutive years. Wells Fargo and Anthem Blue Cross provided funding for the program. One of the six UC business and management schools will host the institute each year, with UCLA Anderson hosting next summer. “Our goal is to have it at UC Davis in year three,” said Kathy Gleed, chief diversity officer for the Graduate School of Management. The program received resounding praise from UC President Mark Yudof and California Assemblymember Anthony Portantino of Pasadena, who helped spearhead the partnership between UC and the historically black colleges and universities. In a letter to Yudof, Portantino thanked him and the University of California for creating SIEML. “This collaboration will

contribute to the much-needed diversification of UC business schools and will introduce the wealth of HBCU talent to the state of California,” wrote Portantino. Yudof responded that the collaboration is “critical to our future and will provide significant opportunities for all parties involved.” He added, “UC is committed to ensuring a diverse student body at all levels of instruction, and the institute a great value to our business schools in this regard.” Most importantly, attendees came away already looking forward to next year’s institute. “The SIEML program is something that every business student should attend. It displays the essence of innovation and how to create value within a scripted business model,” said Jakari Bass, an accounting major at Texas Southern University. “The amount of information I learned in two weeks was remarkable, and I wouldn’t trade the experience for anything.” >> www.universityofcalifornia.edu/sieml


IN APPRECIATION

The Campaign for UC Davis Be Bold and Make an Impact

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re you one of the 100,000 donors who will help lead UC Davis toward its goal of raising $1 billion in philanthropic support for The Campaign for UC Davis? Your gift of any dollar amount counts. UC Davis is expanding its capacity to meet the world’s challenges and educate future leaders, and alumni and friends play an important role in this plan. The Graduate School of Management has joined this campus effort with an ambitious goal of $25 million in three key areas: faculty and student support, programs and emerging opportunities. We have made significant progress— recently surpassing $23 million, 92 percent of our goal—thanks to our many supporters. Yet, there is much more to do. We have bold aspirations for the School, and ask you to be equally bold as you think about your personal support and how you can make an impact. We invite you to join us. With your investment, you can make an impact on some of the School’s top priorities or contact us for additional options.

E NDOWM E NT S /A NN UA L FU ND

PRO G R A M S U PP O RT

G R A D UAT E FE LLOWS H I PS

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International exposure, professional development activities and other enrichment programs are important for the growth of the School. Gifts may be designated to existing programs such as the Big Bang! Business Plan Competition or to fund new initiatives, such as support for the International Study Trip.

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As state support diminishes, building the School’s endowments and unrestricted annual giving is vital to our future and mission. Gifts and pledges can be made directly to the Graduate School of Management MBA or Working Professional MBA Endowments, or to the School’s Annual Fund. Naming gifts for spaces in Gallagher Hall are also invested in our Endowment for Excellence.

FAC U LT Y C H A I RS ■■

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Honor and promote the work of a faculty member who is acknowledged as among the preeminent scholars in his or her field, and whose work has made a significant contribution to society. Our faculty members are internationally renowned experts in their fields. Continued attraction and retention of these trailblazing researchers and teachers is a top priority.

fac u lt y c h a i r / G RA D UATE f e l l ows h i p

The Newberrys endowed a faculty chair in leadership, held by Professor Kim Elsbach (right), and a graduate student fellowship.

“There’s a real opportunity for the School to differentiate itself. The GSM can move faster and be more innovative, which appeals to me. U C Dav i s M B A s t u d e n t s are i n t e l l i ge n t, ar t i cu l at e, m ot i vat e d a n d d i v erse . The

School offers a powerful learning experience, and it’s great to be a part of this.” — S t ephe n G. Newberry Vice Chairman, Board of Directors Former President & CEO, Lam Research Corp.

Help attract and inspire the next generation of business leaders to the School. Provide financial support for top MBA students, who typically face heavy financial burdens when pursuing their degree.

For the latest updates on The Campaign for UC Davis, the School’s goals and progress, and how you can make an impact, please visit

>> www.gsm.ucdavis.edu/campaign

pl anned gift

The Chins designated a percentage of their estate to the School through a planned gift.

“I want to he l p d e v e lo p a lo n g -t er m v i s i o n for the Graduate School of Management. Alumni need to ensure the School will continue to thrive. we n ee d to pl a n fo r the fu t ure

in the same way we do for our families.” o f t he S ch o o l

— A aro n B. C h i n M BA 0 0 Planning Analyst, Intel Corp.

U C D avis Graduate School of Management 4 1


IN APPRECIATION

Our Top 30 Individual and Corporate Supporters in Year 30 Over the past 30 years —since welcoming our charter class in 1981— the School has benefitted from the substantial financial support from thousands of individuals and corporations. This philanthropic support has helped the Graduate School of Management grow and excel to become one of the top business schools in the nation and recognized internationally in a relatively short period of time. As we celebrate our 30th anniversary, we thank all of our donors and highlight the top 30 cumulative individual donors and top 30 corporate supporters that have made the largest contributions to the School. We are proud to have so many dedicated and generous donors supporting management education at UC Davis.

to p 30 i n d ivi d ua l g i f ts

to p 30 CO RP O R ATE g i f ts

$10,0 0 0,0 0 0 +

$ 250,0 0 0 – $ 50 0,0 0 0

Maury 71 & Marcia Gallagher

Ewing M. Kauffman Foundation

$ 5,0 0 0,0 0 0 – $ 9,9 9 9,9 9 9

Michael 76 & Renée Child 76 $ 2,0 0 0,0 0 0 – $ 4,9 9 9,9 9 9

Charles J. Soderquist† MS 73, Ph.D. 78 $1,0 0 0,0 0 0 – $1,9 9 9,9 9 9

Stephen & Shelley Newberry

Lam Research Corp. $10 0,0 0 0 – $ 2 49,9 9 9

Estate of Victor C. Chu, Ph.D. DLA Piper US LLP Herman Miller Hewlett-Packard Co. Intel Corp. Premier Access Insurance Co.

$ 5 0 0,0 0 0 – $ 9 9 9,9 9 9

SunWest Foods Inc.

Jerry Suran & Helen Singer Suran

Wine Industry Symposium Group

$ 25 0,0 0 0 – $ 49 9,9 9 9

$ 6 0,0 0 0 – $ 9 9,9 9 9

Reza & Debra Abbaszadeh

Arthur Andersen LLP

Robert A. Fox

First Northern Bank

Miriam Glock

Franklin Templeton Investor Svcs. LLC

$10 0,0 0 0 – $ 2 49,0 0 0

James R. & Georgia K. Corbett Eamonn 71 & Kathleen Dolan Richard C. & Joy M. Dorf Robert & Helga Medearis Roger & Claudia Salquist $ 5 0,0 0 0 – $ 9 9,9 9 9

Kevin 72 & Kim Bacon 79 Richard Blumenfeld Greg B. Chabrier 76 Roy† & Edith Kanoff Mark Otero MBA 07 & Julie Ku

PricewaterhouseCoopers LLP Teichert Inc. UC Davis Health System UCC Vineyards Group Vision Service Plan Wells Fargo and Co. $ 41,0 0 0 – $ 59,9 9 9

AgraQuest Inc. Capital Public Radio Comstock’s Business Magazine Del Monte Foods GenCorp KPMG LLP

$ 25,0 0 0 – $ 49,0 0 0

KQED

Roger Akers & Carole Waterman

Murphy Austin Adams Schoenfeld LLP

Nicole Woolsey Biggart MA 77

PASCO Scientific

Robert H. Smiley & JoAnn Cannon

SBC Communications Inc.

Steven C. & Cheyenne X.Y.Z. Currall

U.S. Bank

Paul & Eva Griffin W. Jerry Hume

*As of June 30, 2012

Robert 69, MA 71 & Sandy Lorber 73 Pam Marrone & Mick Rogers MBA 93

Note: Graduation years reflect UC Davis

May Ngai Seeman MAD 89

degrees only.

Mark MBA 99 & Marissa Schmidt Chih-Ling Tsai & Angela Liao Frank & Kim Washington †Deceased

42 S U M M E R 2012 I N N OVATO R


IN APPRECIATION

THANK YOU D E A N ’ S A DVI S O R Y C O U N C IL The Dean’s Advisory Council is one of the Graduate School of Management’s strongest links to the business community. These prominent executives are key advisors to the dean and provide valuable guidance and recommendations on critical issues related to future growth and development of resources, programs, and the School’s vision and mission. We appreciate the expertise and support we receive from these dedicated business leaders.

B U S IN E S S PA R TN E R S The Business Partnership Program provides a vital link between the UC Davis Graduate School of Management and the business community. Among the School’s highest priorities is helping companies address the complex management issues in today’s competitive global economy. As a benefit, we provide Partner companies and their senior managers with opportunities to learn from each other and to network with our internationally recognized faculty, MBA students and other top executives. Through generous contributions, Business Partners make it possible for the School to provide a premier MBA experience for the next generation of corporate managers and leaders. We extend a special thank you to these corporate affiliates for their financial and in-kind support.

VSP Global’s Big Vision We recognize VSP Global for nearly 20 years as a Business Partner and for supporting management education at UC Davis.

to Our Dean’s Advisory Council and Our Business Partners R E Z A A B BA SZ A D E H, DDS

JA M E S R . E R R E C A R T E

J U DS ON T. R I G GS 85

CEO Premier Access Insurance Co.

President SunWest Foods Inc.

President & CEO Teichert Inc.

B R I A N C . H O B LIT M B A 07

C H A R L E S C A LD E R A RO

Assistant Vice President, Relationship Manager Wells Fargo and Co.

DAVID H . RUS S M A D 8 6

Vice President and General Manager Genentech Inc. G R E G B . C H A B R I E R 76

Vice President of Sales Leapfactor Inc. E A MONN F. DOL A N 8 3

Retired CIO, Managing Director C.M. Capital Corp.

MI C H A E L R . KO U R E Y 81

Operating Partner Khosla Ventures S T E P H E N G. N E W B E R RY

Vice Chairman Lam Research Corp. K ATE A. RENWICK-ESPINOSA 91

Vice President, Marketing VSP Global

Former Managing Director & Chief Investment Strategist Credit Suisse PAU L A . SA LL A B E R RY 79

Former Executive Vice President, Worldwide Operations Veritas Software GA RY D. S IMON M S 8 4

Chairman CleanStart *As of June 30, 2012

DI R E C TO RS

S E NIO R PA R TN E R S ( $ 2 , 5 0 0 – $ 4 ,9 9 9 )

( $10,0 0 0 a n d ab ov e )

Bank of the West

Nugget Markets Inc.

Capital Public Radio

Cakebread Cellars

KQED

Owen-Dunn Insurance Services

Genentech Inc.

Comstock’s Business Magazine

SunWest Foods Inc.

Downey Brand LLP

River City Bank

Teichert Inc.

Five Star Bank

Vision Service Plan

Galileo Planning Group

Sacramento Municipal Utility District (SMUD)

Hewlett-Packard Co.

SAFE Credit Union

( $ 5,0 0 0 – $ 9,9 9 9 )

Holt of California

Waste Connections Inc.

AgraQuest Inc.

Intel Corp.

Wellhead Electric Co. Inc.

First Northern Bank

Kaiser Permanente

Murphy Austin Adams Schoenfeld LLP

BioWare Sacramento

Page Design Group

Marrone Bio Innovations Inc.

M A N AG IN G PA R TN E RS

Saverglass Inc. Wine Industry Symposium Group

Polycom Inc.

KVIE Public Television

Mechanics Bank Mounier Media LLC

Headquartered in Rancho Cordova, near Sacramento, Calif., VSP Global employs 4,200 in a complementary group of leading optical companies that include the nation’s largest not-for-profit vision benefits and services company. With more than 57 million members nationwide and a network of 28,000 doctors, one in six people in the U.S. relies on VSP Global for eyecare coverage. UC Davis alumna Kate Renwick-Espinosa 91, chief marketing officer and senior vice president, recently replaced retiring VSP President Gary Brooks on the School’s Dean’s Advisory Council. “VSP Global strives to be a leader in the marketplace and in the Sacramento community, where it is headquartered,” says Renwick-Espinosa. “We support the UC Davis Graduate School of Management because we feel that creating future leaders is well worth the investment.” U C D avis Graduate School of Management 4 3


IN APPRECIATION

Entrepreneur Craig Hall Redefines Making a Businessman, Author, Philanthropist Joins Dean’s Advisory Cabinet itten by the entrepreneur bug very early, Craig Hall launched his first—and quite profitable—venture at age 10 with 50 cents saved from returning empty bottles to his neighborhood drugstore. When he saw the store was going out of business, Hall’s entrepreneurial gene kicked in. He made a deal with the drugstore owner to buy the last four bottles of a gooey syrup for a soda fountain drink called Greenrivers, which he quickly turned into greenbacks selling the drink for a nickel a glass on his street corner, making more than 100 times his investment. Hall’s early success in the beverage business would come full circle much later—in

by age 18 had banked $4,000 working long hours in many jobs and his own ventures, including a lawn mowing business and a coffee supply service for offices. He risked the $4,000 as a down payment on an old rooming house near the University of Michigan. Hall parlayed that first successful real estate investment into the foundation for Hall Financial Group. Over the past four decades, Hall has overcome huge odds, and near financial collapse, to build an

He says he’s excited to be more involved with the School, its emphasis on responsible business leadership and rising reputation for green technology innovation and entrepreneurship. international diversified company that includes real estate ownership, development and management; software application development; structured finance lending for real estate and other areas; and oil

Photo courtesy HALL Rutherford Winery

B

By T i m A k i n

the international premium wine trade. Although Hall struggled with epilepsy during his youth, he overcame it and

THANK YOU TO OUR DEAN’S ADVISORY CABINET

These senior executives offer Dean Steven Currall their expertise and advice on the strategic direction of the School. MI C H A E L C . C H ILD 76

Managing Director TA Associates Inc. A R T C IO CC A

Chairman The Wine Group D E A N A . CO R TO PA S S I

President and CEO San Tomo Inc. JAC K G ILL , P h . D.

President, The Gill Foundation of Texas Retired Managing Director Vanguard Ventures C R A I G H A LL

Chairman and Founder Hall Financial Group

44 S U M M E R 2012 I N N OVATO R

Dean’s Advisory Cabinet member Craig Hall and his wife, Kathryn Hall, former U.S. Ambassador to Austria, at the HALL Rutherford Winery and Sacrashe Vineyard in Napa Valley, one of the couple’s six estate vineyards encompassing more than 500 acres of classic Bordeaux varietals. Their pioneering HALL St. Helena winery is the first in California to receive the prestigious LEED Gold certification.


ALUMNI ASSOCIATION

Difference and gas holdings. He and his wife, Kathryn Hall, also own six estate vineyards with more than 500 acres of classic Bordeaux varietals. During his journey, Hall was a part owner of the Dallas Cowboys; formed one of the first stock savings and loans in Michigan; founded one of the first for-profit HMOs in the country; and partnered on the nation’s largest chain of health and sports clubs. He has written five books, including Timing the Real Estate Market (McGrawHill, 2004) and The Responsible Entrepreneur (Career Press, 2001), in which Hall shares his experiences and stories of others who have made a difference by showing that entrepreneurship and ethics do mix—and can literally change the world for the better. Hall has a close connection with the Graduate School of Management. He accepted Dean Steven Currall’s invitation to join the Dean’s Advisory Cabinet, and his wife’s son just completed his first-year in the full-time MBA program. He says he’s excited to be more involved with the School, its emphasis on responsible business leadership and rising reputation for green technology innovation and entrepreneurship. “When I was growing up in 1950s and 1960s, entrepreneurship was a dirty word,” he recalls. “Today, entrepreneurs help make the world go around. The ability to merge the areas of innovation with the risk-taking skillset of entrepreneurship is what led Steve Jobs to successfully create Apple. It is one of the directions we badly need in this country, and the work UC Davis is doing with the Child Family Institute for Innovation and Entrepreneurship will hopefully encourage future Steve Jobs.”

Class Notes 1989 David Chow: In January 2010, I moved to Kunming, China, to work on a nonprofit minority culture and language preservation project. I’m now a full-time volunteer. What a change after so many years of working in Silicon Valley. I appreciate the updates from my class, 1989. My wife, Carol, and I will celebrate our 30th wedding anniversary in 2014.

1991 Drew Porter: My daughter, Maddi, was admitted as an undergraduate to UC Davis for fall 2012.

1992 Pam Allio: I recently took a position in San Ramon, Calif., (a 10-minute commute) as communications leader working directly for the general manager of the Software Solutions Group within GE Energy. My role is what I want to make of it. I bring my start-up experience and corporate experience to this new location. I am excited to help them drive culture change in this division—remember the classic Jack Welch story in Don Palmer’s OB class? I’m reading some great books: The New How and technical books on agile development. My daughter is headed off to college this fall, deciding between UCLA, UC Berkeley and University of Chicago. Yes, she is driven!

1995 Erin Kahn: Grand family adventure has taken my husband, Doug, and I to Amsterdam, where his firm is headquartered. My role at HewlettPackard continues to evolve. I’ve been managing a team of global program managers creating operational process improvements and supporting HP’s global salesforce.

1997 Vinny Catalano: It was very exciting to hear that my firm, Arthur J. Gallagher & Co. Inc. (NYSE:AJG), was named one of the world’s most ethical companies for 2012. We were the only insurance brokerage selected and one of only 145 companies in the world. It’s a huge honor to be included in such a great group of companies. Michelle Kahler: I attended the GSM’s recent Sacramento Business Professional Networking Group social and realized how much I missed connecting with everyone. Since leaving the Sacramento Kings in 2006, I’ve worked as a project manager/analyst/business consultant

Online Events Calendar Find details on all upcoming events

for the California Medical Association, BearingPoint, DAVID Corporation and, for the past year, The North Highland Company. I’ve finally found my home with North Highland and very much enjoy helping clients solve their business problems. I’ve moved on from playing professional women’s football to medieval foam sword fighting and am always looking for the latest adventure!

2002      Yvette Connor: We are happily settled into Colorado with Mike and me both in new jobs and enjoying many new hobbies. I am leading a practice within Marsh’s Global Risk Management group, and very much enjoying all of the post2008 risk management professional and academic opportunities. Amelia turned 9 in May, and I find it hard to believe she was my post-MBA graduation “surprise.” Where does the time go? I hope everyone is doing well. Reach out and say “hi” if you are in the Denver area.

2006 Brian Woodall: 2011 was a year of change for the Woodalls: Dana moved from Seattle and I moved from Davis to Petaluma, Calif. (Yes, we finally live together!) I started Lamplighter Financial, a CFO outsourcing business focused on small business mergers and acquisitions. Dana became the chief of construction at the Coast Guard training facility in Petaluma. Most importantly, we welcomed our daughter, Cambria Marie Woodall, on December 9.

2010 Wayne Leighty: Quick update from Anchorage. All is well with us. I was recently promoted to business planner for Shell’s Alaska Venture, with responsibility for the venture budgeting process. I am also an adjunct faculty, teaching statistics at the University of Alaska School of Business and Public Policy. And I am serving on the board of trustees for the Alaska Nature Conservancy. Heidi is doing well in her graphic design business, with clients in California, Alaska and New York. Our biggest news is the birth of our first child in May.

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CH IL D FA MILY IN S T IT U T E f o r INNOVAT I O N an d EN T R E PR E N EU R S H I P

NetWorks

2012 annual issue

EXECUTIVE BRIEF

“UC Davis is home to an amazing array of expertise across disciplines. This institute will help our faculty and students translate their knowledge and skills into ventures that improve society and add value to the economy.”

We have seen tremendous growth over the past year. Thanks to the generosity and vision of Mike and Renée Child, the Center for Entrepreneurship became the Child Family Institute for

times, as corporations cut back on hiring, providing the opportunity for undergrads to develop entrepreneurial endeavors and create their own jobs becomes even more important.

Innovation and Entrepreneurship in fall 2011. This change reflects

We are also building new bridges to the community by partner-

our charter and mission of building a culture of entrepreneurship

ing with Davis Roots, a business accelerator located in the heart

on the UC Davis campus through our educational programs, our

of downtown Davis. Our goal: to encourage the launch of new

outreach to industry and regional partners, and our research.

businesses in Davis. The first two companies at Davis Roots are

We continue to build on our existing programs­—focused on com-

graduates of our entrepreneurship academies.

mercializing university research—and see the results in a number

If you are interested in getting involved with these exciting new

of new start-ups launched by our alumni.

initiatives, please let us know. We look forward to seeing these

We are creating new opportunities for UC Davis undergraduates

changes influence the future of the university and region.

to pursue entrepreneurial ventures. In these difficult economic

—Andrew Hargadon, Founder and Faculty Director

W

e are now the Child Family Institute for Innovation and Entrepreneurship, thanks to a $5 million commitment from UC Davis alumni Mike and Renée Child. The institute, which builds directly on the success and experience of the Center for Entrepreneurship, will help to integrate innovative and entrepreneurial thinking and actions across the university’s diverse colleges, schools, centers and organized research units. It will strengthen UC Davis’ role as a vital player in catalyzing economic development in the region, state and beyond.

“UC Davis is committed to improving society by bringing breakthrough technologies out of the university and into the world and by preparing our students to be entrepreneurial leaders. Mike and Renée are very excited about building this ecosystem of entrepreneurship across the campus.” —Dean Steven Currall, UC Davis Graduate School of Management

The institute will develop and demonstrate the commercial potential of UC Davis research in science, engineering and medical fields—where the university is a recognized leader and has strong partnerships with industry and policy makers. m >> www.gsm.ucdavis.edu/child_institute Growing Innovation: Andrew Hargadon (far left) with Dean Steven Currall, Renée Child and Mike Child (seated).

Photo: Karin Higgins

A TRANSFORMATIONAL GIFT


Davis Roots Opens Doors Davis Roots, a nonprofit business accelerator bridging the

Photo: Gregory Urquiaga

city of Davis and UC Davis, celebrated its grand opening in April. Geared toward supporting start-up companies to succeed and stay in the city, the enterprise was founded by institute Faculty Director Andrew Hargadon and Anthony Costello, a successful entrepreneur and former chair of the city’s Business and Economic Development Commission.

A Great Beginning: Davis Roots co-founders Anthony Costello and Andrew Hargadon celebrate the partnership’s grand opening at the historic Hunt Boyer Man­sion in downtown Davis. Joining them are the first tenants, (clockwise from front left) Barobo co-founders Graham Ryland and Harry Hui Cheng and Nutrias founder Nora Khaldi >> http://gsm.ucdavis.edu/davis_roots >> http://entrepreneurship.ucdavis.edu/davisroots.php

>> Hargadon Files on Capital Public Radio

Institute Faculty Director Andrew Hargadon’s writing on the intersection of sustainability and innovation now appears in The Hargadon Files, on Capital Public Radio's Environment page. >> www.capradio.org/hargadon

Emerging ventures accepted into Davis Roots’ mentoring program have access to a network of entrepreneurs, investors, patent and corporate lawyers and are supported in preparing a detailed launch strategy. Davis Roots will eventually grow to help eight to 10 start-ups simultaneously. The first two companies, founded by institute entrepreneurship academy alumni, are: Barobo Inc., launched by Graham Ryland and UC Davis Professor Harry Hui Cheng, director of the integration engineering laboratory, builds programmable robotics for the education and consumer markets. >> www.barobo.com Nuritas, launched by UC Davis post-doctoral student Nora Khaldi, employs a proprietary bio-informatics tool for discovering ”nutriceuticals,” or food components that affect health. >> www.nuritas.com

2012 Food + Health Entrepreneurship Academy Fosters Global Outreach

Academy participants met on the UC Davis campus for four days of intensive training on how to recognize and develop the commercial potential of their foodand health-related research. Sessions addressed IP protection, customer need and market analysis, technology and business validation, business planning and communication, and crafting an effective elevator pitch. Thirty-seven industry mentors shared their time, insight and experiences to help academy participants develop their commercialization plans. “I “My main area of work deals with R&D. But this is was impressed with the quality of currently not enough. What makes a difference is the students’ innovations, some of innovation. I’ll be using what I learned to motivate which had world-class potential,” my students to become entrepreneurs—and to one noted. make innovations that benefit the public and The New Initiatives/Seed Grant improve quality of life.” Program gives life to bold ideas that —Mariane Lutz, Head of Functional Foods R&D Center, Universidad de Valparaiso, Chile

foster creative programs related to international research, educational and academic activities, as well as to

The Food + Health Entrepreneurship Academy kicked off with a dynamic innovation exercise designed to get participants thinking outside the box.

programs for continuing, distance and lifelong learning and academic engagement with the broader society. “Assembling a diverse group of aspiring international entrepreneurs enriches the academy by bringing multiple perspectives to every discussion,” said Jorge Rojas, project director of the Chile-University of California Partnership at UC Davis. “Interacting with peers from other countries advances understanding, research and collaboration—and is essential in today’s interconnected world.” m >> http://entrepreneurship.ucdavis.edu/program.php

Photo: Nicole Starsinic

The fourth annual Food + Health Entrepreneurship Academy in February had a distinctly international flavor. Seven scientists and researchers from Chile and Denmark attended, thanks to a $10,000 Seed Grant from UC Davis’ Office of International Programs. They joined 28 colleagues from universities across the U.S., Columbia and the Netherlands.


SUSTAINABILITY + INNOVATION at UC Davis Our alumni launched an impressive number of new ventures in 2011/12. Their ranks include: Asceptia (Raleigh, N.C.) : Patented technology that enables production of shelf-

stable products that maintain the flavors and nutrients of fresh food without preservatives or refrigeration. Co-founder: Josip Simunovic, Food + Health Entrepreneurship Academy; North Carolina State University. >> www.aseptia.com Biochanics (La Jolla, Calif.) : Innovative problem solving and consulting services

Photo: Karin Higgins

for research and development in biotechnology, chemistry and the life sciences. Founder: Laura Gillies, Food + Health Entrepreneurship Academy; Ph.D., food science, UC Davis. www.biochanics.com Traffic Power: Roadwise Technologies, People’s Choice winner in the 2012 Big Bang! Business Plan Competition DIRECTOR’S BLOG

Universities play many roles in the innovation process. But most do not fit the traditional notion that universities create knowledge—papers and patents—which is then used to develop new products and processes. Universities do create fundamental knowledge. And as one of the biggest, most diverse research universities in the U.S., UC Davis is well positioned to address the large, interdependent problems that typify sustainability challenges, including climate change, water scarcity, nutrition, environmental collapse, global health and social equity. At UC Davis we’ve built a range of institutes and centers that are problem-focused, devoted to crossing disciplines and working with industry and policy makers in search of solutions. We’re driving innovation through a variety of powerful means: New graduates who bring the latest science and engineering knowledge and skills to both industry and the public sector. Alumni of our centers and institutes bring a focus on problems and the ability to integrate multiple disciplines to construct solutions. University-industry cooperative research centers, corporate-sponsored research and faculty consulting agreements—all focus research where need exists. Faculty engagement with critical policy issues, driven by our mission and facilitated by our location near the state capital. Entrepreneurial activity that occurs off-campus and does not involve UCD-owned intellectual property. At the Child Family Institute for Innovation and Entrepreneurship, we work with the researchers leading these diverse efforts, explore how their work can have a larger impact, and get to know the students who are taking this work to the far corners of the world. It’s a really exciting time to be on campus.

NEW ALUMNI VENTURES Black Silicon Solar (Copenhagen, Denmark) : Patented, next-generation, cost-

efficient technologies for improving silicon solar cells. Co-founder: Rasmus Davidsen, UC Entrepreneurship Academy; Technical University Denmark. >> www.blacksiliconsolar.com Flex Stage Productions (Nashville, Tenn.) : A multimedia company, providing lighting, sound, graphic design, video editing, photography, page design and more. Founder: Daniel Lee, UC Entrepreneurship Academy; Fisk/Vanderbilt University. >> www.flexstageproductions.com Joint Preservation Solutions (Sacramento, Calif.) : Products for biological resurfacing

of joints with fresh osteochondral allograft tissue. Founder: Amir Jamali, M.D., Business Development Clinics, Angels on Campus. >> www.jointpreservationinstitute.com Living Skinny in Fat Genes (Pegasus Books, 2011) : Simple principles and science help readers modify health risks, increase longevity and achieve better health. Author: Felicia Stoller, Food + Health Entrepreneurship Academy. >> www.feliciastoler.com Loengen Inc. (Berkeley, Calif.) : Fast, practical, environmentally

sensible and economically viable energy production and distribution solutions. Founder: Youval Dar, Angels on Campus; Ph.D., physics, UC Davis. >> www.loengen.com Nanocytomics Inc. (Evanston, Ill.) : Medical device company. Co-

founder and CTO: Hariharan Subramanian, Entrepreneurship Academy; Northwestern University. >> www.nano-cytomics.com

GET INVOLVED with the Institute Angels on Campus connects UC Davis students and faculty with angel investors,

who provide commercialization feedback. Foster your network on campus and see first hand potential technologies coming out of UC Davis. Chairperson on Campus brings industry executives and angel investors to UC Davis

to share their insight and experience with student teams in the Graduate School of Management’s Business Development Clinics. Big Bang! is UC Davis’ annual business plan competition, organized by the Gradu-

—Andrew Hargadon, Faculty Director

ate School of Management’s MBA students. The contest inspires and rewards innovation at UC Davis—and encourages entrepreneurship throughout the region.

Read the complete post : http://bit.ly/Hargadon

Learn more about these programs: http://entrepreneurship.ucdavis.edu


INVEST in the Institute

Individual Donors offer support at

various levels. Network Partners are active

participants in the institute’s academies and programs, and have direct involvement with our aspiring entrepreneurs. Annual pledges are available at: Gold Level : $10,000 and above Silver Level : $5,000 Academy Sponsors are highly visible corporate leaders dedicated to fundamentally changing how science and technology provide sustainable solutions to today’s greatest challenges.

Gifts to the institute are tax deductible to the full extent of the law. For additional information, contact Wil Agatstein, executive director, at 530.752.9397. >> http://entrepreneurship.ucdavis.edu/ invest.php

Good Company We are grateful for the support of: AgraQuest Mike and Renée Child Chevron Corporation Estate of Dr. Victor Chu DLA Piper DSM Ernst and Young Five Star Bank Greenberg Traurig LLC Innovation Center Denmark The Kauffman Foundation Kraft Foods Morrison & Foerster National Science Foundation Nevada Institute for Renewable Energy Commercialization (NIREC) Novartis Novozymes Partnerships for Innovation: Medical Technology Commercialization Clinic PepsiCo PG&E Sacramento Angels Sacramento Municipal Utility District Roger Salquist Family Sempra Energy Foundation Gary D. Simon Sims Recycling Solutions Charles Soderquist Family Superfund Research Program UC Office of the President UC Davis Department of Biomedical Engineering UC Davis Outreach and International Programs SEED Grant UC Davis Provost Unilever Unilever Corporate Ventures Weintraub Genshlea Chediak

“Being a Business Development Fellow is an incredible opportunity to acquire the skills and awareness that will help me evaluate technologies from a new perspective. After all, scientific ideas can only make an impact in society if they are accepted by key decision makers and customers.” —Michelle Lozada Ph.D. Candidate, Chemical Engineering

A

generous $100,000 gift from the estate of the late Victor Chu, Ph.D., will benefit the institute’s Business Develop-

ment Certificate program. The program provides UC Davis science and engineering graduate and post-doctoral students with hands-on experience in developing business skills for a career in industry—and the opportunity to develop new business ventures. Born in Shanghai, Chu earned his M.S. and Ph.D. in food science and agricultural chemistry at UC Davis. He worked for Holly Sugar, Barnes Hind and BioRad Laboratories, along with starting his own business. “Gifts like Dr. Chu’s support our vital work in providing innovative education to tomorrow’s most promising entrepreneurs,” said institute Executive Director Wil Agatstein. >> http://entrepreneurship.ucdavis.edu/invest.php

The Child Family Institute

STAFF

facultY

for Innovation and

Andrew Hargadon, Faculty Director

Wil Agatstein, Lecturer, Graduate School of Management; Retired Senior Executive, Intel Corp.

Entrepreneurship serves as the nexus

for entrepreneurship education and research at UC Davis—and as a springboard for innovative business initiatives. We are a Center of Excellence at the Graduate School of Management. >> http://entrepreneurship.ucdavis.edu busdev@gsm.ucdavis.edu 530.752.1827

Wil Agatstein, Executive Director Nicole Starsinic, Associate Director Niki Peterson, Program Manager

Steven C. Currall, Dean and Professor of Management, Graduate School of Management

Marianne Skoczek, Marketing and Communications Manager

Andrew Hargadon, Professor of Technology Management and Charles J. Soderquist Chair in Entrepreneurship, Graduate School of Management

Mara Chambers, Administrative and Events Coordinator

Martin Kenney, Professor of Human and Community Development, UC Davis Ayako Yasuda, Associate Professor, Graduate School of Management

Photo: T.J. Ushing

When you invest in the Child Family Institute for Innovation and Entrepreneurship you engage in the critical business of helping bring solutions out of the lab and into the world. Your financial contribution supports our entrepreneurship academies, Business Development Fellowships, the annual Big Bang! Business Plan Competition—and much more.


Summer 2012 innovator