Michael G. Foster school of business University of washington summer 2018
Game On Seattle has become an epicenter of the massive video game industry, and legions of Foster alumni are players page 10 Plus: King of the Mountains page 16 Masters of Finance page 20
business Dean James Jiambalvo
Associate Dean of Advancement Steven Hatting
Director of Alumni Engagement
Game On Seattle has become an epicenter of the massive video game industry, and legions of Foster alumni are players
The World to Washington, Tax Support, Research Powerhouse, Rankings Scorecard, Big Round Number, Innovations!, 27th Business Leadership Celebration, Ascend Expands, Bow Down, All Class, Ask Why, Enter The Consortium, Outside In, Going out of Business
King of the Mountains
There are volumes to learn from the explorations and adventures of Fred Beckey, the most accomplished alpinist of all time
Fosterâ€™s Department of Finance and Business Economics has quietly become a global powerhouse in research and teaching
Managing Editor Ed Kromer
Business Manager Emily Nichols
Contributing Writers Andrew Krueger, Eric Nobis, Betsy Herring, Sadie Raney, Skye Scofield, Rose Jao
Photography Matt Hagen, Paul Gibson. Archival photography courtesy of the Fred Beckey Collection and the Bob and Ira Spring Collection
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Masters of Finance
Research Briefs, How to Keep Good People, Women Up
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Foster Business is published twice a year by the University of Washington Foster School of Business. The publication is made possible by proceeds from the Ivar Haglund Endowment. No state funds are used in its production.
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Bob and Ira Spring photo
Alumni Gretchen Claflin, Yusuf Mehdi, Nancy Fulan Wang, Sam Tanner and Peter Keckemet
from the dean
Transitions As you read this, I’ll have just entered my 14th and final year as your dean at the Foster School of Business. Next year at this time I’ll be preparing for a sabbatical and updating my teaching materials as I consider returning to the classroom—an experience I’ve enjoyed for more than 40 years. Meanwhile, there’s still much to do to increase our momentum and better serve you, our students, and business partners. This is a time of transition, and as such, I would be remiss if I didn’t acknowledge a much more significant transition for the University and Washington as a whole. On March 1st, we lost a great alumnus, leader and human being in Orin Smith (BA 1965). Anyone who knew him would tell you that Orin was as humble, thoughtful and approachable as they come. At the same time, his intellect and business savvy were off the charts. All of these characteristics contributed to his success, whether it was running the state’s budget for two governors in the 1970s and 1980s or running Starbucks as CEO in the early 2000s. Under his leadership, a couple dozen stores grew into a global phenomenon. Orin had an unsurpassed head for numbers, but it was his heart that made all the difference. I first observed this trait when Orin interviewed me for the UW Business School deanship in 2005. And I was reminded of it whenever I tried to talk “strategy” with Orin, who always emphasized execution—by which he meant empowering great people to do great things. A memorial service hosted at the UW in April filled Kane Hall. Speakers included Disney Chairman Bob Iger, Starbucks Executive Chairman Howard Schultz and retired President Howard Behar, and the director of the Chehalis Foundation who spoke about the small town where Orin grew up and never left behind. My favorite part of the program, though, was when Orin’s three nieces shared stories about how his mother helped him grow into the generous and successful leader who touched so many of us. Appropriately, the memorial service concluded with an upbeat celebration of Orin’s life and legacy at Orin’s Place, our café in PACCAR Hall. With his longstanding endowed scholarship fund, his investments in our world-class facilities, and the deanship that he and his loving wife Janet established in 2016, Orin will continue creating opportunities of a lifetime at his alma mater for generations to come. He will be greatly missed but not forgotten. Sincerely,
James Jiambalvo Orin & Janet Smith Dean UW Foster School of Business
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Orin Smith (left) with ABC News correspondent Cecilia Vega, Disney Chairman and CEO Bob Iger and Dean Jim Jiambalvo at the UW Foster School's 2014 Business Leadership Celebration.
The World to Washington Global Business Case Competition celebrates 20 years of contest and cultural exchange The 2018 edition of the UW Global Business Case Competition (GBCC) was an appropriately international affair, with a dozen teams converging on Seattle from the United States, Canada, Mexico, Lebanon, Ecuador, Thailand, the Netherlands, Australia and China. As far-flung as this year’s roster may have been, it’s really just a microcosm of this 20-year global phenomenon that has drawn the world’s brightest undergraduate business students each spring for a week of company visits, education, mentoring, cultural exchange and competition around a challenging international business case written by Foster faculty. The GBCC has engaged more than 1,000 Foster student leaders, volunteers and competitors, catalyzed hundreds of friendships and professional connections—and sparked at least one international marriage.
Two decades of GBCC have drawn: 1,072 competitors from 123 universities in 53 countries on 6 continents
Tax Support MS Taxation students offer free income tax filing services Students in the Foster School’s Master of Science in Taxation Program helped 435 people file their 2017 income taxes this year—for free. Foster’s Department of Accounting joined forces with the United Way of King County in hosting a pop-up Volunteer Income Tax Assistance (VITA) clinic in Mackenzie Hall from early February through the April 17 filing deadline. In this second year of on-campus filing service, the 46 participating MS Tax students added tax preparation for international students. In total, they helped filers secure a combined $303,356 in refunds and $95,766 in earned income credit.
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Research Powerhouse Foster climbs to #3 in the world in Financial Times ranking of scholarly productivity Financial Times has ranked the UW Foster School faculty #3 in the world and #1 among public universities for research productivity. This index, a factor in the paper’s 2018 Global MBA Rankings, is derived by tallying the number of research papers by each b-school’s faculty that are published in the top 50 scholarly journals, representing every business discipline. Foster’s research faculty were also ranked #4 in the world (#1 public) in the 2017 Top 100 Business School Research Rankings, an index tracked by UT-Dallas that measures total contributions to the top 24 journals across disciplines. Discipline rankings Foster’s leading scholarship is well-distributed across academic departments. The Department of Management and Organization is ranked #1 in the world based on its 2017 publication record in the top eight management journals tracked in the Management Department Productivity Ranking. The Top 100 Business School Research Rankings lists all five Foster departments in the world’s top 25 including: #4 – Management and Organization #8 – Finance and Business Economics #11 – Marketing and International Business #11 – Accounting #22 – Information Systems and Operations Management
Big, Round Number The Seattle Growth Podcast has surpassed its 100,000th download. Season 4 of the podcast, produced and hosted by Jeff Shulman, the Marion B. Ingersoll Professor of Marketing, explored Seattle’s ongoing transformation through the eyes of its musicians, past and present. Catch up on the podcast at: seattlegrowthpodcast.com
Jeff Shulman with Jason Finn (left), drummer of Seattle's The Presidents of the United States of America.
Rankings Scorecard Foster continues strong performance across the board in 2018 program rankings Full-time MBA #15 in the nation, #3 public (Bloomberg Businessweek) #22 in the nation, #7 public (U.S. News & World Report) #23 in the nation, #7 public (Financial Times) #1 placement rate and ROI among top 25 (U.S. News) #1 for careers in tech industry (Poets & Quants) #8 in MBAs for Women (Financial Times) Since 2000, Foster has ascended a cumulative 96 places in the three most influential MBA rankings (U.S. News, FT and Businessweek)—the most dramatic rise of any b-school in the nation, by far.
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Evening MBA #13 in the nation, #7 public (U.S. News) Executive MBA #12 in the nation, #4 public (Financial Times) Undergraduate Programs #24 in the nation, #14 public (U.S. News) #23 in the nation, #10 public (Poets & Quants) #5 in hiring bonuses (Poets & Quants) #10 in access to dream jobs (Poets & Quants)
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Innovations! Get Your Innovations! Buerk Center competitions unleash student entrepreneurs across the UW— and beyond The annual rites of spring at the Foster School include several opportunities for innovative students to test their entrepreneurial mettle in competitions hosted by the Buerk Center for Entrepreneurship. The 21st annual UW Business Plan Competition crowned A-Alpha Bio as its champion. The team of UW bioengineering students took home the $25K Herbert B. Jones Foundation Grand Prize for its technology that allows pharmaceutical companies to fully characterize their drug candidates before clinical trials. The $10K Fran’s Chocolates Second Place Prize went to SclObo, a team from UW-Bothell offering a line of streetwear clothes for gamers. The $7.5K “Friends of the BPC” Third Place Prize was awarded to BeeToxx, from Washington State University, for its carbon-based micro-particle solution that protects honey bee colonies from pesticides. And the $5K Fenwick & West Fourth Place Prize went to BioPots, a collaboration of UW engineering and business students developing a biodegradable planter pot made from biomass waste such as brewer’s spent grains. At the 10th annual Alaska Airlines Environmental Innovation Challenge, BioPots earned the $15K Wells Fargo Grand Prize. The $10K Herbert B. Jones Foundation Second Place Prize went to BeeToxx. The Starbucks $5K Third Place Prize was awarded to Feros Freight Innovations, from the Universities of Oregon and Colorado, for its fuel-saving freight trailer
technology. And the $5K UW Clean Energy Institute Clean Energy Prize went to Battery Informatics, a team of UW business and chemical engineering students with an algorithmic technology to increase the life and performance of energy storage products. The third-annual Hollomon Health Innovation Challenge chose A-Alpha Bio as the winner of its $15K Hollomon Family Grand Prize. The $10K Herbert B. Jones Foundation Second Place Prize went to OLA Simple, a team of UW engineering grad students revolutionizing diagnostics and targeted therapies for genetic disorders. And the $5K Fenwick & West Third Place Prize went to ACBI, a team of UW engineering students creating an efficient device for continuous bladder irrigation treatment.
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Save The Date
November 1, 2018 27th Annual
UW Foster School Business Leadership Celebration
Ascend Expands Consulting and Business Development Center receives major investment to spur small business growth nationally
Westin Seattle Join us for a special keynote interview with Barry McCaffrey, retired four-star general in the United States Army, former cabinet member, and current professor, commentator and business consultant And celebrate our Distinguished Leadership Awardees:
Pete Shimer (BA 1984), Chief Financial Officer, Deloitte
Nancy Zevenbergen (BA 1981), Founder, President and Chief Investment Officer, Zevenbergen Capital Investments
Firoz Lalji Co-Founder, President and CEO, Zones
Martin Selig (BA 1959), Martin Selig Real Estate
For more information:
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Donna Moodie (left), owner of Marjorie Restaurant, Washington state representative Eric Pettigrew, and Phyllis Campbell (MBA 1987) and Peter Scher of JPMorgan Chase at the announcement of the Ascend 2020 expansion.
In April, JPMorgan Chase announced a new $2.5 million investment in the Foster School’s initiative to support the growth of minority-owned small businesses across the nation. Over the next three years, the Consulting and Business Development Center will expand its Ascend 2020 program from six US cities—Atlanta, Los Angeles, Seattle, Chicago, the Bay Area and Washington, DC—to ten. The next four cities will be announced later this year. By connecting minority entrepreneurs with local business schools, suppliers and community partners to improve their access to management education, markets and money, Ascend 2020 already has helped 140 businesses earn a total of $8 million in new investment since its launch in 2016. “Ascend 2020 is a model for supporting minorityowned small business that is working, and we are excited to be driving inclusive economic growth by bringing it to other US cities,” said Peter Scher, the global head of corporate responsibility at JPMorgan Chase and chairman of its Mid-Atlantic Region. “By joining forces with the University of Washington, we’re improving minority-owned businesses’ access to the capital, education and new clients they need to thrive.”
Bow Down To Washington Foster students impress at competitions around the US and the world
All Class MS Entre grads join the tradition of paying it forward through Foster
This year, teams of Foster students have posted impressive performances at intercollegiate competitions that took place all over the map. Wundergrads Foster undergraduate students finished: • 1st at the McDonough Business Strategy Challenge, Georgetown University • 1st at the National Women’s Case Competition, University of Texas • 2nd at the National Diversity Case Competition, Indiana University • 3rd at the Business Language Case Competition, BYU Also competed at the Marshall International Case Competition at USC, the McGill International Case Competition in Montreal, the Navarra International Case Competition in Pamplona, Spain, and the Belgrade Business International Case Competition in Serbia. The masters Foster MBAs finished: • 1st at the Smeal MBA Sustainability Case Competition, Penn State • 2nd at the PepsiCo Invitational Case Competition, University of Texas • 2nd at the MBA Media and Entertainment Case Competition, UCLA • 2nd at the ACG Cup Northwest, Portland • 3rd at the Emerging Markets Case Competition, University of Maryland • Best Q&A at the KeyBank Case Competition, Ohio State • Entrepreneurs’ Choice and 2nd at the Venture Capital Investment Competition (West region), University of Colorado
The “Entrepreneurs’ Choice” at the VCIC: Evening MBAs Sara Mosiman, Vera Martinovich, Renate Kroll (front row), Natalie Cook, Hillary Obye and observing Full-time MBA Austin Guyette (back row).
Many members of the Foster School Class of 2018—from undergrads to specialty masters to all manner of MBAs—have pulled together generous parting gifts to mark the commencement of greater careers. Now the inaugural class of Foster’s Master of Science in Entrepreneurship Program is joining in this tradition in a big way. One hundred percent of this cohort of budding entrepreneurs has stepped up to contribute to a legacy gift creating a new scholarship fund for future MS Entre students. This matches three straight years of full participation in Full-time MBA class gifts.
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Ask Why Deloitte Day encourages students to find their motivation March 1st was Deloitte Day at the Foster School, a celebration of the longstanding partnership with the leading global provider of professional services. Deloitte has invested more than $2 million in Foster over the past five years. It employs hundreds of UW alumni. And, in the last year alone, it extended full-time or internship offers to 64 Foster students. For Deloitte Day, the firm brought more than 30 professionals—including company CFO Pete Shimer (BA 1984) and Seattle office managing partner Ed Thomas—to meet with students in a variety of settings. There was professional “speed dating,” a tacos-and-mockaritas networking reception and a student summit on improving engagement. And there was plenty of advice at the lunchtime keynote. Thomas explained that Deloitte is a company of great people who inherently embrace its ethic of diversity and inclusion and its fundamental mission of professional service—its why. He urged the students packing Anthony’s Executive Forum to strive for the same sense of enlightenment in their careers. “Why is an important question to ask future employers, and an important question to ask yourselves,” Thomas said. “What motivates you to do what you do? I hope you associate yourself with organizations and causes that you care deeply about.” Corporate Days are offered as a benefit to Foster’s Chair Level Corporate Partners, who invest more than $100K in Foster in a fiscal year.
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Enter The Consortium Foster joins partnership of elite b-schools and corporations in promoting diversity In July, the Foster School of Business will become the 20th university to join The Consortium for Graduate Study in Management, a prestigious partnership of top-ranked MBA programs and blue-chip companies to promote greater diversity and inclusion in business education and, ultimately, corporate leadership. The Consortium works to increase the ranks of promising African Americans, Hispanic Americans and Native Americans in an exclusive list of graduate management programs that includes UC-Berkeley (Haas), Michigan (Ross), Dartmouth (Tuck), Yale, NYU (Stern), Virginia (Darden), Cornell (Johnson), UCLA (Anderson), Carnegie Mellon (Tepper), Texas (McCombs), Emory (Goizeta), USC (Marshall) and, now, UW Foster. To serve this mission, The Consortium annually awards hundreds of merit-based, full-tuition fellowships to tomorrow’s leaders, as well as membership in a global network of more than 9,000 diversity-minded alumni, member-school representatives and corporate partners. And those partnering firms—Google, General Mills, 3M, Johnson & Johnson to name a few—gain early access to a top-flight, diverse pool of talent. “Joining The Consortium moves Foster into serious consideration for the nation’s most outstanding prospective students from underrepresented minorities,” says Melissa Uyesugi, associate director of Diversity & Inclusion in the Foster MBA Program. The Consortium will begin recruiting prospective MBA students for Foster this fall for admission in 2019.
Outside In Foster’s adjunct faculty bring deep expertise into the classroom This spring Neal Dempsey (BA 1964), the venture capitalist with the Midas touch (and namesake of Foster’s Dempsey Hall), joined Neil McReynolds in co-teaching the popular and powerful CEO and Board Leadership course to Foster MBAs. Dempsey and McReynolds, the founder of a board consulting firm, are two of an elite corps of veteran executives bringing their deep reservoirs of experience and expertise into Foster classrooms. Among them: • Bill Ayer (MBA 1978), retired CEO of Alaska Air Group, leads the CEO and the Board course for Executive MBAs. • Susannah Malarkey, the longtime executive director of the Technology Alliance, teaches angel investing. • John Zagula, managing director at Ignition Capital, leads a business plan practicum.
Neal Dempsey, MBAs Jenny Nowierski and Harsha Vardhan, and Neil McReynolds outside of the Tableau headquarters.
• Michael Thomas, managing director at Russell Investments, teaches asset management. • Jacob Colker, managing director of the startup incubator at the Allen Institute for AI, teaches foundations of entrepreneurship. • Ken Meyer, prolific tech entrepreneur and former CEO of the Washington Technology Industry Association, is teaching leadership to MS Entrepreneurship students. • John Gabbert (BA 1996), founder and CEO of Pitchbook, is the Fritzky Visiting Chair in Leadership. These experts, and many others, bring an executive perspective that complements Foster’s crack faculty in teaching subjects that skew particularly practical. Case in point: the CEO and Board Leadership course, which provides an insider’s view of corporate governance and prepares students to be effective executives and board members. This transformation occurs over sessions with 18 prominent CEOs and board members—each secured through the vast and invaluable networks of Neil and Neal.
Going Out of Business… Soon Regents approve design and construction of Founders Hall Old Mackenzie Hall is on its way out. In April, the UW Regents authorized the Foster School to hire an architect and contractor for the future Founders Hall, which they also approved to replace Mackenzie, the aging administrative building, constructed in 1960. The new neighbor to PACCAR and Dempsey Halls is envisioned as a 100,000-square-foot state-of-the-art facility with more than 500 classroom seats, 40 student team rooms and expansion space for Foster’s Undergraduate Program, career services and experiential learning centers. Projected construction costs of $70 million will be funded entirely by private gifts from leadership donors, with more than $55 million raised to date. Founders Hall is projected to open its doors in fall 2021, provided the full cost of the project is pledged by next year.
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Seattle has become an epicenter of the massive video game industry, and legions of Foster alumni are players By Ed Kromer
In an old family video from the mid-1980s, four-year-old David Lau issues a statement of professional intent as adorable as it is ambitious. “When I grow up,” he chirps, “I want to run Nintendo.” “I actually used this in my application essay to the Foster School,” laughs Lau (BA 2002, MBA 2018), now a third-year student in Foster’s Evening MBA Program and founding president of the industry-centric student club, Level Up! “Running a game company is still my north star.” His options have expanded considerably in the years since that childhood declaration. Today, Nintendo is far from the only game in Lau’s hometown. Within a 30-mile radius of Seattle you’ll find myriad titans of interactive entertainment: Microsoft, Valve, PopCap, GameHouse, Big Fish, Bungie, ArenaNet, Wizards of the Coast, to name just a few, plus a constellation of independent studios. The Seattle region has become a global mecca for game developers and players alike. Perhaps unsurprisingly, Amazon has joined the action, too, through Amazon Game Studios, where Lau works as a senior product manager and game economist.
Big fish, huge pond Beyond his day job, Lau sometimes lectures on the game industry. He says that its scale is what often surprises people the most. The digital game industry is one of the fastest growing in the world, with global revenues from hardware and software expected to top $170 billion this year and hit $230 billion by 2022, according to a report by Digi-Capital. The research firm Newzoo counts 2.2 billion active gamers worldwide.
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| 11 summervS. 2018zombies Plants
Magic: The gathering
Putting the social in gaming In the early 2000s, Robert Khoo (BA 2000) turned a struggling Seattle-based online gaming comic called Penny Arcade into an online media empire by applying a sustainable business model to harness its vast community of fans. He extended that community with the Penny Arcade Expo, better known as PAX. Today, PAX Prime—the flagship of multiple expos around the world—brings 70,000 avid gamers to Seattle each summer to participate in what has been called the “Woodstock of gaming.” The community of gamers has also fueled Child’s Play, a charity co-founded by Khoo that has raised more than $40 million to provide games and toys for patients in children’s hospitals.
“When I tell people that the video game industry is three times the size of film and television combined, it’s mind-blowing,” Lau says. “Gaming is not as niche as you might think.” Washington is a major player. Most of the state’s 400 game companies exist in the ecosystem around Seattle and the Eastside, supporting more than 23,000 jobs, generating $28 billion in annual revenues and producing multiple billion-dollar game franchises, according to the Washington Interactive Network. Why Seattle? We posed that question to Lau and a baker’s dozen of the hundreds of fellow Foster alumni who have made careers in the industry, and came up with a wide range of explanations: A potent mix of artists, storytellers, software engineers and hackers. The presence of tech-minded schools like the UW and DigiPen Institute. An ethos of collaborative competition. Strong coffee that fuels creative endeavors. Persistent rain that inspires indoor pursuits. Whatever the reason, Seattle’s modern gaming history certainly begins with the arrival of an old Japanese trading card company
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that would make famous a pair of sprightly pixilated Italian brothers on a heroic quest, a cartoon ape prone to hurling barrels and fireballs, a legendary fantasy princess, and a menagerie of elusive Manga monsters. Founding players In 1984, Nintendo established its US headquarters in Redmond, a gateway to North America. “Nintendo came here initially because it was operationally efficient,” says Dylan Rhoads (MBA 2013), the product and communications manager at Nintendo Technology Development. “I don’t think it was because there was anything unique about Seattle’s culture at the time.” Nintendo of America brought gaming into homes and hands with the GameBoy, DS and Wii console systems, and introduced iconic digital franchises like Super Mario Bros., Donkey Kong, Zelda and Pokémon. It also set the foundation on which a local industry would rise. Wizards of the Coast came next, founded in 1990 by a gameloving Boeing analyst named Peter Adkison (MBA 1997). Wizards introduced Magic: The Gathering and reintroduced Dungeons & Dragons to a global audience. The analog fantasy games would inspire generations of digital strategy, adventure and role-playing games to follow. Wizards also invented the notion of character “leveling”—or evolving—and even pioneered the modern “free-toplay” economic model of gaming in the earliest online version of Magic, according to Arron Goolsbey (MBA 2000), vice president of technology and divisional CIO at Wizards. Bungie opened its doors in 1991 and created the first iteration of the Halo franchise, a wildly popular combat game now developed by 343 Industries, a subsidiary of Microsoft Game Studios.
“the video game industry is three times the size of film and television combined...” And it must be said that the company first known for Windows and Office was also an early player in home gaming. Before the many iterations of the Xbox console system and blockbuster games such as Halo, Forza Motorsports and Minecraft, there was Microsoft Flight Simulator and Reversi on Windows 1.0, back in the early 1980s. “Gaming has always been a part of Microsoft’s DNA,” says Yusuf Mehdi (MBA 1992), former head of Xbox marketing and current corporate vice president leading the Windows and Devices Group. Catching fire Valve, another local gaming giant founded in 1996, developed hit action PC-based games like Half-Life, Portal, Counter-Strike and Dota (more on this one later). But Valve has made its most indelible mark on the gaming world through Steam, the dominant platform for online games of all genre. The two sides of the business go hand-in-hand, according to Tom Giardino (BA 2010) who leads Steam’s business development and efforts to connect game developers and players. “The core of our company is building games and software,” he says. “So a lot of our platform and strategy decisions are impacted by our game teams.” In 2000, ArenaNet began developing the Guild Wars series of massively multiplayer online role-playing games (MMORPGs) sending mythical archetypes on epic adventures in a fantasy world. That same year, PopCap Games began producing casual games with sunnier dispositions such as the beguiling Bejeweled and the eccentric Plants vs. Zombies, which proved as impossible to quit as it is to categorize. “PopCap was not set up to depend on any of its games to be a hit, which led to a lot more goofy little experiments and freedom to be creative,” says retired CEO Dave Roberts, now an advisor to Foster’s Buerk Center for Entrepreneurship. “We sold fun, and it’s hard not to be enthralled about a company where your customers are so in love with your products.” More casual games came out of GameHouse, a division of RealNetworks, and Big Fish Games after the turn of the century. And scores of companies followed, especially once smart mobile devices reached ubiquity, democratizing the publishing and distribution of games, and expanding the demographic of game players from young bros to, well, everybody—from your two-year-old niece to your 92-year-old grandpa.
Today, the Seattle gaming scene spans the industry spectrum. It ranges from state-of-the-art consoles to online game portals, from immersive games of stunning artistry to whimsical distractions designed to pass the time on a long bus commute, from industry titans to tiny independent studios. Among the latter are Boomzap, Chris Natsuume’s (MBA 2006) micro-global casual game company with artists and developers scattered across the planet, and Teagmore Games, the one-woman show of Teagan Densmore (MBA 2010), creator of the charming Cracked. “There is a wonderful, thriving indie community in Seattle,” says Kristen Mann, a graduate of Foster’s Executive Development Program and veteran of local game giants Monolith and ArenaNet. “It’s a place where small companies grow, and software developers dream of creating their own games. I’ve heard the story a million times.” “Because of the concentration of successful game after successful game, it has made the industry gravitate to Seattle,” adds Lau. “Everybody is trying to catch lightning in a bottle.”
“E” for Everyone As in all tech industries, gaming has traditionally skewed young and male. But the dynamic is changing—perhaps more quickly in aftermath of “#gamergate,” the reprehensible 2014 campaign of online harassment that targeted women who produce and play video games. “Gamergate hit the industry like a bomb,” says Kristen Mann, a veteran of Seattle’s Monolith and ArenaNet. But by exposing a real and raw problem, she says it also opened eyes and genuine dialogue throughout a rapidly maturing industry. David Lau of Amazon Game Studios believes the industry must and will do more to reflect its evolving customer demographic: more women than men now play digital games worldwide. “Change needs to be led by the companies in our industry,” he says. “And not only for diversity’s sake. It’s just good business.”
Super mario Bros.
| 13 summer 2018 Moss
Free-to-play or Forced-to-pay? In the online era, the prevailing economic model for gaming is “free-to-play” or “freemium,” which allows players to begin with little or no upfront cost, then pay for incremental extras, upgrades or extended gameplay through microtransactions. Graham Kays (MBA 2008), a senior project manager at Big Fish Games, believes the model offers greater value. “In the past, games were one-price-fits-all. Maybe you pay $60 for an off-the-shelf title, whether you spend 10 minutes or a thousand hours playing it,” he says. “The free-to-play model allows us to better match the offerings with the sensibilities and needs of users.” While some see this model as terrific value and an opportunity to experiment, others decry the nickel-anddiming of game play and, in a few cases, introducing an invitation to buy an unfair advantage. “At some level,” says retired PopCap Games CEO Dave Roberts, “it becomes a religious war.” Like it or loathe it, free-to-play is here-to-stay.
Enter e-sports The latest bolt to hit the industry is electronic sports, or e-sports, the logical evolution of the crowds that used to cluster around a Pac-Man or Space Invaders virtuoso on a hot streak in the video arcade of yore. It turns out that digital games make for spectator sport as compelling as basketball, golf or poker. “Watching other people playing video games is simply living vicariously,” says Lau. “It’s no different than watching a football player play football, when you think about it. But most of us don’t even play football.” So now there are e-sports leagues and tournaments for a huge range of modern and retro games. These play out before a massive audience of 380 million viewers worldwide and generate nearly $1 billion in sponsorships, advertising and licensing, according to Newzoo. Competitive gaming is producing international stars worth millions. Some of the biggest can be found at “The International,” the Super Bowl of gaming that is hosted by Valve each year. Fans pack Key Arena to watch the world’s best teams do battle in the Valve game Dota 2 for a purse that topped $26 million last year. But 20K cheering e-sports fans crowding an arena in Seattle is small change compared to the daily audience of 15 million who watch live gaming on the online platform, Twitch, an Amazon subsidiary. Ganesh Baskaran (MBA 2013), head of product and strategy at Twitch Prime, explains that, more than the game play itself, viewers are drawn by the ability to interact directly with the players and listen in to their color(ful) commentary. Imagine being able to tap into the Seahawks’ huddle to ask Russell Wilson why he didn’t throw to Doug Baldwin, or to catch some choice smack talk by ex-Hawk Richard Sherman at the line of scrimmage. “People are coming to expect a degree of interactivity in all forms of entertainment,” adds Rhoads of Nintendo, which sponsors its own league play around the world. 14 | Foster Business
Level up As the game industry has matured and mainstreamed, developers are increasingly leveraging modern business analytics to create more compelling experiences and better connect with players. “It all starts with great game design and fun game play,” says Chris DeWolfe (BA 1988), the CEO of Los Angeles-based Jam City Games, producer of blockbuster mobile confections like Cookie Jam (on this magazine’s cover) and the immersive Harry Potter: Hogwarts Mystery. “But you’re not going to have hit games unless you have great analytics and great marketing to back up the creative.” That’s true of every company in an increasingly competitive industry. Seattle has been quick to embrace gaming’s modernity, with its marriage of science and art to create something commercially great. Microsoft’s Mehdi speaks not of customers but of fans, who must be earned, engaged and enchanted in this new age of marketing. In response to that growing fan base, local game studios are taking the lead in diversifying characters and tweaking game dynamics and objectives to appeal to many different sensibilities. And they continue to push the boundaries of imagination with technology that continues to advance and astound. For instance, Nintendo recently unveiled the Switch, a hybrid portable/in-home game console with a DIY cardboard accessory called Labo that allows you to construct your own Switch-powered piano, fishing rod or motorcycle for unprecedented play. “There’s real excitement in trying to do something totally new,” says Rhoads, whose Nintendo Technology Development team is charged with imagining his company’s next big thing. “Competing with this huge ecosystem of established players and startups to create something that is competitive and engaging and enjoyable is a huge challenge, but an exciting challenge.” Amazon’s Lau agrees. “Games have become lifestyle,” he says. “If we want to convince players to spend hours—or hundreds of hours—in our games, we have to provide an experience of immersion that is not offered elsewhere.” Future perfect A most vivid example of this directive is a virtual reality game just released by Polyarc, a Seattle micro-studio founded by ex-Bungie developers. Moss, as played on the Sony PlayStation VR, transports you into the lushly rendered world of a fantasy adventure story whose hero is a little mouse named Quill. The sensation is visceral, like stepping into a Pixar movie. You look up and birds soar across the sky. You look down to find your own reflection in a pond. The mouse responds to your words and gestures as you collaborate in a noble quest, forming a bond that’s simply not possible in conventional stories or games. Critics have hailed it the most immersive game yet envisioned. “Just the experience of looking around in this world is incredible,” says Shauna Sperry (BA 2007), who joined her former Bungie colleagues to lead HR—and write for the game—at Polyarc. She notes that Moss is rated “E” for everyone. “And it truly is for everyone,” she adds. “This feels like the game you show a friend who hasn’t played in 20 years, or never at all.” It evokes the response so craved by every game company in Seattle’s industry hotbed: beyond the business metrics and marketing analytics, love at first sight. n
Game to Lead Gaming technologies and mechanics are changing the face of many industries, including retail, healthcare, insurance and, especially, education. Foster’s Center for Leadership and Strategic Thinking (CLST), for instance, is harnessing the power of gaming to accelerate leadership development. An in-depth case study of Alaska Airlines spawned what center director Bruce Avolio terms a “gamulation”— game + simulation—developed with the Bellevue studio Recurrence. Liberty Air is a digital role-playing game that immerses teams into the lives of senior managers tasked with running a large and complex airline, addressing a litany of strategic challenges. Avolio says this dynamic and engaging application of the case method is being used at the UW and 60 other universities. In 2016, the CLST acquired Zealyst, a developer of games that help identify affinity groups within large organizations. Now, the center is adapting the platform to help student bodies form interest groups and corporations identify candidates for advanced leadership development. Most recently the CLST secured a $200,000 seed grant from the National Science Foundation to develop a gamulation, with real and real-time data, for accelerating the development of entrepreneurial leaders in high-tech enterprises. And T-Mobile has contracted the center to develop a gamulation to train its managers in retail and care centers. At the end of the day, it’s all about transforming people with modern sensibilities into strategic leaders, whatever their title. “We’re trying to show that leadership is more a way of thinking and a role versus a title. You don’t have to be a president or CEO. People can lead in many ways,” says Avolio, the Mark Pigott Chair in Business Strategic Leadership at Foster. “Through games and gamulations, we can expose students to a range of experiences that help them understand this.”
Minecraft big fish Casino
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KinG of the
mountains There are volumes to learn from the explorations and adventures of Fred Beckey, the most accomplished alpinist of all time By Ed Kromer
Fred Beckey (BA 1949) was just 16, a wiry kid fresh out of the Boy Scouts, when he joined REI founder Lloyd Anderson in the first successful climb of Mount Despair, a 7,300-foot pyramid of rock and ice in the Picket Range of the North Cascades that the estimable Mountaineers Club had deemed “unclimbable.” It was an assessment that Beckey would disprove again and again and again in his long and remarkable life. Over the next eight decades, his relentless exploration of wild and uncharted places produced more first ascents and virgin routes—across the great mountain ranges of North America and around the globe—than any climber who has ever lived. His exquisitely rendered guidebooks became sacred texts for alpinists of every ability, his meticulous detail and elegant prose inviting them into his vertical world. And, perhaps above all of these achievements, Beckey became an enduring symbol of life, liberty and the uncompromising pursuit of passion—for the footloose and deskbound alike. “Anywhere there are mountains,” says Doug Leen, a frequent climbing partner in the 1960s and 70s, “Fred became legend.” But just who was the man behind this legend? Restless prodigy Wolfgang Gottfried Beckey was born in 1923 near Dusseldorf, Germany, and immigrated with his family to the United States in 1925. From an early age, it was clear that Fred was not like other kids. He led his younger brother, Helmy, on innumerable adventures in the forests, hills and waterways of and around their adopted home of Seattle. “I became fascinated by landscapes,” Beckey later wrote of his childhood, “and also learned to finesse the conflicting demands of wild nature for a certain freedom from convention.” This freedom was fully endorsed by his father, a physician, and mother, an opera singer. “Fred’s parents were a little bit different, too,” says Megan Bond, Beckey’s confidant and biographer. “They encouraged their boys to be independent, to be free thinkers. And they certainly never held them back.” Their eldest grew especially strong and self-reliant, bold and confident. He found purpose in the Boy Scouts, who valued his skills and leadership qualities and looked past the eccentricities that left him a target of bullies at school. The Scouts were also his initial ticket to the mountains that had always captivated him. Of one of his earliest climbs, in the Olympic Range, he recalled “surveying the surroundings with a sense of awe,” and feeling a “kinship with the noble, almost unbelievable peaks and tumbling glaciers.” Soon Beckey was teaching mountaineering and climbing every peak and crag he could get his hands on, including Despair that summer day in 1939, the first of many firsts. Fred and Helmy climbed incessantly in those days, pioneering routes up the remote peaks of the Pacific Northwest.
So it’s a small irony that a second ascent is what really ignited the Beckey legend. In 1942, the Beckey boys spent much of the summer slogging toward the top of Mount Waddington, a 13,000-foot rampart crowned by a fang of rock and defended by hanging glaciers and wicked weather. This menacing mountain, once described as “a nightmare in its grim inaccessibility” had been summited only once before, by North America’s premier alpinist. But at dusk on the 5th of August, 19-year-old Fred and 17-year-old Helmy, wearing hobnail boots on ice and felt-covered tennis shoes on rock, pulled themselves over the top. After this remarkable show of endurance and audacity, the climbing world would forever know the name Beckey. School days During the Second World War, Fred served in the 10th Mountain Division, training soldiers for alpine combat. When the war was over, he enrolled at the University of Washington on the GI Bill. “Education was important to his family,” Bond says. “He began college with the intention that he would graduate and settle into a career like everyone else.” But a less conventional path beckoned. In the margins between his serious business studies, Beckey squeezed in 70 climbing expeditions during his college years—not counting some reported late-night ascents of the gothic buildings on the Liberal Arts Quad. In 1949, the year of his graduation, Beckey published the first edition of his “Climber’s Guide to the Cascades and Olympic Mountains,” which would expand, over time, into the essential three-volume tome known as the “Beckey Bible.” By now, he was fully in thrall of the mountains. He considered going into finance or law, but neither suited his personality nor his outdoor ambitions. Only work as a traveling salesman afforded him the treasure he truly sought: autonomy. On the road Beckey hit his stride in the 1950s and 60s, zig-zagging the continent in his iconic pink Ford Thunderbird, a Kerouac hero bounding right off the page. With his brother pursuing an opera career in Europe, Beckey collaborated with some of the greatest mountaineers of the era in striking new routes and conquering old ones across the continent, from the Rockies to the Gunks, the Sierra Nevada to the Brooks Range, the Bitterroots to the Bugaboos. In the summer of 1954, Beckey posted first ascents of two signature Alaskan peaks—Hunter and Debora—and a new route up Denali. In 1963, having been controversially left out of the first successful American ascent of Mount Everest, the greatest climber of his generation blitzed scores of other great peaks across multiple countries. Eventually, Beckey’s range-roving extended to Europe, Asia, South America, Africa and Australia. He logged thousands of lifetime climbs, according to a compendium being painstakingly compiled by Bond. summer 2018 | 17
Beckey’s record might suggest a wild man climbing with feverish abandon. In reality, he was ambitious but never reckless, which explains his longevity. Reason and caution were his guides. And he approached each new endeavor in the mountains with considered strategy, and equal parts explorer, entrepreneur and engineer. The explorer craved discovery of the inaccessible and untouched, no different from Lewis and Clark, Shackleton, Cousteau or Armstrong. The entrepreneur assembled the best talent for the task, motivated transcendent performance and sweated every detail. And the engineer found ways up a mountain that nobody else could see.
Beckey was also a dynamo. “Indefatigable” is how Leen puts it. “We’d go out for a week into the backcountry with him working on a new route. When we ran out of food, my friends and I would go home exhausted. But Fred would immediately recruit some new partners and head straight back in. And he was twice our age! He was amazing.”
Sam Gardner photo
Fred Liska photo
Bob & Ira Spring photo
Engineer of alpinism “The brilliance of Fred was his ability to identify these incredible routes that no one else in the world would have or could have figured out,” says Leen, a retired Seattle dentist. “And then he would somehow get the people together, the logistics right and the weather to cooperate so he could pull these things off in incredible style. He was an absolute engineer of alpinism.” As Beckey grew older, he recruited “strong young bucks” for his adventures, says Leen, who was studying geology at the UW in 1966 when he and some friends were first conscripted by Beckey at a coffee house on the Ave. Not that they needed convincing. “We were absolutely in awe,” he recalls. “We had carried the Beckey Bible around with us in the North Cascades as Boy Scouts. He was a legend, even then.”
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Curriculum vitae Just as amazing was his literary output. Since he was a boy, Beckey had always documented his observations about the world around him in exquisite detail. Eventually, his writing became the career that enabled his climbing pursuits—and vice-versa. His legendary drive “fermented into a sort of sublime seeking,” wrote Michael Brick in a 2008 profile in the New York Times. “It appeared most vividly in his guidebook prose, a stirring amalgam of technical analysis, historical insight, geographical research and a sense of wonderment.” Across his dozen books and hundreds of articles—“more scholarly works than most college professors,” notes Bond—Beckey revolutionized guidebook writing. He wove together evocative phrasing, crystalline description of routes and techniques, and exhaustive discourse on the history, ecology and geology of every mountain. “He could so eloquently craft a sentence, almost like poetry,” Bond says. “Other times he wrote almost brutally.” Beckey described Gibraltar Rock as “a frowning embattlement” and Kangaroo Ridge as “a bizarre museum of breathtaking rock
Dave O'Leske photo
sculpture.” He painted Silver Star Mountain’s “gables of rock” that “strike and dip in seemingly planned directions.” Bond, who has studied Beckey from cradle to grave for her forthcoming biography, stands in awe of his literary contributions: “He did everything he could to bring the mountains to the people.” The great unknown It remains a point of fascination that this articulate man of letters was so famously enigmatic in person—even to the generations of climbing partners who shared countless hours together in a tent and on a rope. “He was a hard guy to get to know,” says Ambrose Bittner (MBA 2007), who began climbing with Beckey in the 1980s. “If you asked Fred about his life, he’d change the subject. We’d talk strictly about the climb and the route and the weather and maybe college football. Very few people really knew Fred.” Bond was one of those few. While living and traveling with Beckey during his last decade, she discovered, beneath his notoriously hard shell, an infinitely curious mind, a student of geology, politics, philosophy and history who was fascinated by the motivations of innovators and explorers. “I don’t know if the word ageless is right, but he certainly seemed timeless,” Bond says. “His intellectual energy never waned.” As for Beckey’s own motivations for a life of unceasing exploration, she believes that he climbed because climbing made him happiest. “It’s that simple,” she says. “There was a competitive factor in his heyday, of course. But it was deeper than that. Climbing made him tick.” A legacy in stone The mountaineering world had begun to memorialize Beckey even before he died last October, at age 94. His unconventional life and extraordinary achievements were honored by the Mountaineers, American Alpine Club, Outdoor Industry Association, Climbing magazine, even Adidas. He was dubbed the “dean of North American mountaineering” and the “godfather of the road-trip.”
“Who’s going to be the next Fred Beckey?” asks Leen. “There won’t be another. Fred was one of a kind.” That singular figure is also the subject of a new documentary: “Dirtbag: the Legend of Fred Beckey.” Bond believes the young filmmakers may have been over-enthusiastic in portraying Beckey as outlier and outlaw. She says he disliked this “dirtbag” persona—a term of endearment among vagabond climbers—though he also sometimes participated in this mythmaking by “giving people a good Fred Beckey story to take home.” But at the intersection of man and myth, there is a true and powerful legacy in his unwavering pursuit of passion, writ largest. “It’s that ‘freedom of the hills’ thing,” says Bittner, the founder and managing director of Red Lantern Journeys. “Part of why climbers go into the mountains is to feel free. But for most of us, climbing is only a small part of our lives. Fred made a life out there.” Bond says that Beckey didn’t consider himself a teacher. And he probably would have laughed at the notion that he should be anyone’s role model. But there is a valuable lesson in his example, the very way he existed. “It was life,” Bond says. “How to do life right. Fred always felt a sense of urgency and squeezed as much out of every moment as he could.” Climb on That meant to the very end. Despite a litany of pain and weakening sinew—the effects of lifelong discomfort and deprivation—Beckey continued to explore the world and even to climb, with diminishing success, well into his 90s. His pursuits became more about people than places. “He was always planning another outing with friends,” Bond says. “As he got older, the prize changed for him. To summit would be nice, icing on the cake. But he really liked the cake.” In Beckey’s final years, time finally caught up to a body that had, for so long, defied it. But his spirit never wavered. And he never stopped looking skyward. Just a couple of months before he passed away, Bond and Bittner and a few other friends took Beckey to a climbing area called Smoke Bluffs, in Squamish, BC. They helped him into his harness and climbing shoes and steadied him as he shuffled from his wheelchair to the base of the cliff. With help on the rope from Bittner, this 94-year-old marvel, stooped and frail, straightened a bit and began to inch up the rock face on gnarled, arthritic fingers. He climbed a few vertical feet before his strength gave out and Bittner lowered him softly to the ground. Spent, Beckey returned to his chair to watch the younger crowd take turns spidering up the crag as he once did so purposefully, so elegantly. He seemed content. Then, after a spell of rest, his gravelly voice rose once more from his time-battered frame: “I want to give it one more try.” n
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MasterS of finance
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Foster’s Department of Finance and Business Economics has quietly become a global powerhouse in research and teaching The UW Foster School of Business is a long way from Wall Street. An entire continent separates Seattle, the globally renowned catalyst of innovation, and New York, the globally recognized capital of finance. And to those who care about financial pedigree, that’s a division as metaphoric as it is geographic. Just don’t try to tell Lauren Krainski (MBA 2018) that Foster is not a finance school. The second-year MBA student lit up her investment banking internship at Deutsche Bank last summer, earning lead roles on live M&A deals and fielding the questions of her fellow interns, most of whom hailed from the traditional finance powers and came with some serious advantages—finance backgrounds, deep dives into investment banking practicums, vast industry alumni networks. Pedigree. What they didn’t have? Thomas Gilbert and Sarah McVay and Stephan Siegel and Lance Young in their heads. Krainski credited her personal A-team of Foster professors with instilling in her the critical concepts of financial modeling, M&A negotiations and financial statement analysis so deeply and indelibly that her scale-up to Wall Street’s unrelenting pace became, comparatively, a piece of cake. And for any question that arose over the summer, they were only an email or phone call away. “I almost could not believe how well I was prepared—and prepared versus everyone else who had so many more advantages and opportunities than I had,” says Krainski. “Foster is an amazing place for finance.” Performance over pedigree This assertion is more than one woman’s opinion. The Department of Finance and Business Economics is ranked #8 in the world in research productivity in the discipline’s top four journals over the year 2017—and #4 when you scale each school’s productivity by its number of research faculty. Foster faculty members serve on the editorial review boards of every major finance journal, including the top-four Journal of Finance and Quantitative Analysis, which has been published by the school since 1966. Finance has also produced many of the UW's most effective educators, including 10 of the first 20 recipients of the PACCAR Award for Excellence in Teaching, the Foster School's highest honor. So what’s the secret sauce? How did Foster become worldclass in finance so quietly—so remotely (to those who subscribe to an East Coast bias)?
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Finance faculty members Stephan Siegel, Lance Young, Thomas Gilbert and Jennifer Koski have made a huge impact on Lauren Krainski's (second from right) career.
A golden age Department chair Jarrad Harford, the Paul Pigott-PACCAR Professor in Business Administration, says that Foster’s golden age of finance is all about the current lineup of exceptional scholars and educators. He credits a vital infusion of private support as essential to attract—and retain—some of the foremost minds in the ultra-competitive field of finance. This includes some of the discipline’s most eminent modern scholars (Harford, Philip Bond, Ran Duchin, Jon Karpoff), inquisitive innovators (Kathy Dewenter, Chris Hrdlicka, Andy Siegel, Stephan Siegel), academic leaders (Bill Bradford, Avi Kamara, Paul Malatesta), and transformational educators (Thomas Gilbert, Jennifer Koski, Lance Young—“who could teach self-impalement and people would still line up for their course,” Harford jokes). They choose to stay, he believes, because of the many assets of Seattle, the Foster School's world-class campus and, perhaps most of all, a department with a culture of genuine collegiality, an environment scarcely found in the sharp-edge world of finance. “Success breeds success,” adds Harford. “It’s a global market for academic talent, and everyone knows where everyone is. Here, we’ve got a productive place with people you want to be working with and talking to every day.” The wide world of finance Research productivity may be the most objective measure of a finance faculty’s quality. But teaching is the most meaningful for students. Today, 20 percent of Foster MBAs and 25 percent of Foster BAs graduate into finance positions. Count Alina Moraru (MBA 2013) a satisfied customer. “The finance education I received at Foster not only prepared me well for a career in corporate finance, but also gave me the breadth and knowledge needed to understand the ‘why’ behind my work and the broader implications of my decisions,” says Moraru, a senior finance manager at Amazon. “The knowledge gained at Foster enables me to see the bigger financial picture of my company, which becomes increasingly important as I grow my career.” Luis Silva-Behrens (BA 2006), an executive director at JPMorgan Chase, describes his finance training at Foster as “complete and well-rounded,” and his overall experience as “dynamic. I didn’t necessarily know it then, but a dynamic
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undergraduate experience is a valuable asset for starting in today’s business world. A rigorous academic curriculum, a vibrant and diverse student body, numerous opportunities to enhance my experience with deeply rooted student organizations and other extracurricular offerings… all of these experiences helped prepare me to work in an industry that is challenging, fast-paced and always changing.” As for Lauren Krainski, despite having written her ticket to a lucrative career in investment banking, she decided that her passion lies outside of Wall Street. Seattle, it turns out, is full of finance opportunities she finds infinitely more fascinating. While finishing her degree, Krainski has become associate director of the new startup incubator at the Allen Institute for Artificial Intelligence. “Being able to make high-level finance decisions on emerging AI companies while also applying my skills in diligence and research is a pretty thrilling proposition,” she says. Applying finance to innovation… what could be more Foster than that? n
On the shoulders of giants
Finance Department chair Jarrad Harford believes that current successes have built upon a solid foundation. The early Foster School was led by a string of visionary economists, including Stephen Miller, Austin Grimshaw and Howard Preston. Dean Kermit Hanson recruited Stephen Archer, who chaired the department through the 1960s, leading the field’s transformation from descriptive to prescriptive research using advanced statistical analyses. Archer worked alongside William Sharpe, who conducted most of his Nobel-Prize winning work developing the Capital Asset Pricing Model (CAPM) while on faculty in the 1960s. And Sharpe’s student and research collaborator Nancy Jacob became the first woman to lead the Foster School—or any major American b-school—as dean in the 1980s. The most important bridges to the present include emeritus professors Larry Schall, who chaired the department for much of the past three decades, Alan Hess, who brought a deep knowledge of financial institutions and monetary policy that earned him a UW Distinguished Teaching Award, and Rocky Higgins, a PACCAR and UW Distinguished Teaching Award winner and faculty director of the Pacific Coast Banking School. And generations of Foster grads will fondly remember PACCAR Award winners Ali Tarhouni, who departed to lead reform in his native Libya during the Arab Spring, and Karma Hadjimichalakis, who made such an impression with her level-headed macroeconomic lessons that she was honored by the U.S. House of Representatives upon her untimely death in 2010.
Who’s Who in Foster Finance Philip Bond (the Edward E. Carlson Distinguished Professor in Business Administration) – a leading theorist with enormous stature in the academic community from his studies on a wide range of finance topics. He’s also co-editor of the preeminent Journal of Finance and past president of the Financial Theory Group. Bill Bradford (the Business and Economic Development Endowed Professor) – a former dean of the Foster School and long-time faculty director of the Consulting and Business Development Center whose research delves into under-examined areas of minority enterprise, wealth creation and discriminatory financing. Kathy Dewenter (Joshua Green Family Endowed Professor) – a former faculty director of the Global Business Center and researcher of complex topics in global banking, Dewenter became renowned for her ability to balance rigorous expectations with genuine care in the classroom, earning her the 2016 PACCAR Award for Excellence in Teaching. She passed away in February. Ran Duchin (the William A. Fowler Endowed Professor) – the associate editor of two of the discipline’s most influential journals is a world-renowned empiricist with a broad portfolio of research interests that include behavioral finance and banking. Thomas Gilbert (Associate Professor) – one of Foster’s finest educators who has won two PACCAR Awards, seven MBA Core Professor of the Year nods and a spot in Poets & Quants’ “40 Under 40” for his ability to demystify the most complex concepts in finance. His research investigates asset pricing, endowment investment and economics.
Debra Glassman (Senior Lecturer) – the longtime faculty director of the Global Business Center whose ability to teach macroeconomics with deep expertise and currency puts her in high demand in and out of the classroom. Jarrad Harford (Paul PigottPACCAR Professor in Business Administration) – one of the world’s leading scholars on mergers, cash holdings, CEO and director incentives and institutional share ownership, Harford also finds the time to chair the department, serve on the editorial board of three top journals, share his expertise on a global stage and still teach undergrads at Foster. Chris Hrdlicka (Assistant Professor) – a scholar’s scholar with incisive research on big-picture questions about asset pricing, risk and optimal portfolio policy and controversial topics such as the management of university endowments. Avi Kamara (William W. Alberts Endowed Professor) – an essential part of the Foster fabric for more than three decades, Kamara is the former department chair (2002-2006), associate editor of the JFQA (1996-2005) and an asset-pricing specialist with a knack for making highly technical topics, such as derivatives, intelligible. Jonathan Karpoff (Washington Mutual Endowed Chair in Innovation) – an associate editor at every major finance journal and a prolific researcher in corporate finance best known, perhaps, for his revelations on the consequences of fraud. Among numerous career honors, Karpoff was recently named a fellow of the Financial Management Association, joining an elite group of Nobel laureates and the biggest names in financial economics.
Jennifer Koski (Kirby L. Cramer Endowed Chair) – an elemental force in the classroom who has earned three PACCAR Awards— and virtually every other teaching award—for her legendary ability to demystify the most complicated of concepts, while also making important contributions to the study of financial markets. Paul Malatesta (Norman J. Metcalfe Professor) – one of the department’s longtime stalwarts and managing editor, for more than 30 years, of the Journal of Finance and Quantitative Analysis, one of the top four journals in finance, due in no small part to his presence. Ed Rice (Associate Professor) – a major figure in Foster’s doctoral program and a shrewd thinker in any seminar, Rice is also the school’s resident microeconomist who shares this expertise each spring in the MBA State of the Economy Forum. Florian Schulz (Assistant Professor) – a promising newcomer with some interesting insights on political economies. Tracy Seslen (Senior Lecturer) – the resident expert in real estate who developed a real estate finance course and an annual conference for industry professionals. Andy Siegel (Grant I. Butterbaugh Professor) – the man who, literally, wrote the book on Practical Business Statistics (and teaches sublimely to everyone from undergrads to execs) has also created fundamental financial models and brought his statistical insights to further fields ranging from investing to design automation to election prediction to systems biology.
Stephan Siegel (Michael G. Foster Endowed Professor) – an expert in international asset pricing who took a huge risk to delve into the genetic origins of financial behaviors, yielding seminal papers in a fascinating emerging discipline. Léa Stern (Assistant Professor) – a newcomer whose promising research ranges from corporate governance to the applications of artificial intelligence and machine learning in finance. Mark Westerfield (Associate Professor and Michael G. Foster Endowed Fellow) – a towering young theorist with a knack for overturning firmly held beliefs in asset pricing, behavioral finance and corporate finance—then making his correction seem intuitive. Lance Young (Principal Lecturer) – another of Foster’s finest educators with a PACCAR Award and professor-of-the-year honors across undergraduate and MBA programs, Young’s Socratic style has made casebased courses in entrepreneurial finance and M&A essential experiences. Yao Zeng (Assistant Professor) – fresh out of Harvard’s doctoral program with a dissertation on entrepreneurial finance adorned with awards, Zeng is now delving into the mysteries of FinTech.
Joining this summer: Yang Song (Assistant Professor) – a productive young scholar from Stanford who studies asset pricing and financial intermediation. Chris Parsons (Michael G. Foster Endowed Professor) – a research powerhouse from USC who is as renowned for his creative approaches to big-picture questions in finance as he is for dynamism in the classroom. summer 2018 | 23
faculty Research briefs
The Binds of Bundling
The Nuance of Narcissism
Telecom package deals keep customers from switching providers
Feelings of unfair treatment trigger the worst in self-centered leaders
For earnings announcements, the message should fit the medium
Telecommunications companies commonly bundle services at a discount to entice consumers. But if bundling attracts new customers, it serves an even greater purpose of retaining them, according to research by Stephanie Lee, an assistant professor of information systems at Foster. Lee examined the behaviors of 1,000 people served by several competing Korean telecommunications providers. She found that bundling two or more services—high-speed Internet, wireless phone, landline phone, voice-over-IP, cable television, satellite television and others— at a discounted price makes customers more than 17 percent less likely to switch their Internet service provider. And that’s controlling for demographic characteristics, company preferences, past service providers and status changes. Lee explains that while bundling certainly saves money on services, it also effectively makes it more inconvenient to switch providers. In the long run, this inconvenience can outweigh the costsaving benefit of buying into a package of services at “one low price.” “Consumers should carefully weigh what they gain from the discounts of bundling against the increased costs of switching,” says Lee. n
Narcissistic leaders are particularly prone to act in their own self-interest when they feel that they are being treated unfairly. And the repercussions of this enhanced egoism are damaging to employees and organizations. This according to a new study by Ryan Fehr, an associate professor of management at Foster. But while the most destructive of self-serving behaviors are triggered by perceived indignities, Fehr also finds that narcissistic leaders who feel respected, valued and fairly treated can actually display more altruistic behavior than their less-narcissistic peers. “Narcissism magnifies the way an individual acts, in either direction,” Fehr says. “When narcissistic leaders perceive that they are treated unfairly, they tend to lash out in a manner consistent with the notion of threatened egoism. On the other hand, when leaders feel that they are treated fairly, they appear to act in a less self-interested manner and, as a result, are more likely to get their followers to collaborate and constructively voice their opinions.” To get the best out of narcissistic leaders, Fehr advises organizations to create a culture of fairness and transparency—and to explicitly demonstrate this fairness when necessary. n
When announcing corporate earnings, it matters that the message fit the medium. New research by Foster’s Frank Hodge, Stephanie Grant and Roshan Sinha demonstrates that investors react differently to positive earnings news when the same message is delivered via different media. Specifically, investors respond positively when a CEO brags about a firm’s financial performance in the traditional medium of a conference call. But those same boasts backfire when delivered via online social media. “Our study informs managers that the most effective communication style for conference calls is not necessarily the most effective communication style on Twitter,” says Hodge, the Michael G. Foster Endowed Professor of Accounting. Grant, an assistant professor of accounting, explains that CEO braggadocio is seen as an appropriate style of communication on a conference call. But social media evokes a different expectation: conversation rather than declaration. So a bragging tweet from a CEO rings discordant and erodes credibility with investors. Investors respond most negatively of all, Grant adds, when a CEO “humblebrags,” regardless of the medium or how good the news. n
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Interested in reading more about Foster research? Visit foster.uw.edu/research-briefs
To deal with an abusive supervisor, change the power dynamic
Cloud computing innovation is changing the game for online startups
CEO political ideology influences resource allocation to business units
An abusive boss can make you feel helpless and hopeless. But new research by Elijah Wee offers a way out of the persistent cycle of abuse. Flipping the power dynamic, even a bit, can bring an end to supervisory bullying— and even lead to reconciliation. “At the heart of the problem is power imbalance,” says Wee, an assistant professor of management at Foster. “If you are more dependent on your leader than your leader is on you, then there’s a greater likelihood of abuse.” His study of workers in two Chinese companies identifies several effective strategies that allow abused followers to find relief:
Entrepreneurs share a tense tangle of guesswork when it comes to the variables they weigh before entering a market. In the age of screen consumerism, one crucial variable affecting online businesses is computational capacity—how many computer servers might it take if transactions spike? Enter autoscaling, the recent computational innovation that lets “the cloud” broaden or narrow computational resources to exactly meet demand. Research by Foster marketing professors Amin Sayedi and Jeff Shulman and doctoral student Amir Fazli predicts the effects of autoscaling on profits, pricing strategies, market entry decisions—and ultimately, customer welfare. The verdict is a mixed bag for new ventures. Sayedi, an assistant professor of marketing, says the model indicates that autoscaling could lead to a decrease in the number of Internet entrepreneurs entering a market. But this doesn’t necessarily guarantee greater profits. Autoscaling also could bring fierce price competition. All of this—the promise of greater speed and lower prices afforded by autoscaling— is good news for consumers. n
Why do some multi-business corporations distribute resources evenly across units while others award resources variably? According to research by Abhinav Gupta, it may have to do with the CEO’s political ideology. His analysis of political contributions and resource allocations reveals a clear relationship between CEOs’ political values and their tendency to distribute resources evenly or variably (presumably based on differences in perceived “merits" of business units). “CEOs in multi-business companies act as internal investors for business units,” says Gupta, an assistant professor of strategic management at Foster. “And they appear to approach resource allocation in one of two very different ways.” Liberal-leaning CEOs, seeking collaboration among units, are more likely to favor the even-handed approach when allocating resources. Conservative-leaning CEOs, seeking to spur competition, tend to favor merit-based allocations that may create large disparities between business units. Gupta adds that both approaches to resource allocation are amplified when employees and CEO share political ideology. And this affects firm performance. Equal allocation creates greater value for companies that lean liberal across the board; variable allocation produces superior returns for conservative firms. n
©istock.com/Lesia_G, id-work, alashi. erhul1979
• Develop or improve skills that the supervisor regards as essential. • Enhance performance to achieve goals that the supervisor values. • Form coalitions among co-workers. When subordinates position themselves as instrumental to a pernicious supervisor, Wee finds that the abuse dissipates over time. And when an abusive manager recognizes his reliance on a subordinate, he is more likely to repair the damaged relationship. Wee stresses, however, that this employee-level strategy in no way absolves organizations of their responsibility to manage abusive supervision. n
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How to Keep Good People Turnover expert Tom Lee distills the wisdom from 100 years of inquiry Should I stay or should I go? Management researchers have been studying this fundamental question, in the context of work, for over a century, producing more than 2,000 papers on voluntary turnover. One of the field’s foremost experts is Tom Lee, the Hughes M. Blake Endowed Professor of Management at Foster. Foster Business asked him to discuss his recent paper distilling 100 years of evidence into a modern set of best practices for managing employee retention and turnover.
What are your major contributions to the study of retention and turnover? Tom Lee: I came into the field in the early 1980s, just after landmark studies had first articulated the steps to quitting and the major predictors of turnover. After some years testing these theories like everyone else in the field, I decided it was time to take some risks. In the mid-1990s, Terry Mitchell (professor emeritus of management) and I introduced the “unfolding model.” In additional to the personality and attitudinal factors that had been studied at length, we found that, in many cases, it took an external event or shock to prompt quitting. In the 2000s, we began looking at the other side of the turnover equation: why people stay. Most people thought that satisfaction was the most important factor. But we identified several other factors—links, fit and sacrifice—that made leaving just a little bit harder. This became the “job embeddedness” model. Now we’re working on a new model of “psychological withdrawal states,” which improves the prediction of turnover substantially by considering reluctant leavers and stayers differently from the enthusiastic leavers and stayers that we had traditionally studied. And really recently, we’ve begun studying turnover indicators over time. By looking at the trajectories of job satisfaction, engagement, and embeddedness over time rather than in a single moment, we find that the predictive quality of surveys skyrockets. Has the study and prediction of turnover become more important? There has always been a significant cost to losing employees and having to replace them. That cost has risen in the Information Age, when companies make their money on knowledge and innovation. Today, companies care about retention and turnover not only during economic booms (as was the case when I joined the field), but also during recessions—when they can ill afford to lose their intellectual capital. Are Millennials a special case when it comes to retention and turnover? Yes and no. The stereotype of today’s young adults is that they don’t just want a job, they want purpose, fulfillment. They are idealistic. This sounds, to me, a little like the Baby Boomers in their youth. Whether or not this generation is different, we do know that the relationship between employees and employers has changed. Through the 1970s, there was a strong social norm to stay with a company for an entire career. Today, there is no stigma to changing jobs and employers frequently. In fact, in many industries, there is a stigma to staying put too long. So, is retention and turnover still worth our attention? Absolutely. It’s likely that people are going to leave eventually. But if you can keep them on the job for a little longer, motivate them to give a little more, there is real value in that. n
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Tom’s Tips… To predict voluntary turnover • Measure comprehensively – design surveys that capture job satisfaction (or organizational commitment), job alternatives, active job search, avoidance behaviors (like absences or lateness) and job embeddedness. • Track change over time – survey employees more frequently (at least three times a year); look for trends, which can be far more telling than single moments in time. • Analyze deeply – let the data drive decisions and policies (though always temper with your best managerial judgment). To prevent voluntary turnover • Foster job embeddedness – build a culture conducive to healthy employee fit, connections and commitment to the organization and community. • Know your people – identify enthusiastic leavers and stayers and reluctant leavers and stayers—and manage appropriately. • Prepare for shocks — prevent or address events that push an employee to quit, such as supervisory abuse, a competing job offer or spousal relocation. • Understand Millennials – the new generation in the workplace may have a heightened desire to find purpose and personal development.
women UP Women Board Directors Development Program is populating the pipeline In the years since graduating from the Foster School’s Technology Management MBA Program, Milkana Brace (MBA 2008) had built an impressive resume. Senior director at Expedia and Groupon. Consultant at American Express. Founder and CEO of two technology startups. Advisor to two others. She felt ready to take on even bigger strategic challenges. She wanted to serve on a corporate board of directors. But how? “I knew I had professional expertise and experience that were relevant,” Brace says. “But I didn’t have a clear understanding of what path to take in order to get on a board, or how I’d need to prepare. I didn’t know if I was building the right experiences, presenting the right profile or building the right networks to make me a strong board candidate.” So, in 2015, she enrolled in the first cohort of Foster’s Women Board Directors Development Program. Building the pipeline This intensive seminar in the school’s Executive Education portfolio was created to address the scarcity of women serving on corporate boards—just 20 percent of Fortune 1000 board seats are held by women, according to the 2020 Gender Diversity Index. But times are changing, says founding director Cate Goethals. Rigorous studies by Credit Suisse and McKinsey have confirmed that companies with a critical mass of women directors perform better along a number of business measures, including productivity and profitability. Institutional investors have noticed, Goethals says, and are pushing for greater gender diversity at the board level. So she designed the interactive two-day seminar to help qualified, motivated women prepare to seize this opportunity. “We’re firing up a bunch of really cool, capable women,” says Goethals. “We demystify what being a board director is all about, make them realize that they could serve on boards—and show them how to do it.” Sessions on the roles and responsibilities of boards, the pathways to board appointments and personal action plans for each participant are delivered by a powerful team of corporate directors and mentors who add their own personal stories for a dose of reality and inspiration. Reality and inspiration The trailblazing faculty includes women with considerable board experience, including Dawn Lepore (AOL, eBay, New York Times, Drugstore.com, Wal-Mart, Charles Schwab, RealNetworks), Colleen Brown (American Apparel, True Blue), Susan Preston (Angel Resource Institute, National Science Foundation), Adriane Brown (eBay, Raytheon), Charlotte Guyman (Berkshire Hathaway, Brooks Running), and Connie Collingsworth (Premera, Banner Corporation). Collingsworth, the chief business operations officer at the Bill & Melinda Gates Foundation, is thrilled to retrace, for students,
each intentional step in her decade-long journey from a law career to her first corporate board seat. “I speak because I have a passion,” she says. “I believe that getting more women on corporate boards will bring profound change not only to individual firms, but to society overall. As I tell my daughters, this is my march.” “We light a fire under these women so they understand it’s up to them,” says Betsy Berkhemer-Credaire, the CEO of 2020 Women on Boards and author of The Board Game. “Nobody’s going to get a call out of the blue to serve on a corporate board.” She advises program participants to develop strategic relationships with board members, enhance their industry visibility to establish expertise and, for starters, get themselves on a non-profit board.
Betsy Berkhemer-Credaire at the Women Board Directors Program.
The network expands Brace has taken this advice to heart. Though she is focused on getting her new venture, Jargon, off the ground, she has begun laying the foundation. She is refocusing her experiences and resume toward the requirements of board service. She has expanded her network. And she has joined the board of the Seattle Opera, logging relevant experience and networking with seasoned board members who also serve on corporate boards. She’s also cultivating the new network of program alumnae— already 180 strong, and growing. “I’ve referred several women who have really enjoyed the program,” Brace says. “Serving on boards requires patience and a big investment up front. But I hope that over the course of several years, we’ll see more and more graduates find their way onto boards. And, of course, now that we’re all part of the same network, they can pull along the rest of us.” The next Women Board Directors Development Program sessions convene June 21 and November 6. Visit foster.uw.edu/ executive-edu/ for more information. n summer 2018 | 27
A New Balance Gretchen Claflin is the first woman to lead the nation’s premier banking school
Since its founding in 1938, the Pacific Coast Banking School (PCBS) has been inextricably linked to the UW Foster School of Business. Many Foster deans and prominent profs have served as education directors and faculty of PCBS. A banking simulation developed by Foster’s George Prater is still used as the program’s capstone. And PCBS has invested heavily in the construction of Foster’s world-class facilities, which continue to host its residential session each summer. So it’s no surprise that a Foster grad now leads the nation’s premier banking school. After serving as chief operating officer since 2013 and president since 2016, Gretchen Claflin (BA 1977) became the first woman CEO of PCBS—or any American banking school—this past spring. “Gretchen’s familiarity with the operations of the school, her demonstrated leadership capabilities, her grasp of current technologies, and her financial background made her the perfect choice,” said PCBS chairman David Bobbitt. Her story Claflin began studying accounting at Duke before transferring to the UW when her husband accepted an offer from a Seattle 28 | Foster Business
law firm. After graduating Phi Beta Kappa from Foster, she began working as a CPA for Ernst & Young, where she was first introduced to the banking industry as an auditor. In the mid-1980s, she handled accounting for a prominent developer of commercial real estate. Later, Claflin continued providing accounting and advisory services, specializing in small business financial management and financial transitions for privately held companies. She built an impressive track record of streamlining management systems and business practices for client companies before being recruited to PCBS by longtime CEO Dave Enger. She was attracted to the banking school by the same quality that has attracted its 11,000-plus graduates. “There is something about PCBS that appeals to people’s heads and hearts,” Claflin says. “I believe we make a big difference in our students’ careers, their understanding of the business of banking, and in the kind of leaders they become.” Mission: critical She says that this enduring mission is just as important today as it was when PCBS was founded to strengthen a system severely tested during the Great Depression. The modern banking industry has grown infinitely more complex. So a big part of Claflin’s commission is ensuring that the school stays ahead of the trends. She’s committed to its evolution, listening carefully to her powerful board of industry CEOs and regulators, and to the very banks that send more than 700 of their most promising leaders each session.
This means thoughtfully addressing emerging issues that are challenging bankers today, including cybersecurity, social media, regulation, innovation, building relationships in an era of automation, competing with FinTech companies, leading with integrity and dealing with change. “One of my key goals is to ensure that our leadership program is preparing bankers to lead in a rapidly changing environment,” she says. “That’s banking today.” Change agent Claflin is ever mindful of her organization’s critical role in shaping the future of bankers, banks and the industry. For individual students, it fills a significant gap in higher education. “You can’t major in banking,” Claflin says. The best of the best get selected for advanced study at PCBS. It’s a great honor to be chosen. The program is a significant investment for both the banker and the bank that sends them as it requires three annual two-week residential sessions and 250+ hours of interstitial work. Claflin feels a personal obligation to ensure that the learning and networking experience is transformative. Proud to be the first woman to achieve her station, she also strongly believes in the power of diversity and applauds efforts made by banks to support and promote those with diverse backgrounds and perspectives. “We appreciate the opportunity to educate future leaders in the banking industry and welcome and encourage all qualified candidates,” Claflin says. “The more inclusive we can be, the more opportunity exists for banks to build a strong, diversified workforce.” Ultimately, a healthy banking industry is the bottom line for PCBS and Claflin. “I firmly believe in our continuing mission,” she says. “A strong banking system is essential to a strong economy, and I’m proud to play a role in educating and training the next generation of financial leaders.” n
– Ed Kromer
Company Man Yusuf Mehdi has made a career of Microsoft’s “amazing playground” of technologies Yusuf Mehdi (MBA 1992) likes to joke that he’s the “Forrest Gump of Microsoft.” But unlike the cinematic everyman who bumbles into monumental events in modern American history, Mehdi, the corporate vice president leading the Windows and Devices Group, has driven many of the great moments in Microsoft. In his 26 years with the Redmondbased tech giant, Mehdi has been central to the development and launch of Internet Explorer, Bing search engine, Microsoft Advertising platform, MSN.com, Windows 10, Xbox One, Surface and HoloLens—a wide swath of the Microsoft portfolio. And his career has spanned three very different CEOs in the innovative Bill Gates, the enterprising Steve Ballmer, and the empathetic Satya Nadella. “Each has run Microsoft in a different way, but I think it was the right way at the time,” he says. “What hasn’t changed is the desire to make a difference, to create technology that has a positive impact on the world.” Into technology That Mehdi went into technology was a bit of a lark. The son of a Mexican mother and Indian father graduated from Princeton with a degree in economics and landed a job at Reuters just as the global information firm was introducing its groundbreaking automated electronic trading system. “You’re from college,” he recalls his new boss saying. “You must know about these things called computers. Why don’t you figure out what they can do?” What they could do, he demonstrated, was make loads of money. Traders bought the revolutionary digital systems like hotcakes. And soon Mehdi was offered a tempting opportunity to run a Reuters business in Argentina. Feeling a bit underprepared, he decided to earn his MBA at Foster first. A fateful internship at Microsoft turned into a job, and that job turned into a career. “I couldn’t imagine being anywhere more
than two or three years, let alone 25,” he says. But he loved the people and the opportunity to play in Microsoft’s “amazing playground” of technology and innovation. Internet dreams Mehdi’s initial job was marketing Windows 3.1. But that was really a jumping off point. “I’ve always been lucky to identify with people at Microsoft who are at the forefront of change,” he says. Those visionaries might say the same thing about Mehdi. An early champion of Microsoft’s move to the Internet earned him key roles in Internet Explorer 1.0 to 5.0 and the commission to explore every commercial possibility of the online world, resulting in Bing, Microsoft Advertising and MSN, which became one of the most popular sites on the World Wide Web. Mehdi went on to lead the rollout of Xbox One, the gaming and 4K entertainment console platform, and oversee development of blockbuster games like Halo and Minecraft. His teams have rejuvenated the Windows operating system, refined the category-creating Surface Pro tablet, created the smart assistant Cortana, and realized the sci-fi promise of mixed reality through HoloLens, the first fully untethered holographic computer that turns the world into a computer screen. Under Mehdi’s leadership, the Windows and Devices Group, the largest reporting segment in Microsoft, generated nearly $40 billion in revenue and $8+ billion in operating profit last year. Finding time Today, a rejuvenated Microsoft offers a broad portfolio of products addressing the range of customer needs at work and in
everyday living. But the demands of a high-tech existence have taken a toll. So Mehdi has been entrusted to lead a new initiative that will summon all of Microsoft’s products and innovations to solve one of the great pandemics of modern life: the lack of time. A true believer in Microsoft’s mission of empowering people and organizations to achieve more, Mehdi is “all in” on discovering the tech-driven solution to lost time. And he admits to wishing he had more of it in front of him. “When I started my career, there were no cell phones, no Internet, no digital music, no social media,” he says. “What will the next 25 years look like? What new technologies will make today’s look quaint by comparison?” Count on Mehdi to stay a while, and have some say in the matter. n – Ed Kromer
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A Pioneering Woman Three daughters memorialize their remarkable mother, Nancy Fulan Wang, with an unexpected gift Linda, Melba and Freda Wang are graduates of Stanford University, the University of Pennsylvania and Columbia University, respectively, and all three have pursued careers on the east coast. They neither went to the University of Washington nor are any of them accountants. Yet last year the three sisters created a $100,000 endowed fund to support graduate accounting students at the UW Foster School of Business. Why? The story behind this unexpected gift begins in China on May 7, 1929, the day that Nancy Fulan (Liu) Wang—their mother— was born, the first child of Fah-Hsuen Liu and Hsing-Sun Chang Liu. Nancy and her three younger sisters and three younger brothers grew up in several provinces. She earned a BA in Business Administration from National Taiwan University (NTU) in 1953, graduating first in her class—one of many firsts that would be ascribed to her. Next firsts While at NTU, Nancy met Wilson Shuehmong Wang and they married in 1956. After eldest daughter Linda was born, Nancy and Wilson decided the best future for their young family was in the United States. Nancy applied to the UW to study master’s-level accounting and departed Taipei, traveling on a merchant ship across the Pacific to begin a new chapter. She was the first of either side of the family to immigrate to the US. Despite navigating an unfamiliar culture and language on her own, Nancy rose to the top of her class and was recruited by Seattle’s Westours prior to graduation. “She is an outstanding individual with excellent mental capabilities and an excellent grasp of the accounting field,” wrote Julius Roller, then dean of the Accounting Department, in a letter of recommendation. Nancy was soon joined by Wilson and Linda in Seattle and, shortly thereafter,
their second daughter Melba was born. They moved from Seattle to Cleveland and then Pittsburgh, where Freda was born. The family subsequently moved to New York, California, Tokyo, Hong Kong and, finally, Nancy and Wilson settled in Beijing as US expatriates. In the early years, Nancy put her career on hold to raise the girls. But in 1979, with everyone in school, she returned to accounting, working for Bullocks, ADP, and later Stanford Children’s Hospital. “She maintained a strong affinity for accounting throughout her life,” says Freda. “When I was going to college, I began in urban studies with an eye toward development and city planning, which baffled my mother. When I switched to finance, she still didn’t understand why I wasn’t getting an accounting degree.” Profile in courage Freda, who followed her own path to investment banking at Goldman Sachs, is awed at the courage it must have taken for a young woman from China in the early 1960s to immigrate alone, learn a new language, attend a rigorous accounting program, and establish a foothold in the US for her family. Nancy was never short on grit or tenacity. “Her whole life was an example to us that there was nothing we couldn’t
do if we put our mind to it,” reflects Freda. “From her upbringing in China in the first half of the 20th century to coming here on her own to returning to the workforce at age 50 to buying her first car by herself at age 70… she never let traditional notions— or barriers—hold her back.” Nancy’s fearlessness fueled a passion for learning and pursuing new endeavors throughout her life. Her many interests included cooking, tai qi, gardening (sometimes late into the night), investing, Chinese calligraphy, Japanese flower arranging, knitting, and even raising silkworms. This curiosity, drive and determination inspired her daughters, who observed their mother’s many talents with an admiration that went beyond familial respect. Now the sisters have paid forward that admiration with the endowment gift in honor of their mother, who passed away in 2016 at the age of 87. The Nancy Fulan (Liu) Wang Endowed Fund will ensure that generations to come will share in the same kinds of opportunities that the Foster School once unlocked for the remarkable mother of Linda, Melba and Freda. Already the fund is supporting Jingqing Zhang, a student in Foster’s Master of Professional Accounting Program, in her work to become an accountant—just like her own mother back in China. n – Eric Nobis
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Bits of Buzz Sam Tanner and Peter Keckemet form a partnership of invigorating deliciousness One day last year, Sam Tanner (BA 2016) phoned his friend, fraternity brother and business partner, Peter Keckemet (BA 2016). “Pete,” said Tanner, “I just got laid off.” “Did you get severance pay?” asked Keckemet. Tanner did. “That’s great!” replied his partner. “We can afford to buy some chocolate.” Along with draining their respective savings accounts, selling some stock, and borrowing commercial kitchen space, Tanner’s severance was a key piece of the financial puzzle that would help the two launch Joe Chocolates. Before there was chocolate, oatmeal The idea for the venture came to Tanner while taking the Foster School’s Creating a Company class. Tanner noticed many of his classmates creating wearables or tchotchkes. “If you sell those, you’re going to have to find a new customer every single time,” he reasoned. “But if you make a good consumable, you can depend on repeat customers.” His team began experimenting with products aimed at college students. Caffeinated oatmeal came first. It was horrendous. But chocolate and coffee made all kinds of sense. A road less traveled While the venture showed some promise, Tanner’s classmates all left to take steady jobs in Seattle’s booming economy. Keckemet was waiting in the wings. The pair had collaborated on a startup during their sophomore year, a failed gift card trading app, and knew they didn’t want to pursue another tech venture. They did know that they wanted to work together again, and that they shared a passion for food. So, instead of taking jobs at Amazon or Deloitte or Starbucks in the summer of 2016, Keckemet and Tanner were perfecting their “Bits of Buzz.”
Brother, can you spare some chocolate? One of the biggest challenges for the fledgling company was getting their hands on the right chocolate. After tasting countless batches paired with coffee beans, the duo landed on a creamy dark chocolate blend from Guittard. The problem? They could only afford 25 pounds at a time, which wasn’t enough to order wholesale. They hustled and found a local chocolatier who was willing Peter Keckemet and Sam Tanner of Joe Chocolates. to resell 25 pounds of their customers. Thankfully, we’ve seen a his monthly order. “We could barely afford steady growth in every location, which is a it,” says Keckemet. “But by December of wonderful feeling.” 2016, we were using enough chocolate to As of January, Keckemet and Tanner place our own order. Now, we go through a have their own retail location. They ton each month.” purchased Local Color, a coffee shop in What hasn’t changed is the way they Pike Place Market, and plan to renovate in make the product. Chocolate, coffee and the fall. Their enthusiasm is palpable. inclusions are mixed together to create “Our goal is to do the majority, if not all, 3.5 lb. slabs, which are broken into bits and of our chocolate production in the space, packaged by hand. Flavors include Holy and also have one of the best espresso Cacao, Salted Caramel, Honey Almond bars in the city,” says Tanner. “We’ll be and Midnight Coconut. blazing the trail of how to combine coffee A place to call home and chocolate.” Regardless of flavor, a ton of chocolate “We want to nail the middle of the Venn a month equates to a fair number of Joe diagram between them,” adds Keckemet. Chocolate fans getting their buzz on. Some So, who’s Joe? customers are finding them online. Most There is no “Joe” currently associated discover the product on the shelves of with Joe Chocolates, but the founders are Pacific Northwest retailers such as New looking for one. The name is a reference to Seasons and Bartell Drugs, one of their coffee. There’s the equivalent of 2 cups in first customers. every 2.5 oz. bag. n “Bartell was willing to take a risk on us, two college kids making chocolate – Andrew Krueger at night in a restaurant,” says Keckemet. “They let us go in store, do demos, meet summer 2018 | 31
Not Fade Away Kathy Dewenter, the Joshua Green Professor of Finance, died in February after a long battle with cancer. A former PACCAR Award winner, she was an indelible figure in Foster School classrooms for more than a quarter century. We can think of no better way to honor her legacy than through the words of two Foster undergrads who took her final course.
Throughout our lives, we meet thousands of people, but few who leave a permanent impression on us. On rare occasions we meet someone whose impact transcends the time spent with them. Professor Dewenter was that kind of person for me. I had heard about her course from several friends. A mentor said it was “the best course you can take—don’t miss it.” A friend told me, “I’ve never had to think harder in my life.” Another put it more bluntly: “She’s the most badass woman I’ve ever met… She’s scary.” When I showed up to class on the first day, Kathy didn’t look the way I expected. She was shorter than I had imagined. Her hair was gone, her hands shook, and she was visibly suffering the effects of chemo. Yet you never would have guessed that there was anything wrong with her from the way she spoke, thought and taught. And she pushed us hard. I’ve never met someone who could take apart an argument so effectively. When she looked at you, you felt like you were being x-rayed. When I heard that she was working on our course even in her final days, I felt guilty. Who was I to deserve the precious time of this incredible woman? Yet I know she wouldn’t have had it any other way. She was not the kind of person who let something stand in the way of doing what she meant to do. Her care for her students never diminished. I feel honored, humbled and grateful to have been one of her final students. And I know that, for me and countless others, her place in our hearts and minds will never fade. Skye Scofield (BA 2019)
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Kathy was the epitome of tough love, and her high standards produced more cohesive effort from a group of students than I have ever witnessed. She never babied us or accepted anything less than a well-conceived and articulated answer. This forced us to learn quickly and helped me realize that I am more capable than I had previously believed. There was no fooling Kathy, and never even the thought of messing around in class. If she was able to push through weekly chemotherapy and still come to each lecture fully prepared, what possible excuse could we have? Her determination never wavered, and she refused to let the cancer define her. There was never a doubt about her sharp mind, her heroic strength, or her kind intentions. Until the very end, we knew that she never wanted our pity—she would prefer that we remember her by continuously seeking improvement as young professionals and global citizens. I wish I could quantify the impact Kathy has made on me in five short weeks—and then create an exhibit to put at the end of a write-up, in 12-point font, just the way she preferred. But I can say I will carry her teachings and fiery personality with me forever. I aspire to someday be a brilliant, trailblazing and remarkable woman, just like her. I am so grateful for the time that we had. Rose Jao (BA 2018)
Which school’s program finished first for MBA job placement in both Bloomberg Businessweek and U.S. News & World Report again this year? Which business school’s faculty was
ranked in the top three in the world by the Financial Times for research productivity in 2018?
Which school’s MBA program has risen most in the rankings over the last decade?
UW Foster School of Business
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PAID S eattle, WA P ermit N o. 62 ADVAN C E M E NT B ox 353200 S eattle , Wa 9 8195-3200
Michael G. Foster school of business University of washington