FOSTER
Michael G. Foster school of business University of washington Fall/winter 2016
business 1917
a century in the
making
foster @ 100 page 9
Plus: Trend Spotting page 18
The Foster Effect page 24
2017
UW Campus, 1959
Features
departments
FOSTER
business Dean James Jiambalvo
Associate Dean of Advancement Steven Hatting
Director of Alumni Engagement Andrew Krueger
9
A Century in the Making Foster @ 100 As we prepare to celebrate the first 100 years of business education at the University of Washington in 2017, take a trip back in time to revisit some of the people and programs, moments and memories that have shaped the Foster School of Business into one of the world’s finest
18
Trend Spotting In Washington and around the world, Dan Baty sees—and seizes—business opportunities ahead of the curve
3
Managing Editor Renate Kroll
News
Contributing Writers
EY Day, Travels with Foster, Boundless Leadership, Generation Next, Too Big to Ail, First Class, In the Zone, Foster Olympians, In the Rankings, Startup U, Getting on Board
Photography
Ed Kromer, Carolyn Marsh, Sarah Massey
Matt Hagen (principal), Paul Gibson, Christine Moody, Karen Orders, UW Special Collections, UW Photography Historical photos primarily courtesy of Ruth Grant Pearson collection.
Design a.k.a. design
26
Faculty Research Briefs, Class of 2016, Honor Roll, Growth Notes
24
Foster School of Business Marketing & Communications University of Washington Box 353200 Seattle, WA 98195-3200 206.543.5102
On the Web foster.uw.edu
Foster Business is published twice a year by the University of Washington Foster School of Business. The publication is made possible by donations from the Ivar Haglund Fund. No state funds are used in its production.
The Foster Effect A recent alumni survey measures the magnitude of the UW Foster School’s economic impact
Change of Address?
33
Alumni Ben Forrest, Akira Kiyota, Lani Aviado, Michael DeAngelo
fans@uw.edu
Comments? bizmag@uw.edu
Trouble is our business More precisely, your business problem is our students’ consulting opportunity. From marketing and finance to operational and system challenges, the Foster School has been fielding teams of undergraduate and MBA consultants for decades—with great success. Your organization gets in-depth analysis and strategic solutions, and you provide a real-world setting for students to apply their learning.
Contact us to explore a project we can perform for you. Undergraduate consultants:
MBA consultants:
Josina Garnham 206.616.8626 josinag@uw.edu
Jennifer Bauermeister 206.221.3533 jenbauer@uw.edu
foster.uw.edu/studentconsulting
NEWS
EY Day
Travels With Foster
Celebrating Foster’s rich partnership with a firm of small name, but big reputation
Global Business Center celebrates 25 years of expanding horizons
May 11 was EY Day at the Foster School, a celebration of the close partnership with the big four accounting firm whose presence can be felt throughout the school. In his lunchtime keynote to a throng of Foster students, Dan Smith (BA 1979), the managing partner of EY’s Pacific Northwest practice, noted that EY will hire 100 UW students this year. Twenty-one EY partners are Foster alumni, and Foster grads work for the firm in 23 different cities. “You are the future of EY,” Smith said. “We need to continue to support schools like Foster. Without you, we can’t be successful.” With that, he offered a few pearls of wisdom for those preparing to launch their careers:
The Global Business Center adds many facets to the Foster School experience. International business certificate programs for undergrads and MBAs. Scholarships. International courses. Research with the Gates Foundation. A global business forum. International case competitions. A visiting scholar program. A photography competition. The list goes on and on. But as the center turns 25 this year, what it celebrates above all is its most popular feature: international study. In June the GBC marked its silver anniversary with a Celebration of Study Abroad. Faculty, alumni and students—some seasoned travelers and some just about to embark on their global adventures—gathered in Anthony’s Forum to exchange travel tales and celebrate the journey of the GBC. Founding faculty director Dick Moxon moderated a panel of Foster faculty on what travel teaches us about global markets. Panelists Charles Hill (professor of management and organization), Jennifer Koski (associate professor of finance) and Doug MacLachlan (professor emeritus of marketing) shared their insights on the value of international experiences and the importance of challenging preconceived notions about doing business in other countries. Last year, Foster undergrads studied in 30 countries, stretching from Ecuador to Sweden to Vietnam. Since 1998, more than 1,000 Foster MBAs have participated in study tours to 31 nations, including, most recently, South Africa and Cuba. Since 1990, the Global Business Center has been offering Foster students opportunities of a lifetime.
©istock.com/FranvandenBergh
1. Don’t over-plan your career 2. Recruit a mentor—or mentors 3. Find your work/life balance 4. Become a team player 5. Think (and act) globally 6. Embrace diversity 7. Build your resume
winter 2016 | 3
NEWS
Boundless Leadership Celebrating opportunities of a lifetime, and the visionary leaders who create them “How do we solve for everyone?” asked Margo Georgiadis, Google’s president of the Americas, during her keynote conversation at the Foster School’s 25th annual Business Leadership Celebration. It’s an appropriately ambitious goal for a company whose very name pushes the infinite. But Georgiadis, who also leads the 10,000-member Women@Google organization, wasn’t only speaking of her company’s imperative for a more representative workforce to understand and address the information demands of an increasingly diverse marketplace. She also was challenging companies in every industry to embrace gender and ethnic diversity—as well as the coming revolutions in mobile, artificial intelligence, machine learning, video and virtual reality—to better serve their rapidly evolving customer bases. “A lot of business leaders still underestimate how incredibly pervasive these changes will be,” said Georgiadis. Outlining her own approach to authentic leadership, Georgiadis professed establishing a culture of psychological safety and resilience (to encourage innovation and risk-taking), and a “heads-up versus heads-down” orientation to “clear a path to help my people run faster.”
Georgiadis added that curiosity is critical to innovation. To remain inspired, she tries to meet two people each week who are unrelated to her work. Distinguished Leaders Providing more than a week’s worth of inspiration were the 67th and 68th recipients of the Foster School’s Distinguished Leadership Award: Gary Wipfler (BA 1981) and Jeffrey Brotman (BA 1964, JD 1967). Wipfler’s first act upon joining Apple as treasurer in 1986 was to deliver the firm through a life-threatening liquidity crisis. Thirty years later, the vice-president and corporate treasurer manages $235 billion in cash and investments—“the Bank of Apple” that finances innovation across the world’s most valuable brand. Wipfler said he has learned volumes from colleagues who have built this amazing company—Steve Jobs and beyond. “Leadership is about striving to do things the right way, and leading and teaching by example,” said the proud parent of two current Huskies. “It’s about being smart but not arrogant. It’s about being honest and curious, listening, and encouraging the team to take measured risks, pushing the team to continually evolve.”
Foster MBA Mike Greene, Margo Georgiadis, Dean Jim Jiambalvo, Jeffrey Brotman, Gary Wipfler, alumna Claire Lee
4 | Foster Business
Brotman, the co-founder and chairman of Costco, joked about the giant warehouse retailer following the visionary tech firms of Google and Apple. “It’s kind of hard to be transformative selling gallons of mayonnaise and $1.50 hotdogs for 35 years,” he joked. But Brotman pointed to some early decisions that have proved transformational to the Fortune 15 company as it has grown to $100 billion in sales, and 160,000+ employees. Specifically, the code of ethics that he and co-founder Jim Sinegal established early on. “It was a subtle thing, but a very long-term view of the world,” Brotman continued. “Obeying the law, taking care of employees and respecting suppliers at a time when most didn’t care about those things—that could be called leadership.” Opportunities of a lifetime A longtime leader at the UW, Brotman also called out the recently announced Be Boundless philanthropic campaign that endeavors to raise $5 billion—the most ever by a public university. “Isn’t it great to be a Husky?” asked the former UW regent. “Many in this room have worked tirelessly and given all kinds of support to the Business School and others. And we’ve built an amazing university that’s creating enormous opportunity and prosperity, not only in Seattle but around the world.” To illustrate a few of these opportunities, Foster students and young alumni shared life-changing experiences provided by the Foster School in six areas: global business, entrepreneurship, consulting, sales, transitioning from the military, and a high school pipeline for minority students. As the net proceeds from the Business Leadership Celebration support student scholarships at the Foster
Generation Next School, Dean Jiambalvo introduced a surprise on this 25th anniversary: “Jiambalvo Bucks.” With this special purple currency, each attendee was asked to direct $25 of the evening’s proceeds to support one of these six opportunities of a lifetime. And every Jiambalvo Buck was doubled by the event’s Silver Anniversary Sponsors: Liberty Mutual Insurance and Safeco Insurance.
Thank you to the following organizations and individuals for their support of the 2016 Business Leadership Celebration Reception Sponsors:
Alaska Airlines and Costco Wholesale. Silver Anniversary Sponsors:
Liberty Mutual Insurance and Safeco Insurance. Purple Sponsors:
Accenture, American Piledriving Equipment, Anthony’s Restaurants, The Boeing Company, Jason & Stephanie Child, Deloitte, Neal & Jan Dempsey, Bill & Sally Douglas, EY, Freestone Capital Management, Fritzky Family, GM Nameplate, Charlie & Nancy Hogan, Holland America Line, Kemper Development Company, KPMG, Philips Healthcare, Premera Blue Cross, PwC, Shelley Reynolds, Bruce & Gail Richards, Saltchuk, Starbucks, Strideline, superGraphics, T-Mobile, Wells Fargo, Windermere Real Estate, Gary & Barbara Wipfler, and Zevenbergen Funds. Gold Sponsors:
Bob & Ann Christensen, Bill Jackson, Dorrit Bern, Kathy & John Connors, Eli Lilly, Eileen O’Neill Odum, Providence Health & Services, and Washington Society of CPAs.
Myspace founder urges Foster grads to ask “why not” “You are a generation of disruptors,” said Chris DeWolfe (BA 1988) to the Foster School graduating class of 2016 at Hec Edmundson Pavilion in June. “But unlike the professional pessimists who are cynical about the millennial generation, I’m more confident than ever that you will do disruption right.” DeWolfe knows a few things about disruption. The co-founder and former CEO of the seminal social networking company Myspace helped revolutionize the way that humans interact and form communities in the digital age. Now, as CEO of Jam City Games (formerly SGN), he’s changing the way that casual games are produced and played. Though he’s a generation older than today’s graduates, DeWolfe conveyed a kinship with the emerging generation of young adults: “You’re curious, you’re creative, you’re connected with the world.” And though native facility with digital technology sometimes defines Millennials, he argued that “technology is your window into the world. It doesn’t isolate you, it inspires you. It doesn’t enslave you, it liberates you. It doesn’t close you off, it opens new horizons.” DeWolfe challenged the Foster grads to use this power for positive change in the world. Cure our most deadly diseases. Harness the power of green energies. Solve the intractable problems of poverty, hunger, lack of water and education. Stave off climate change. As they embark on their own idealistic and ambitious goals, DeWolfe offered the newly minted grads a few pieces of advice: • Don’t listen to the so-called experts. They base their opinions on the past. You are the future. Listen to your gut. • Follow your passion. Success and money will follow. • Learn from failure. There will be another day. Don’t let it erase your confidence. Let your losses inform you rather than imprison you. • Be present with friends and family. They are your cornerstone, your home base. They help you keep perspective and balance. • Push yourself out of your comfort zone. • Refuse to accept the world as it is. He closed with the George Bernard Shaw quote that was more famously paraphrased by Robert F. Kennedy during his 1968 presidential campaign: “Some men see things as they are and say, why? I dream things that never were and say, why not?” “You guys are the doers, the dreamers, the disruptors,” DeWolfe continued. “So let’s get out and reboot the way Americans and the rest of the world do things. Let’s get out there, Foster graduates, and ask, why not?”
fall / winter 2016 | 5
NEWS
Too Big to Ail
In The Zone
Foster summit writes a prescription for America’s healthcare inefficiency
Foster senior helps deliver UW’s first national team title in women’s golf
What the heck is wrong with healthcare? And why is the customer experience often so poor? Those questions, from the mouths of Foster MBAs to Gubby Barlow, the retired CEO of Premera Blue Cross and last year’s Edward V. Fritzky Chair in Leadership, sparked the Foster School’s “Too Big to Ail” conference, on making healthcare work better in a changing world. Keynote speaker Christopher Kersey of the private equity firm Camden Partners spun the industry’s inefficiencies as an enormous business opportunity. He also outlined six megatrends that will transform healthcare: cybersecurity (privacy vs. convenience); big data and revenue cycle management (leveraging improved analytics); demographics (population-specific solutions); personalized medicine (improved diagnostics); biopharma (breakthroughs in biotech investing); and the “Internet of Things” and mobile health (improving outcomes through data). The common denominator? Technology. Nearly 300 healthcare leaders and Foster students participated in additional panels on capitalizing on opportunities, meeting consumer expectations and changing healthcare from within. The Too Big to Ail conference was hosted by the Foster School and presented by the Fritzky Chair, Premera Blue Cross and Ed Fritzky leads a panel at the Providence Health & Services. conference
First Class Foster School’s Master of Supply Chain Management degree debuts Amazon. PACCAR. Boeing. Starbucks. Costco. Seattle is home to world-class companies practicing cutting-edge supply chain management. So it makes sense that the Foster School would launch a Master of Supply Chain Management (MSCM). The new one-year, work-compatible program addresses the growing demand for innovative supply chain leaders and equips students with solid business skills, decision-making capabilities, and IT knowledge to oversee the flow of goods and services. And close partnership with the region’s business community ensures a practical learning experience. The inaugural cohort of 38 MSCM students is 55 percent men and 45 percent women, representing a variety of industries and backgrounds—and nations, including the US, Canada, China, Taiwan, Indonesia and American Samoa.
6 | Foster Business
In June, Foster senior Ying Luo (BA 2016) took the UW women’s golf team to the pinnacle: its first NCAA Championship. The finance student from Shenzhen, China, led the young Husky team into match play—a progressive tournament of fiveplayer duals that decides the team champion—with her team-best 11th place finish in the preliminary NCAA Medal Championship, finishing four rounds of golf at one-under-par 287. In the thrilling final round of match play against defending champion Stanford, Luo won her match with a spectacular 45-yard birdie wedge on the 18th hole before teammate Julianne Alvarez broke a 2-2 deadlock in the 20th hole of her matchup that triggered the Husky celebration. Luo’s final season at the UW yielded her third All-Pac-12 Honorable Mention selection after posting a top-25 finish in all but one of the team’s tourneys. She finished second at the prestigious Peg Barnard Invitational. Outstanding in the classroom as well, Luo was a three-time Pac-12 All-Academic First-Team selection, and named a Scholar All-American the past three years.
FASTER, HIGHER, STRONGER Foster alumni represent Team USA at Rio Olympics Veteran setter Courtney Thompson (BA 2006) and the USA Women’s Volleyball team brought home the bronze medal from the 2016 Rio Olympics. And Hans Struzyna (BA 2011) helped power the USA Rowing men’s eight to a fifth-place finish in Brazil. Thompson, raised in Kent, Washington, is a veritable legend in Husky volleyball. She led the team to three NCAA final fours and a national championship in 2005, earning All-America and Academic All-America honors three times and the 2005 Honda Award. She is the only woman to have her jersey retired in the UW’s Alaska Airlines Arena. Since her graduation from the Foster School, Thompson has played professionally in Puerto Rico, Poland, Austria, Switzerland and Brazil. She has also been a fixture on the national team, winning a silver medal at the 2012 Olympic Games and gold at the 2014 FIVB World Championships and 2015 FIVB World Grand Prix. Thompson’s inspirational career and indomitable spirit are chronicled in the documentary “Court & Spark.” Struzyna, born and raised in Kirkland, Washington, was instrumental to the latest golden age of Husky Rowing. He helped power the UW freshman eight to a silver medal finish at the 2008 IRA National Championship Regatta, then won gold with the Husky varsity eight at the 2009 and 2011 IRAs (and silver in 2010). This launched a run of unprecedented dominance by UW Men’s Crew that yielded six national titles in seven years. Struzyna has competed at the international level since 2007, when his boat won the junior eight at the USRowing Club National Championships. He joined the under-23 national team in 2009 and the senior national team in 2013, winning the quad sculls at the 2013 World Championship Trials, before joining the prestigious men’s eight for the Rio Olympics.
Courtney Thompson
Hans Struzyna
In the Rankings Foster continues strong performance in variety of metrics MBA excellence Bloomberg Businessweek currently ranks the Foster School’s MBA Program 5th among America’s public universities and 19th overall. Meanwhile, U.S. News & World Report rates the Foster MBA Program 8th among public universities and 27th nationally in its 2017 “Best Graduate Schools Rankings.” Foster’s Evening MBA also ranks 8th among publics and 13th overall. In specialty rankings, U.S. News rates Foster 22nd in entrepreneurship and 31st in accounting. Wondergrads U.S. News & World Report ranks the Foster School’s Undergraduate Program 13th among public universities and 23rd overall in its 2017 “Best Colleges” rankings. In specialty rankings, U.S. News rates Foster 15th in accounting, 21st in international business, 22nd in entrepreneurship, 22nd in management and 26th in finance. Outstanding value Poets & Quants, the influential MBA news site, reports that the Foster School’s MBA Program has one of the lowest debt-to-salary ratios of any nationally ranked b-school. It’s one of only three to count both average salaries over $110,000 and average debt at 30 percent of salary or less. Foster’s average MBA debt of $35,104 this year is a fraction of the average student debt—in excess of $100,000 at many top-tier schools— and a national average debt of $80,000, according to Forbes. Job placement Poets & Quants reports that the Foster School’s MBA job placement rate of 95.6 percent last year ranks second-highest among the top 30 business schools. Bloomberg Businessweek finds the Foster MBA 11th in job placement and 12th in employer satisfaction among the top 87 b-schools in the US. Intellectual horsepower The 2016 Academic Ranking of World Universities ranks the University of Washington 15th among the world’s best universities, and 24th worldwide for business and economics (up from 33rd in the last ranking).
Fall / winter 2016 | 7 fall
NEWS
Startup U
Getting on board
Buerk Center catalyzes student startups through Business Plan Competition, Jones + Foster Accelerator
Wells Fargo adds sponsorship to the Alaska Airlines Environmental Innovation Challenge
JikoPower won the grand prize and lion’s share of this year’s UW Business Plan Competition (BPC) total prize money of $85K. The collaboration of UW business, political economy and engineering students is developing thermoelectric generators that harness wasted energy from cook stoves and convert it into electricity to charge cell phones and LEDs. Meanwhile, the Buerk Center for Entrepreneurship admitted ten new student startups into its Jones + Foster Accelerator, where they receive mentoring, develop milestones and earn $25,000 in additional seed funding if they can meet them in six months. The businesses include:
A good idea is infectious. First Alaska Airlines began a 10-year partnership with the UW Environmental Innovation Challenge in 2014. This year, Wells Fargo announced a $450,000 three-year sponsorship of the event, organized annually by the Foster School’s Buerk Center for Entrepreneurship. In this 8th edition of the challenge, 23 crossdisciplinary student teams from eight universities across Washington pitched their plans for a viable business that would improve the environment. Winner of the $15,000 grand prize was AgriC, a collaboration of UW business, economics, biology, civil engineering and environmental engineering students who are producing biodegradable plastics—made from crustacean shells—that decompose as fertilizer in agricultural applications.
ACRELO – marketing automation software for the commercial real estate industry Bellhapp – a customer-experience app linking patrons to restaurants Decaf Style – sachets that remove the caffeine from any cup of coffee (second prize at the BPC) Engage – medical devices for developing countries (fourth prize at the BPC) FitTraction – innovative app for increasing motivation,
accountability and engagement of fitness communities Frontier – interactive videos guiding users through
hands-on tasks that are representative of a profession Ionic Windows LLC – membranes for advanced batteries,
fuel cells and water desalination (winner of Clean Tech Prize at the BPC)
Study Abroad photo contest “My Global Lens” winner
Joe Chocolates – coffee and chocolate together in one confection Tack Technologies – platform helping non-technical teams collaborate Tape-It-Easy – drip-tape
Of the 36 companies that have completed the accelerator program since its inception in 2010, 27 are still in business.
8 | Foster Business
Photo by Teresa Ling, China.
©istock.com/bgfoto
installation offering water conservation for farmers
100 Years! A few of our more “seasoned” alumni may recognize the young man on the left, below. That was me when I first started teaching at Foster, in 1977. That rookie professor had a lot to look forward to. So many things have changed since then, but of course, that’s just a fraction of the University of Washington College of Business Administration/UW Business School/Michael G. Foster School of Business timeline. We’ve undergone myriad changes and made incredible strides since the second business school in the western United States first opened its doors and 12 students and seven faculty walked through in 1917. From our humble beginnings to our current position as a world-class institution, we’ve come a long way. As our school and our community begin to celebrate the past 100 years, we look forward to the next 100. Where will we go? What will we become? I hope you will join us in that journey, both in looking back and continuing to move forward. To start the journey, we’ve set up a website to collect and share your Foster memories. What was your time like when you studied business at the UW? Who were your favorite professors? What were your most memorable experiences? Who have you become with the help of the people and programs in PACCAR, Balmer or even Commerce Hall? Submit your stories, photos, and videos at foster.uw.edu/storyshare. And beginning in January, you can view your classmates’ memories, too. On the following pages, you’ll find a timeline of notable events throughout our school’s history. It’s a big story to tell, and we couldn’t fit it all in here, but you’ll find even more on the online version at foster.uw.edu/timeline. Thank you for joining me as we walk down memory lane, and as we look towards Foster’s future and the next century of business education.
©istock.com/pixelparticle
James Jiambalvo Orin & Janet Smith Dean in Business
Deans
1917-1918:
1918-1923:
1923-1926:
Carlton H. Parker
Stephan T. Miller
Howard T. Lewis
1917 The School of Business Administration is established at the University of Washington, in response to the urging of Seattle’s emerging business community. It is the second business school in the western United States. Seven faculty and 12 students, enrolled in both Bachelor of Business Administration (BBA) and Masters of Business Administration (MBA) degree programs, commence study in the newly constructed Commerce Hall (now Savery) on the Liberal Arts Quad.
1920 By 1920, one in four UW undergraduates studies at the College of Business Administration. One-third of those early business majors are women.
a century in the making
foster @ 100
As we prepare to celebrate the first 100 years of business education at the University of Washington in 2017, take a trip back in time to revisit some of the people and programs, moments and memories that have shaped the Foster School of Business into one of the world’s finest
10 | Foster Business
1926-1930:
1930-1938:
1938-1948:
William E. Cox
Shirley J. Coon
Howard Preston
Ruth Grant Pearson (BA 1926), one of the first female faculty members, heads the merchandising curriculum from 1926-31 and establishes the University Women’s Vocational Club in 1928.
1921 American Association of College Schools of Business (AACSB) invites the renamed College of Business Administration to join its select membership of 20 institutions nationwide.
1926
Students establish the delta chapter of Beta Alpha Psi, the international honorary organization for financial information students. International student exchange (with China) and business “apprenticeships” are offered.
1948 Economics splits from the College of Business Administration, opening a new era of human-centered management education.
1938 1941
The College hosts the first Pacific Coast Banking School, a residential summer institute for banking professionals created to shore up a system severely tested during the Great Depression.
Programs are instituted to train Army quartermasters and Navy supply officers during World War II.
1950
Pacific Coast Banking School – Pacific Coast Banking School
Doctoral Program is introduced, first issuing Doctor of Commercial Science degrees before adopting the modern Doctor of Philosophy (PhD) in 1972.
1953 Advanced Management Seminar becomes one of the nation’s first residential executive development programs.
Mackenzie Hall opens its doors as the new headquarters of the College of Business Administration faculty and administration.
1960
Balmer Hall, the 80,000-square-foot business classroom building, opens its doors. Aerospace Industry Management Seminar (AIMS), a partnership with Boeing, debuts.
1962 fall / winter 2016 | 11
Deans
1949-1964:
1964-1981:
Austin Grimshaw
Kermit O. Hanson
1969 The Management Program (now called Executive Development) debuts, offering a concentrated, practical management education.
1970 School’s first courses in entrepreneurship are developed by professor Karl Vesper. Association of Black Business Students is established and later advised for decades by influential marketing professor Thaddeus Spratlan.
Vesper
Spratlan
1984 1966
Executive MBA (EMBA) Program begins, providing an advanced management education to the region’s emerging leaders.
The College of Business Administration is reorganized as the School of Business Administration. Journal of Financial and Quantitative Analysis is first published. One of the most influential journals in finance, it’s still headquartered at the UW.
1965 Advisory Council of corporate leaders is assembled, followed by a Board of Affiliates (individual and corporate donors). Graduate School of Business Administration is established, moving the UW into an elite group of 20 American schools with a dedicated graduate business program.
Center for the Study of Banking and Financial Markets is established.
Pacific Northwest Executive is first published, focusing faculty expertise on the region’s economic, managerial and policy issues. Center for Retail, Transportation and Distribution Management is launched. The Ivar Haglund Fund, one of the first large endowments at the UW, is established by a bequest from Ivar Haglund (BA 1928), the legendary Northwest restaurateur. UW Regents approve the new Department of Management Sciences, now known as the Department of Information Systems and Operations Management (ISOM).
1985 Ivar
12 | Foster Business
1983
1981-1989: Nancy Jacob
1971
1975
Robert “Rocky” Higgins becomes the first of 12 business faculty to receive the UW Distinguished Teaching Award, the institution’s highest teaching honor.
Pacific Rim Bankers Program is founded by Dean Kermit Hanson.
1977
International student exchange with the Cranfield School of Management in Great Britain ushers in the modern era of international study.
1982
1978 Enterprise, the School of Business Administration alumni newsletter, is first published. Women + Business Conference convenes 500 participants from the public and private sectors, and leads to the publication of the first directory of women-owned businesses in the Pacific Northwest.
1980
Professor Richard Moxon becomes coordinator of the Pacific Rim Project, sparking a new era of research and instruction in international business.
MBA Alumni Association forms to better connect graduates of the School’s masters programs. Master of Public Accounting (MPAcc) Program debuts. MPAcc
1990
1986 William Sharpe – Nobel Prize organization
Career Info Day
First Career Information Day brings together 1,000 students and 60 regional employers in the Hutchinson Hall Gymnasium. Minorities in Business Program (later Business Education Opportunity Program) is introduced to increase enrollment and support of underrepresented students.
Sharpe
William F. Sharpe wins the Nobel Prize in Economics for creating the Capital Asset Pricing Model (CAPM) while on the School’s finance faculty in the 1960s. Center for International Business Education and Research (now the Global Business Center) is established with funding from the US Department of Education. fall / winter 2016 | 13
Deans
1989-1994:
1994-1998:
Robert Leventhal
William Bradford
1992
1993
Environmental Management Program is founded.
Certificate of International Studies in Business (CISB) program launched.
Program in Engineering and Manufacturing Management (PEMM) is launched in collaboration with the College of Engineering. Business Diagnostic Center
Faculty develops modern management education programs for universities in the former Soviet Union. Business Diagnostic Center is founded by MBA students, deploying student teams to provide consulting and strategy analysis to local firms. Alan Greenspan headlines the school’s 75th Anniversary Celebration, which becomes the annual Business Leadership Celebration.
1999 Balmer Café opens between the Undergraduate and MBA Lounges. Global Business Challenge (now Case Competition) begins bringing student teams from around the world the UW to solve a challenging current case in international business.
Balmer Café
Program in E-Business is launched. MBA Mentor Program is established, connecting Foster MBA students with senior executives at a wide array of area firms. Business Leadership Celebration
Professional Sales Program is developed by Jack Rhodes (BA 1961). Minority Business of the Year Awards established.
1991 Program in Entrepreneurship and Innovation is launched by Professors Gary Hansen and Borje “Bud” Saxberg, and venture capitalist Neal Dempsey (BA 1964).
MBA Mentor Program
2000 UW begins years of dominance in the MBA Challenge For Charity (C4C). C4C Hansen and Dempsey
14 | Foster Business
GBCC
Board Fellows Program begins placing MBAs on the governing boards of non-profit organizations.
1999-2004: Yash Gupta
1995 BEDP Board
1996
GEMBA
Business and Economic Development Program (now the Consulting and Business Development Center) is launched to provide education and student consulting to small businesses with the goal of spurring economic growth and job creation in underserved communities around the state. School of Business Administration becomes UW Business School. Global Executive MBA (GEMBA) Program is established in a collaboration with Yonsei University. UW Business School publishes its first website.
Evening MBA Program is introduced. This threeyear, work-compatible program affords the same access as the Full-time Program to quality curriculum, programs, faculty and student services.
1997
1998 UW Business Plan Competition launches. The Computer Experience—still in business as Giant Campus—wins the inaugural $10,000 grand prize. PACCAR Award for Excellence in Teaching is established by PACCAR Inc. The first recipient of the school’s highest teaching honor, selected annually by MBA students, is Karma Hadjimichalakis.
First Global Study Tour sends MBAs to Indonesia. Subsequent classes will visit Britain and Brazil, China and Cuba, South Africa and Singapore, Turkey and Thailand. Construction is completed on the Seafirst Executive Education Center (now Bank of America Executive Center) and the Foster Business Library.
BPC
PACCAR award
2001 Technology Management MBA (TMMBA) Program is launched, bringing to the Eastside a work-compatible program for tech professionals who wish to move into leadership roles.
Seafirst Executive Center
2002 Freshman Direct today
Freshman Direct Program commences. The inaugural cohort enters the Business School with an average GPA of 3.94 and SAT score of 1371. CFO Forum first convenes the region’s chief financial officers and Foster finance faculty.
Global Study Tour
CFO Forum
Dean’s Business Breakfast Lecture Series (now Leaders To Legends) begins, bringing together students, faculty and alumni to learn from some of the region’s top leaders. Nasdaq Trading Room is created by a gift from the Nasdaq Stock Market Educational Foundation, offering students the opportunity to learn about financial markets using real-time data. fall / winter 2016 | 15
Deans
2004-2005: Vance Roley & David Burgstahler Acting deans
Fritzky Leadership Fellows program debuts, deploying outstanding second-year students to coach, mentor and motivate first-year students to achieve maximum professional polish.
2005
Young Executives of Color (YEOC) Program, a nine-month college pipeline program, is established. UWiB
Global Social Entrepreneurship Competition (GSEC) is established, challenging student teams from major universities around the world to create businesses that reduce poverty and improve the quality of life in developing countries.
2006
MBA Professional Development Program provides a customized path to develop communication and leadership skills for first-year MBA students.
YEOC
Dawgs On Wall Street formalizes the network of UW Business School grads working in the nerve center of world finance. Undergraduate Women in Business Association is established, offering opportunities for students to connect with prominent women executives and each other.
2012 Dempsey Hall
2003
Dempsey Hall opens. Named in honor of venture capitalist Neal Dempsey (BA 1964), the three-story LEED Gold building is designed to replace the aging Balmer Hall.
Master of Science in Information Systems (MSIS) is launched. Eastside Executive Center, the Business School’s new satellite facility in Kirkland, becomes headquarters of the new Technology Management MBA (TMMBA) Program. Edward V. Fritzky Endowed Visiting Chair in Leadership is established by a gift from Amgen honoring the career of Ed Fritzky, retired chairman, president and CEO of Amgen acquisition Immunex.
Arthur W. Buerk Center for Entrepreneurship is named in honor of Artie Buerk (BA 1958), a serial entrepreneur and philanthropist whose investments helped start and sustain the Foster School’s growing entrepreneurial offerings. Jones + Foster
Jones + Foster Accelerator is launched to provide additional resources, mentoring, work space and seed funding to student startup teams that meet strategic milestones in going to market.
2013
2014
MBA Strategic Consulting Program is established. EY Center for Career Advancement begins providing dedicated career management services for Foster’s BA and specialty master’s degree students. MBA Strategic Consulting Program
16 | Foster Business
Center for Sales and Marketing Strategy is launched to offer faculty expertise in solving firms’ marketing and sales challenges. National Minority Business Hall of Fame and Museum moves into Mackenzie Hall.
2005-current: James Jiambalvo
2007
2008 Michael G. Foster
School is renamed the Michael G. Foster School of Business in recognition of a combined $50 million in giving from The Foster Foundation, founded by the influential Northwest financier Mike Foster and his parents, Albert and Evelyn Foster. Lavin Entrepreneurial Action Program (LEAP), created by a gift from famed entrepreneur Leonard Lavin, allows a cohort of venture-minded UW freshmen to become engaged immediately in the school’s entrepreneurial offerings.
2011 Gates Foundation Research Group forms, offering graduate students and faculty the opportunity to contribute research-based consulting to global health and education initiatives.
2010
Historic Campaign UW: Creating Futures closes with the Foster School having raised $181 million in private support over eight years. Center for Leadership and Strategic Thinking (CLST) is established by Bruce Avolio to integrate the science and practice of leadership. Minority Business Executive Program is launched, designed to increase the competitiveness of minority owned businesses in the region.
PACCAR Hall is dedicated. The state-of-the-art headquarters of the Foster School, designed by Seattle’s LMN Architects, is certified LEED Gold.
Michael G. Foster – The Foster Foundation Ali Tarhouni – Kuni Takahashi for The New York Times
Alaska Airlines Environmental Innovation Challenge (EIC) is launched to spur development of clean technologies that address ecological challenges.
Tarhouni
EIC
PACCAR Hall
2016
MBA Investment Fund goes live, allowing a “portfolio team” of MBA students the opportunity to manage real money on the financial markets. Executive Education seminar “Women on Boards” is offered to help address the significant gender imbalance in corporate board composition.
2009 Foster blog debuts.
Ali Tarhouni, a senior lecturer, becomes a leading figure in the Libyan opposition government that deposes Moammar Gadhafi during the “Arab Spring.”
2015
CLST
Health Innovation Challenge begins sparking interdisciplinary student solutions to the many challenges facing healthcare.
Women on Boards
Master of Supply Chain Management Program is launched.
HIC
MSCM
Fall / winter 2016 | 17
Trend Sp tting In Washington and around the world, Dan Baty sees— and seizes—business opportunities ahead of the curve By Ed Kromer
“Not sure how you’re going to start this story,” says Dan Baty (BA 1965), with mischief in his eyes. Baty, the founder and chairman of the private equity firm Columbia Pacific Management, and longtime colleagues Rick Evans (MBA 1971) and Matt Powell (BA 1993) have just regaled me with a thousand-and-one tales of entrepreneurial daring in Asia and beyond. Of scouting a hospital site in a Sumatran jungle. Of developing a clinic on the vacant frontier of Bangalore. Of introducing the egalitarian principles of Western healthcare to the region’s rigid social hierarchies. Of navigating China’s byzantine bureaucracy to serve the seniors of Shanghai and Beijing. Of reading the tea leaves—and refrigerator sales. Of seeking stability in Africa. Of transforming a local wine-making hobby into an industry. Of getting into wealth management by popular demand. Where to begin, indeed. “The center of your story should be Dan,” advises Evans, who has worked with Baty for nearly five decades. “But you can’t use my name,” Baty deadpans. He’s joking… I think. Finally, a wry grin confirms it. “We keep a pretty low profile here,” he says, laughing. That’s an understatement of understatement. With deliberately little fanfare, Baty & Co. have built the most successful—most fascinating—Seattle company you’ve never heard of. Even the headquarters of Columbia Pacific, a modest five-story office complex overlooking Seattle’s Lake Union, is camouflaged by the insignia of former occupant Hart Crowser. Baty has more important concerns. More interesting concerns. Columbia Pacific is the first and foremost foreign player in healthcare across Southeast Asia and India. It’s the only foreign-owned senior care provider in China. It runs the largest family-owned winery in Washington state. And its financial advisory wing has more than $2 billion under management. Of course, Baty would tell you that the secret of his sustained success is assembling and empowering a great team—which happens to be richly powered by fellow grads of the UW Foster School of Business. But ask any of them and they’ll point you right back to Baty. He’s always been the man with the plan, an investor as bold as he is visionary. So this epic story of many chapters, spanning North America, Europe, Asia and Africa, is really his story. And it begins in Tacoma.
been enacted. And he could see that America was aging. When Diamond came back with a sweetened offer to run the company, Baty jumped. “I was 26 at the time and thought, what do I have to lose?” he recalls. “This changed the whole dynamic of my career.” Over the next 17 years, Baty built a model long-term care provider network, introducing to the industry a broad range of rehabilitative and therapeutic services. “We always said that we had to take care of the patient first,” Baty says. “If the economics suffer, they suffer.” The economics did not suffer. At its 1979 sale to National Medical Enterprises (now Tenet Healthcare), Hillhaven was the nation’s secondlargest nursing home company. When Baty finally turned over the keys in 1984, the network of 500 properties served 45,000 seniors and was doing $1 billion in annual sales. It was time to try something new. “I was 42 years old,” he says. “And I thought, Dan Baty during his days let’s find out if I’m smart enough.” running Hillhaven.
Early senior moment Baty was born and raised in the “City of Destiny” on the South Sound. By age 10 he knew that he wanted to be in business, though he had no idea how that aspiration would take shape. He earned a BA in accounting at the University of Washington and a JD at Harvard Law School, and worked in the tax department at Price Waterhouse in Seattle. Real opportunity knocked early. A man named Fred Diamond, for whom Baty had caddied as a kid, had founded a small chain of nursing homes called Hillhaven and was looking for an assistant. Baty passed. But he knew that Medicare and Medicaid had just
Aging Asia Baty had known Rick Evans since high school. They both attended the UW and were brothers in the Phi Gamma Delta fraternity. But while Baty equipped himself for business, Evans studied in the Far East and Russian Institute (in what is now the Jackson School of International Studies). “I remember that I was reading Dostoevsky and Dan was reading The Financier,” recalls Evans. “I thought, we are going in different directions.” But their paths soon converged again. Shortly after Evans completed his MBA at the UW, Baty called on his old friend to help build Hillhaven, then Holiday, then Emeritus.
Emeritus entrepreneur Smart move number one: establishing Columbia Pacific in 1984 as a management hub for what would become an overlapping portfolio of healthcare, senior living and other business concerns that stretches around the globe. In 1987, Baty invested in Holiday Retirement and, as chairman, developed a pioneering network of 350 retirement communities across North America and Europe—each featuring private apartments or cottages and all-inclusive services such as meals, transportation, activities and housekeeping—before brokering a $7 billion sale to Fortress Investments in 2007. In 1993, Baty founded Emeritus Senior Living, a provider of assisted and independent living, memory care and skilled nursing. He took Emeritus public in 1995 and, over the next 15 years, expanded its network to 47 states. Its 2014 merger with Brookdale Senior Living created the nation’s largest network of senior care and memory care in America, with more than 1,000 facilities, 80,000 employees and $5 billion in revenues. This was healthcare at scale. But that scale was about to get bigger.
fall / winter 2016 | 19
Then in 1996, they hatched the idea to take their hard-earned expertise in senior health and housing to Asia. On paper, it looked like an incredible opportunity: booming economies, aging populations, shifting societal and familial traditions. Baty and Evans formed Columbia Asia to find out just how good an opportunity. Evans, with at least an academic interest in Asia, became the company’s man in Malaysia, where he established a home and base of operations. They chose Malaysia as a test market because its language and law are based on the familiar British system. And its economy and infrastructure were developing rapidly. “But when we got there,” Baty says, “it became clear that we were 15 years too early.” Plan B Instead, they spotted a more immediate opportunity that looked equally promising: healthcare. The region’s economic miracle was producing a fast-growing middle class, throngs of people moving from farms to cities. Among a consensus of official economic indicators, Evans latched on to what might be called the “refrigerator index.” “When you own a refrigerator, it changes your life. It means you have electricity, and no longer have to find food every day,” he explains. “You are a member of the middle class.” At the time, refrigerator sales in Malaysia were rising at 17 percent per year. And what else was this burgeoning bourgeoisie going to spend money on? Education and healthcare. Of the latter, the only existing options were dilapidated government hospitals or exorbitant private clinics for the rich. Yet the widening middle was living longer, and experiencing more cases of cancer, diabetes and cardiac diseases. “Somebody’s going to build quality hospitals for the middle class somewhere in Asia,” reported Evans to Baty. “You’re absolutely right,” he replied. “Let’s go do it.” They started with an extended-care facility off a newly laid freeway in a burgeoning suburb of Kuala Lumpur. Extended care was easier and less expensive to introduce than a hospital. And it offered a chance to test the regulatory environment and size up the market and competition—at the time consisting largely of Indonesian maids hired to provide in-home care after hospital visits. Columbia Asia’s first state-of-the-art facility, staffed by respected physicians and nurses and delivering patient-centered care, was a hit. And, for Baty and Evans, it was a trove of insights. Innovate, replicate They began building similar extended care clinics followed by hospitals elsewhere in Malaysia, Vietnam, Indonesia and India. But their expansion was methodical, not rash. They hewed to a sensible model and made improvements across the network as they went. And they fought the urge to grow too fast in a market that seemed endless.
20 | Foster Business
Around this time, Matt Powell had come to work at Emeritus before Baty and Evans talked him into moving halfway around the world to help manage healthcare development on the ground. “It was amazing working with Dan and Rick,” says Powell, who recently took over for the retiring Evans as director of global development for Columbia Asia. “Their ability to see opportunity through all the scary and chaotic nature of some of these emerging markets is a skillset that no one else could have taught any better.” There were no better lessons in stress management than the hospital they rebuilt in the remote rainforest metropolis of Medan, Sumatra, or the first health clinic they constructed outside of Bangalore. They developed their first Indian property on a freeway exchange in the middle of nowhere. But Evans’ research showed that young people were moving toward the emerging tech industry, and the tech industry was moving toward the city’s outer rings. “When we bought the land, there wasn’t anything within a mile,” Baty says. “By the time we opened, there were a million people living within a stone’s throw.” A facility designed for 300 visits a day was soon drawing 900. This became the pattern for expansion across the subcontinent. Baty, Evans and Powell would develop a location near a new tech center and offer the only viable alternative in health care: high quality at a reasonable price (which even appealed to higher-end consumers, judging from some of the cars they found parked outside).
“You don’t get that many opportunities—particularly when you’re not science or tech-oriented—to really make a difference. And I think we have made a difference, both in providing quality healthcare and in creating unique opportunities for young people.” – Dan Baty
How’d a healthcare company get into wealth management? “We began managing part of the family’s investments and realized we were doing just as well as the professionals,” says Dan Baty. “Since we had made a lot of money for investors in Seattle and Tacoma over the years, many of them asked if we’d just keep doing it. All of a sudden we’re in the wealth management business with Columbia Pacific Advisors. We don’t advertise. We don’t promote. People just started calling us.”
What’s your favorite place in Asia? “Vietnam,” says Dan Baty. “For a communist country, it’s the most capitalistic place in the world. By that I mean the people and the culture. Everybody’s hustling to make money.” “While we were there they passed a law allowing for private businesses, provided they didn’t employ more than 12 people. Within a year, there were 400,000 of them,” Rick Evans adds. “I mentioned to a very old Vietnamese man I got to know that this was amazing. He said, ‘Oh Rick, capitalism is older than the hills of Asia.’”
What’s your advice for students? “Take philosophy and all the accounting you can get,” says Dan Baty. “I don’t mean that specifically, but the point is that you should learn how to think and add at the same time.”
A Husky to his core, Dan Baty has assembled a dream team of young UW and Foster School alumni at Columbia Pacific Management.
fall / winter 2016 | 21
Columbia Asia’s state-of-the-art medical facilities bring quality, affordable healthcare to the region’s burgeoning middle class.
Secret sauce It’s one thing to spot opportunity. But to turn opportunity into sustained success? That requires a whole different skill set, an ability to innovate operations. Above all the issues of building a company across distinct regions of the world, Baty, Evans and Powell discovered that their real competitive advantage is in providing a superior customer experience. In each location across the region, they hired local management rather than expats. They began pairing a respected physician with an administrator from the hospitality business. Their culture of equal care for all provided a welcomed refuge from the cultural strictures of class hierarchy. And their demand for consistently ethical management and transparency in billing and compensation made Columbia Asia popular with patients, employees, even ambulance drivers—not to mention the rapidly developing health insurance industry. They kept quality high and costs firmly in the grasp of the rising middle class by building efficiencies across the network and limiting expensive procedures. Having Evans and Powell living as locals in the places they did business made all the difference. “The story of investing in Asia is understanding the barriers to entry,” Evans says. “And it can’t be done,” Baty adds, “unless you’re there.” Time for seniors Following a similar model, Columbia Pacific has finally entered China. “The regulatory system and risk quotient are different there,” Baty says. “But the societal issues are the same as throughout Asia. There’s an enormous emerging middle class and a healthcare system that isn’t keeping up with the demand.” Though the government has just opened the hospital market to foreign investment, Columbia China already has facilities under
22 | Foster Business
Columbia Asia footprint
Columbia China
India Vietnam
Malaysia Indonesia
development in Shanghai, Wuxi, Jiaxing and Changzhou. And even before hospitals were a possibility, the company was already operating in China. Through a joint venture called Cascade Healthcare, Columbia Pacific became the first foreignowned senior care provider in the country four years ago, importing the proven Emeritus model of care and rehabilitation to seniors in Shanghai and Beijing. The quick success has inspired Baty to revisit that original plan to introduce best-in-class residential senior care throughout Asia. “It’s time,” he says. Ringing endorsement There is more, of course. Through Columbia Africa, Baty’s company is testing the waters of healthcare in Kenya. His purchase of Remote Medical International adds a mobile medical service to faraway mining and drilling operations. Zoom out from a map of Columbia Pacific Management’s expanding network—30 healthcare facilities in operation, a dozen more opening soon, and a residential senior care business about to
From hobby to industry
Rick Evans and Matt Powell (right) have managed development of Columbia Pacific’s growing Asia healthcare network.
take off—and a larger strategy becomes obvious: healthcare for the young and old of an exploding middle class in the most densely populated parcel of the world. “We’re a significant healthcare provider for half the world’s population,” Baty says. “We don’t have to go anywhere else. The demand in these countries is going to be enormous over the next 15 years. And we’re already there.” “We have infrastructure and a respected brand,” Powell adds. “And we’ve learned how to take advantage of them.” They’re only getting started. In recent months, Columbia Pacific Management forged game-changing strategic partnerships with two of the world’s most influential investment firms. In July, Tokyo-based Mitsui & Co., one of the world’s largest trading companies, invested $101 million to support expansion of healthcare services through Columbia Asia and Africa. “Talk about a calling card in Asia—or the world,” Baty says. “The Mitsui connection is significant.” In October, Singapore-based Temasek Holdings weighed in with a $250 million investment in Columbia China’s growth. They have the money, the model and a market that is calling their name. “Local governments are aggressively hustling us to come there,” Baty says. “They all want an international-standard hospital in their market to attract other foreign investments.” What’s next Columbia Pacific Management, after so many years, may no longer be the best-kept-secret in Seattle business. Baty takes stock of this development with characteristic quiet satisfaction. “You don’t get that many opportunities—particularly when you’re not science or tech-oriented—to really make a difference,” he says. “And I think we have made a difference, both in providing quality healthcare and in creating unique opportunities for young people.” It’s that talented operational team, after all, that liberates Baty to focus on what really sparks his passion: the intellectual challenge of seeing—and seizing—new business opportunities. “I don’t really run anything,” he admits. “I mean, I’m responsible for how things run. But what I get paid for is knowing what’s going to happen five years from now.” And nobody does it better. n
Dan Baty says that the best word to describe how he got into the wine business is “foolishly.” A group of University of Washington professors had been making wine in the garage of the dean of Arts & Sciences, then loading it into a station wagon each Saturday to deliver to the University Village QFC for sale to the public under the label Associated Vintners. When they outgrew the garage in the 1970s, the state’s proto-vintners asked Baty to help finance and manage the expansion. “I knew nothing about wine,” he recalls. “But I liked the people.” It didn’t take a genius to see the lack of shelf appeal in a bottle of Associated Vintners. So Baty acquired the struggling Columbia Winery in 1980, just as Washington’s viniculture industry was about to go global. He grew Columbia into one of the state’s largest before selling the company but retaining the land and, most importantly, the water rights. In 2003, the Baty family founded Precept Wines, a portfolio of fine local wines that has become the largest privately owned in the region. His favorite? Alder Ridge Cabernet, produced from grapes grown on 900 acres of sumptuous vineyards that roll down to the mighty Columbia River. “But I really don’t know that much about wine and how it’s made,” Baty admits. “I know the business of wine, which is a different thing from most people who own wineries in the state. “I’m from Tacoma,” he adds, laughing. “I drink beer.”
fall / winter 2016 | 23
The Foster Effect Alumni survey measures the magnitude of the UW Foster School’s economic impact How do you take the measure of a business school? You could look to the profusion of rankings and their byzantine combinations of factors that range from employer satisfaction to academic reputation to alumni advancement to return on investment. Or you could consider admissions selectivity. Average SAT and GMAT scores. Job placement rates. Starting salaries. Teacher ratings. Program innovations. Longevity. The Foster School, a fixture among the nation’s upmost echelon, earns high marks in each of these metrics. But the bottom line of any business school is economic impact. Does it spur job growth, catalyze innovation, advance prosperity? Does it create futures? The results of the Foster School’s recent alumni survey calculate a profound impact—on both alumni careers and the economy of the Pacific Northwest and beyond. According to Hemispheres Research, the Seattle-based firm that conducted the survey, the data collected supports two central—and complementary—conclusions: Foster alumni are successful in the business world • Employment rate for recent graduates (2008-2015) is near 100 percent. • More than a third of late career graduates (1946-1979)— and nearly a quarter of all Foster graduates— hold c-level positions.
Foster alumni success is a powerful economic driver • Foster graduates have created an estimated 17,000 companies, 910,000 jobs, and more than $100 billion in annual revenues generated. • More than two-thirds of those companies operate in Washington state. • Nearly one-third of all Foster alumni have started at least one business. • A growing number of—especially MBA—students come to Foster from out of state and remain in the region for the majority of their careers. • Foster alumni transplants have created an estimated 1,283 companies and 68,000 jobs, generating $7.6 billion in revenues for the Washington state economy.
50,000
Alumni (est)
• Nearly half of Foster grads will have served on a corporate board by the end of their careers. • One in five recent graduates have founded a company in the first eight years out. • Alumni overwhelmingly feel that the school prepared them for professional success.
Poor Fair Good Excellent
satisfied customers Alumni rate their overall experience at the Foster School as overwhelmingly positive. And the school’s high marks are consistent across degree type and graduation year.
59%
53%
37%
43%
Total
BA
24 | Foster Business
66%
58%
55%
63%
62%
32%
39%
42%
33%
34%
MBA
Late career graduates (1946-1979)
Mid career graduates (1980-1999)
Early career graduates (2000-2007)
Recent graduates (2008-2015)
ABout this survey More than 2,500 of the school’s nearly 50,000 living alumni participated in the survey, representing every degree program and distributed across four eras. This sample size and distribution are considered statistically reliable within plus-or-minus two points at a 95 percent confidence level.
Companies founded
primary industry
(est.)
Recent graduates (2008-2015) have disproportionately founded retail companies, early career graduates (2000-2007) have tended to found technology or healthcare firms, and mid and late career graduates (1946-1999) have tended to found finance firms.
15,000
*Indicates an industry not listed on the questionnaire, but coded from those who selected “other” and specified that industry.
Foster-educated founders
26% 16%
1.14
12%
8%
7%
6%
3%
5%
2%
2%
Tech. Financial Real Consult.* Retail Healthcare Manu. Construc.* Maritime Hospitality Other service estate*
Average number of firms per founder (still in business)
what we do Foster alumni serve in a variety of job functions. Recent graduates are less likely to serve in accounting and finance positions than older graduates, but are more likely to work in sales and marketing roles, which appear to be emerging professions for Foster grads.
17,100
23%
Companies founded
909,378
13%
22% 15%
10%
5%
Manag. Account. Sales Consult. /Finance /Marketing
Jobs created
IS
3%
3%
15% 2%
Manu. Teaching HR
2% Develp. Other
corporate leadership
Total
Late career graduates (1946-1979) lead the way in corporate board service (46 percent) and company founding (42 percent).
BA MBA
$100.7 billion
22%
Annual revenues generated
21%
23%
Corporate board member
30%
27%
33%
Company founder
Thanks to all the alumni who completed the survey. If you didn’t receive the invitation to participate, we may not have your current email address. Update your contact information at washington.edu/alumni/services/update/ or email us at fans@uw.edu if you’d like to receive news about engaging, alumni-focused academic talks, social events and school updates. fall / winter 2016 | 25
faculty Research briefs
by Ed Kromer
Who’s the fairest?
Queue Tips
Red Board, Blue Board
Online “beauty contest” auctions for IT freelancers may favor hiring locally over offshoring
Accounting for human nature, parallel checkout lines beat single on service speed
The political ideology of corporate directors influences CEO compensation
The online auction has become a favored mechanism of transaction in the emerging “gig economy” for project-based IT services. Professional matchmaking sites such as Upwork, Freelancer and Guru allow a small business in, say, Iowa to hire a developer in Bangladesh, a programmer in Bolivia, a designer in Kenya, an editor in Malaysia. So, is this just-in-time global online labor market just another vector for the outsourcing of American jobs to cheaper overseas markets? Not necessarily, according to research by Hema Yoganarasimhan, an assistant professor of marketing at the Foster School. Yoganarasimhan’s economic modeling of these “beauty contest” auctions—in which hiring firms factor some optimal combination of price, reputation and speed of delivery—indicates that the most efficient and profitable exchange is one that favors more localized hiring. “Freelancers in developed countries tend to charge a premium that businesses are willing to pay for quality and convenience, which translates into higher commissions for the auction sites,” she says. “These auction-based transactions might actually favor workers closer to home.” n
Death, taxes… and waiting in lines. The everyday act of queueing—at the grocery store, bank, café, post office, DMV or TSA security screening—has joined the short list of Most Inevitable Human Experiences. There is a science to queue design. Its consensus has long favored a single-line model serviced by multiple cashiers. But new research by Masha Shunko, an assistant professor of operations management at Foster, indicates that a system of “parallel” queues, each serviced by a dedicated cashier, can provide a more expedient delivery of customer service. The reason for this reversal of the conventional wisdom? Human nature. People, the study shows, work faster when they feel accountable. “Past research has compared single and parallel queues using mathematical models that assume service speed is static,” says Dr. Shunko. “But when we add a behavioral component to the equation, we find that the servers adjust their performance based on the environment they’re working in. They work faster in parallel systems because they have a sense of ownership for their own queue instead of relying on others to work through a lengthy single queue.” n
26 | Foster Business
How much is a CEO worth? The answer to this increasingly debated question is subjective, of course; the product of individual biases. One of the most powerful biases is political ideology. A new study by Abhinav Gupta demonstrates that conservative-leaning boards of directors tend to pay their chief executives more money than liberal-leaning boards pay theirs. Conservative boards also tie CEO pay more closely to firm performance, offering bigger financial rewards after periods of strong earnings or stock returns, and imposing harsher penalties after periods of weak performance—from a higher average baseline. Gupta credits the observed conservative pay premium to a difference in the way that liberals and conservatives view the impact of leaders. “We find evidence that conservative boards are more inclined to believe that the fortunes of an organization hinge on the actions of its CEO, while liberals are more likely to attribute firm performance to social structures, market conditions and broader environmental factors,” says Gupta, an assistant professor of management at Foster. “This higher assessment of CEO impact by conservative directors translates into higher CEO pay.” n
©istock.com/Tomacco, Tatiana54, gemenacom, Carol-Anne, baona, memoriesarecaptured, juanmonio, Stephan_Alfonso
Rest Assured
Inappropriate Appropriation
Tiger Managers
Quality sleep is essential to inspire— and to be inspired
Ethnic brand imagery activates stereotypes—in liberals
Coercing employees to be “good soldiers” can trigger deviant behaviors
Well-rested leaders are more capable of inspiring followers. And well-rested followers are more likely to be inspired by charismatic leaders. That’s the gist of a new study by Chris Barnes, an associate professor of management at Foster. Like other leadership attributes, effective charisma—the ability to genuinely inspire—is dependent on more than a leader’s natural ability to convey positivity and a sense of shared endeavor to followers. Physiological conditions also play a part. Barnes finds that lack of quality sleep undermines both the experience of positive emotion and the regulation of emotion. As a result, sleep-deprived leaders are less inspiring, and sleep-deprived team members are harder to inspire. “Many leaders are sleep-deprived, and often create sleep-depriving conditions for the people they lead,” Barnes says. “Thus, many leaders are sabotaging their own ability to effectively lead their teams. The bottom line is: if you want to inspire, you and the people you lead all need to get a good night’s sleep.” n
Cleveland Indians. Atlanta Braves. Washington Redskins. The names and mascots of these longstanding professional sports franchises are considered politically incorrect at best and, at worst, damaging examples of institutional racism against the Native American peoples whose heritage they appropriate. But are they actually doing harm? A new study co-authored by Mark Forehand finds evidence that Native American sports imagery activates common ethnic stereotypes—though primarily among liberals, whose attitudes tend to be more malleable than those of conservatives. “Our findings suggest that everyday encounters with ethnic brand imagery can influence consumers’ implicit stereotypes, though these effects depend on the political identity of the perceiver,” says Forehand, a professor of marketing and the Pigott Family Professor in Business Administration at the Foster School. “The net effect is that such imagery can carry detrimental societal consequences.” He adds that these findings should extend to all manner of ethnic brand imagery, from Chief Wahoo to Chef Boyardee to Aunt Jemima. n
Convincing employees to go above and beyond the call of duty may be the epitome of personnel management. But pushing too hard to motivate “good soldiers” can backfire—both in and outside the workplace. According to new research by Scott Reynolds, employees who feel compelled to exhibit the admirable qualities of a team player can develop a sense of moral entitlement. This sense of entitlement gives them license to subsequently act badly, both on the job and in the larger world. In other words, compliance leads to deviance. “When employees feel compelled by extrinsic forces—supervisory demands, formal and informal norms, threat of punishment—to engage in organizational citizenship behaviors, we certainly expect to see a negative effect on attitude,” says Reynolds, a professor of business ethics at the Foster School. “And more than that, we find a negative effect on actions. The psychological entitlement resulting from ‘forced’ good behavior is powerful enough to act as a moral credential, freeing us to engage in deviant behaviors that may be unrelated to the good behaviors we’ve been persuaded to exhibit.” n
Interested in reading more about this research? Visit foster.uw.edu/research-briefs
Fall / winter 2016 | 27
faculty
Class of 2016 Foster School welcomes seven promising new faculty members Stephanie Grant Assistant Professor of Accounting Education & Experience • PhD (accounting), University of Illinois at Urbana-Champaign, 2016 • Excellence Ranking by Students, University of Illinois, 2012 • Business/Accounting Department Chair and Instructor, Kaplan University, 2009-2011 • Audit Senior Associate, Deloitte and Touche LLP, 2008-2009 • Intern, Audit and Tax, PricewaterhouseCoopers LLP, 2006-2007 Expertise Financial accounting, judgment and decisionmaking, investor responses to voluntary firm disclosures, management choices regarding content and format of firm disclosures Extracurricular Enjoys running, scuba diving, playing tennis, and weightlifting
Simha Mummalaneni Assistant Professor of Marketing Education & Experience • PhD (marketing), Northwestern University Kellogg School of Management, 2016 • Dissertation explores how affirmative action programs affect online procurement markets Expertise Competitive strategy, digital marketing, auctions, political marketing, structural modeling Extracurricular In high school, competed in tennis and National Academic Quiz Tournaments; has volunteered for a number of political campaigns; once judged an Iron Chef competition at his college dining hall
28 | Foster Business
Daniel Olson Assistant Professor of Management Education & Experience • PhD (strategic management and entrepreneurship), University of Maryland, 2016 • Dissertation on “Wages, Mobility, Competitive Positioning, and the Interaction between Competitive and Social Processes” • Senior Associate in corporate group, Dorsey & Whitney LLP (Salt Lake City), 2005, 2007-2010 • Associate in capital markets group, Morrison & Foerster LLP (New York City), 2005-2007 • Associate in business department, Jenkens & Gilchrist, PC (Austin), 2004-2005 • Admitted to the State Bars of Texas (2004), New York (2007) and Utah (2008) • ACAC Best Paper Award, 2015 • Wharton People Analytics Conference Research Paper Competition, finalist (2015) Expertise Employee entrepreneurship, employee mobility, labor market strategy, social comparison, corporate law Extracurricular Has a JD from Harvard Law School (2004) and a BA in philosophy from Brigham Young University (2000); was articles editor at the Harvard International Law Journal; a native New Yorker and diehard Yankees fan, he nevertheless has a soft spot in his heart for the Mariners and Ken Griffey, Jr.
Kira Schabram Assistant Professor of Management Education & Experience • PhD (business administration), University of British Columbia, Sauder School of Business, 2016
• Dissertation examines the impacts of a professional “calling” on career, compassion and creativity • Academy of Management MSR Interest Group Most Promising Dissertation Award finalist, 2015 • Paul Chwelos Memorial Award for Outstanding Potential for Teaching Excellence, UBC, 2015 • Uma Sharma Graduate Award for Research Quality and Imaginativeness, 2010 • Recipient of a $105K Joseph-Armand Bombardier Doctoral Grant from the Social Sciences and Humanities Research Council of Canada, 2010 Expertise Meaningful work/callings, “dark side” behaviors (deviance, infringement, ostracism), morality at work, trust, dirty work, animals and society Extracurricular Grew up in Germany but lived around the world; speaks German, English, French Afrikaans and is fluent in Latin and American Sign Language (her sister is deaf); a passionate advocate for animal welfare, was awarded 2016 British Columbia SPCA Volunteer of the Year Award
Léa Stern Assistant Professor of Finance Education & Experience • PhD (finance), Syracuse University Whitman School of Management, 2016 • Credit analyst, Bombardier Aerospace, 2006-2007 • Outstanding Paper Award, International Conference on Asia-Pacific Financial Markets, 2012 • Wharton-WRDS Award for Best Paper on Empirical Finance, WFA meetings, 2011 • Bank of Canada Best Paper Award, Northern Finance Association Conference, 2010 • Women in Finance Association Award of Excellence, 2009
• National Bank of Canada Award of Excellence, 2008 • Standard Life-Edouard Montpetit Award of Excellence, 2008 Expertise Empirical corporate finance, corporate governance, directors and officers insurance, private equity, machine learning Extracurricular Educated in France and Montreal; a French wine and healthy cuisine enthusiast who can’t wait to resume practice of Aikido in Seattle
Yao Zeng Assistant Professor of Finance Education & Experience • PhD (economics), Harvard University, 2016 • USC Marshall Trefftzs Award for Best Student Paper, WFA, 2016 • Best Finance Theory Job Market Paper, Finance Theory Group, 2016 • Cubist Systematic Strategies Ph.D. Candidate Award for Outstanding Research, WFA, 2016 • Yihong Xia Best Paper Award, China International Conference in Finance, 2015 • Chiles Foundation Fellowship, Harvard University, 2015 • Derek Bok Certificate of Excellence in Teaching, Harvard University, 2014, 2015 • Distinguished Student of the Nation, Chinese Ministry of Education, 2007 Expertise Financial economics, financial intermediation and markets, corporate and entrepreneurial finance Extracurricular Champion of the Chinese National College Mathematical Modeling Competition in 2005 and the Chinese National Mathematics Olympiad in 2002; plays acoustic guitar and piano; avid in cartography and Chinese calligraphy
Welcome back, deHaan In the academic world, returning as faculty to the school from which you earned your doctorate is no easy maneuver. Yet here— again—is Ed deHaan (PhD 2013), rejoining the UW Foster School Department of Accounting as an assistant professor after three standout years of teaching and research at Stanford University’s Graduate School of Business. DeHaan began his career in audit and consulting at KPMG in the Bay Area, where he helped large corporations, non-profits and multilateral agencies execute sweeping international development projects in places such as Myanmar and Ghana. When he began PhD studies at Foster in 2009, deHaan’s consulting experiences indirectly shaped his initial research into ways corporations seek to influence the media in order to repair their reputation after committing fraud. The study launched deHaan into a fascinating array of investigations centered around a theme of market intermediaries: media, analysts, credit rating agencies, regulators—and how they are improving or detracting from the market. In subsequent papers, he has measured the effect of weather on analyst forecasts, examined the market impact of emerging “robo-journalism” in financial reporting, and documented the consequences on SEC enforcement of high turnover among the commission’s pool of trial lawyers. And while his award-winning work has been published in the top accounting journals and cited frequently in the popular press, deHaan has found as much success in the classroom. At Foster, he earned the PhD Teaching Award in 2011. At Stanford, he was a Shanahan Faculty Fellow and two-time winner of the MSx Distinguished Teaching Excellence Award for his contributions to its high-profile program for experienced global leaders. DeHaan sees the dual roles of the modern academic as symbiotic, if not always complementary. “My job as a researcher feels at times quite different from my job as an instructor,” says deHaan, who is teaching financial accounting in the MBA core this fall at Foster. “But I have to bring the two together in order to keep my students engaged and to make my classes relevant. I take a lot of ideas from the classroom to inform my research. And we talk a lot in my class about information asymmetries and how information flows from companies to users and how users interpret that information, which is a big theme in my research. I find that the interplay keeps things a lot more exciting for students and for me. And it’s what gives us value as an educational institution.”
Ed deHaan Assistant Professor of Accounting Education & Experience • PhD (accounting), University of Washington Foster School of Business, 2013 • Assistant Professor, Stanford University Graduate School of Business, 2013-2016 • MSx Distinguished Teaching Excellence Award, Stanford GSB, 2014, 2016 • Shanahan Faculty Fellow, Stanford University GSB, 2014-15 • PhD Teaching Award, UW Foster School, 2011 • Certified Public Accountant (inactive), California, 2004 • Worked in audit and consulting, KPMG, 2004-2008 Expertise Investor relations, voluntary disclosures, SEC enforcement, governance, market intermediaries Extracurricular: Has traveled (for work and pleasure) to more than 40 countries, most recently China, South Africa, Vietnam, and India fall / winter 2016 | 29
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Honor Roll Foster faculty have been recognized in 2016 at the university, national and international levels Who What Why it matters Outstanding Reviewer Award, Academy of Management Journal
The prolific Barnes, expert on the effects of fatigue in the workplace, receives an award for his judgment of other scholars’ contributions, from the principal journal in the field of management.
Brattle Group Prize in Corporate Finance, American Finance Association
The preeminent association in finance deems Bond’s 2015 paper—analyzing the utility of Wall Street’s lavish compensation packages—most exceptional in corporate finance. Bond is also co-editor of the Journal of Finance and president of the Finance Theory Group.
Emerald Citations of Excellence Award, Emerald Publishing Group
Chen’s 2013 paper demystifying the Chinese system of “Guanxi”—social networks and influential relationships that regulate business—is one of the most cited papers across all business disciplines.
PACCAR Award for Excellence in Teaching, Foster School of Business
Foster MBAs selected Dewenter as the 16th winner of the school’s highest teaching honor, established in 1998 by PACCAR Inc.
Ryan Fehr Assistant Professor of Management
Ascendant Scholar Award, Western Academy of Management
The west coast affiliate of the Academy of Management names Fehr among a handful of young b-school scholars who have demonstrated an exemplary record of research, teaching and service—and even greater potential.
Thomas Gilbert Assistant Professor of Finance
40 Under 40 Most Outstanding MBA Professors, Poets & Quants
Gilbert, past winner of the PACCAR Award for Excellence in Teaching, has been recognized as one of the 40 best young MBA instructors in the world—by the world’s most influential MBA news site.
Jarrad Harford Professor of Finance
Outstanding Paper in Corporate Finance, Southern Finance Association
Harford’s paper finding that long-term investors improve corporate decisionmaking earned top honors from the SFA and from the International Center for Pensions Management.
Chris Barnes Associate Professor of Management Evert McCabe Endowed Faculty Fellow
Philip Bond Professor of Finance and Business Economics Edward E. Carlson Distinguished Professor in Business Administration
Xiao-Ping Chen Professor of Management Philip M. Condit Endowed Chair in Business Administration
Kathryn Dewenter Associated Professor of Finance Joshua Green Family Endowed Professor
Paul Pigott-PACCAR Professor in Business Administration
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Who What Why it matters Charles Hill Professor of Management and Organization
Favorite MBA Professors, Poets & Quants
The essential MBA news site counts Hill— recipient of the Foster School’s Charles E. Summer Outstanding Teaching Award this year—among the most inspiring, innovative and indelible business educators in the world today.
Fellow, Financial Management Association
With his election, Karpoff joins a select company of giants in the field of finance that includes Nobel Prize winners Robert Engle, Merton Miller and William Sharpe, and Eugene Fama, the “father of modern finance.”
Distinguished Service Award, Academy of Management
The preeminent management association pays tribute to the indelible career contributions of Lee: 90 papers published in top journals; co-author of seminal job embeddedness theory; past president of the Academy of Management; former editor of the Academy of Management Journal.
Editor, The Accounting Review
A career of exemplary scholarship earns Matsumoto a position of editorial leadership at the premier journal in the field of accounting.
Emerald Citations of Excellence Award, Emerald Publishing Group
Palmatier’s 2013 paper introducing the notion of corporate relationship velocity is one of the most-cited papers across all business disciplines. The Buzzell Award recognizes his significant contribution to marketing practice and thought.
Hughes M. and Katherine G. Blake Endowed Professor in Business Administration
Jonathan Karpoff Professor of Finance Washington Mutual Endowed Chair in Innovation
Tom Lee Professor of Management Hughes M. Blake Endowed Professor of Management
Dawn Matsumoto Professor of Accounting Gerhard G. Mueller Endowed Professor in Accounting
Rob Palmatier Professor of Marketing John C. Narver Endowed Professor in Business Administration
Oliver Rutz Associate Professor of Marketing
Robert D. Buzzell Award, Marketing Science Institute William F. O’Dell Award, American Marketing Association
The foremost association in marketing recognizes the significant and lasting contribution of Rutz’s 2011 paper on Internet search behavior, and the value of paid search advertising.
Favorite MBA Professors, Poets & Quants
The essential MBA news site counts Young— past winner of the PACCAR Award and professor-of-the-year distinction in nearly every Foster School program—among the most inspiring, innovative and indelible business educators in the world today.
Marion B. Ingersoll Professor
Lance Young Senior Lecturer of Finance and Business Economics
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Growth Notes Behind the scenes at Jeff Shulman’s “Seattle Growth Podcast” Seattle is growing at a clip not seen since the Gold Rush. This growth is inducing enormous change on the city—as well as strong feelings and polarized opinions about how to address those changes. Jeff Shulman, an associate professor of marketing at the Foster School, decided to investigate the issues by interviewing more than 100 Seattleites: from renters, home owners and the homeless to civic, corporate and cultural leaders. From these conversations he produced the “Seattle Growth Podcast.” The 13-episode series explores how each aspect of the city’s transformation affects everyone who lives in the region. The podcast has filled a need—and touched a nerve. The weekly series has attracted more than 25,000 downloads and inspired a live show in October. Foster Business recently sat down with Shulman to learn more about the project. FB: What possessed you to pursue this project?
Shulman: Like many people in Seattle, I moved here for a job. I came to the UW ten years ago and lived in South Lake Union until four years ago. When I go back to my old neighborhood now, it’s completely unrecognizable. Things are changing so fast. And I wondered, how is the city responding to this growth and change? Why did you decide to go with the podcast format?
I feel like we’re at an inflection point in Seattle, and it’s not clear what the city will become. Unfortunately, growth often produces polarizing conversations. So I wanted to facilitate a constructive dialog in which both sides of the issues could be discussed in depth, rather than in soundbites. I thought a podcast would allow people to express and hear longform points of view. Then, we could better understand the challenges that everyone’s facing so we can begin working together to solve them. 32 | Foster Business
Jeff Shulman and Seattle Fire Chief Harold Scoggins talk about growth in Seattle for Shulman’s podcast
How did the project get started?
I bought some recording equipment and took it into a neighborhood bar in the U District where I asked some people to talk to me about how Seattle’s growth is affecting them. Then I asked people waiting at the Tesla dealership and got different perspectives. I thought, I’m on to something. This gave me confidence to pursue interviews with key decision-makers in the city, too. As I interviewed all of these people, some key issues emerged: schools, transportation, housing affordability, homelessness, healthcare, emergency services, the city’s character. So I decided to organize the interviews into 13 topical episodes. How did you manage this with your day job as a professor? Did you take time off?
Let’s just say that spring quarter (when I did most of the interviews) was really busy. I didn’t have to teach, but I did submit six articles for publication. Was your background in academic research at all helpful?
There is a process to academic inquiry— where you seek both sides of an issue and
really explore carefully rather than casually. And I think that translates fairly well to this project. How would you describe your interviewing style?
As host, I try to stay as fly-on-the-wall as possible. I want to let my guests shine through, and that’s why I have included entire conversations. I want listeners to hear their words, not mine. I want people to form their own opinions. What do you hope will come from the podcast?
I hope that people listen and really think about these issues from multiple perspectives so they become better informed. Then when it’s time to take action, they’ll think about the long-term payoff for the community. I’m also hoping to build a bridge between the Foster School and not just the business community, but the Seattle community at large. We’ve got a lot of brilliant people here. Having interacted with many of the city’s leaders, I think Foster can help tackle some of the city’s biggest challenges. n Find the podcast at seattlegrowthpodcast.com.
alumni
Sound barrier Ex-Navy fighter pilot Ben Forrest now earns his living muting noise, not making it Business took off. Forrest and his growing company developed custom acoustic solutions for firms such as BP Oil, United Technologies and GlaxoSmithKline.
The Garvey Family Atrium in PACCAR Hall is an architectural marvel, a modern descendent of the vaulted cathedrals and majestic rail stations of yesteryear. But unlike those ancient echoing chambers of humanity, the tone and timbre inside the Foster School’s central hub is… pleasant. Intelligible. You can have an intimate conversation, no matter the crowd. For this, we have Ben Forrest (BA 1972) to thank. His company, Forrest Sound Products, installed the elegant acoustical walls and ceilings throughout PACCAR and Dempsey Halls—a stateof-the-art envelope of sound absorption backing pristine strips of Douglas fir. This first major architectural project for Forrest was also a treasured return to his alma mater. “That was the old Business School,” he says. “Before you built these beautiful buildings.” To fly To Forrest the UW was, initially, a route to the Navy. The annual Seafair airshow had stirred in him profound aspirations of becoming a fighter pilot like the Blue Angels that rocketed over his childhood home in Bellevue. “My dream was to fly the F-4 Phantom,” he says.
Forrest did just that, piloting combat missions at the end of the Vietnam War, and later instructing pilots in the F-14 Tomcat. During eight years of active duty, he flew from 13 different aircraft carriers, an exacting feat of pure adrenaline and extreme concentration. A long career as a commercial pilot followed, the last 16 years flying for Alaska Airlines. Forrest says he relished every minute of his 28,000 hours in the cockpit: “Flying the F-4 and F-14 was incredibly exhilarating. But I had the same satisfaction flying a 737 full of people to Maui or landing on a challenging airstrip up in Alaska.” The entrepreneur awakens Late in Forrest’s aviation career, a dormant entrepreneur awoke inside. While doing some work with a firm making acoustical products for aircraft, he decided to follow his brother, a consultant to paper mills and sewage treatment plants, to see if he could drum up some industrial noise and reverberation abatement contracts. And so Forrest Sound was born. The founder learned the physics and the business on the fly. “I literally started in my living room with a pen and pad of paper,” he says. His timing was impeccable. Government regulators were cracking down on exposure to the rattle and roar of heavy industry.
Architectural by design And then came PACCAR Hall. “That was our first big, public, visible architectural project,” Forrest says. “We really hung it out there to win that contract. But our guys knocked it out of the park.” The PACCAR grand slam launched a new architectural business, opening doors to clientele that ranges from Sea-Tac Airport to Seattle Children’s Theater, Boeing to The Bravern, Microsoft to the Magnolia Library. Forrest and business partner Doug Bixel also have developed innovative acoustical materials. The latest is F-Sorb, an acoustical polyester that is safer, cheaper and more effective than fiberglass—and as smooth and paintable as drywall. Under a separate company called Nutshell, they are selling this patented material to acoustics companies around the world. HUSH now F-Sorb is the secret in Forrest’s latest spinoff: HUSH Curtain, a flexible and noninvasive solution to the cacophony of the busy emergency room. He transformed the standard hospital curtain into an articulated baffle. Each pocket is stashed with F-Sorb to significantly deaden the ER clamor. HUSH is already a $3 million business. And it’s only getting started. Word is out that Forrest & Co. have a solution to any acoustical challenge. His secret? Creating an environment of safety— born of the life-and-death choreography on the carrier flight deck—and innovation. And listening, to customers and employees. “We’re always thinking of a better and safer way to do things,” Forrest says. “When somebody has a good idea, we give them credit—and make sure that everyone hears about it.” Sound acoustics, indeed. n – Ed Kromer Fall / winter 2016 | 33
alumni
Open to ideas CEO of Japan Exchange Group Akira Kiyota is looking at the big picture Akira Kiyota (MBA 1974) has a lot of art in his Tokyo office. One image: a volcano of thickly smeared paint, all deep blue sky and fiery orange lava. Another: a dreamy pointillist city scene, tiny dots outlining a woman on the riverbank. He even has an etched print by Leonard Foujita, a Japanese artist famous for studying Western ideas and blending them with Japanese sensibilities. Kiyota’s office is a lofty one, lined not only with artwork but with views across downtown Tokyo and the popular “Rainbow Bridge,” a skyline favorite. He’s the CEO of Japan Exchange Group, the parent company of several stock exchanges, including the Tokyo Stock Exchange. Over the course of his career, Kiyota worked his way up from an entrylevel job at Daiwa Securities to chairman of the board, then on to president of the Tokyo Stock Exchange, now CEO of the exchange group. New ideas, lasting impact He only mentioned in passing that he likes to collect art for his office. But it’s clear that, like Foujita, Kiyota has an appreciation for the broader art of seeing new perspectives. He recalls many ideas he encountered at the UW that forever altered his viewpoint. For instance: the use of case studies and debate in classes, a departure from the textbook memorization he was used to, and which he credits with helping him organize and articulate his positions. Or the net present value method for valuing companies, an approach he took back to Japan and used to create a highly profitable investment product. “Many things at UW were ‘firsts’ for me,” says Kiyota. “Those experiences were very useful.” Kiyota grew up in a big family in post-war Japan. Each stage of his life was a step into a new territory with a wider lens. He spent his earliest years in his parents’ home village of Kumamoto, then school years in the bigger city of Fukuoka, and on to Tokyo for university.
34 | Foster Business
He got his first job at Daiwa after walking into the securities firm’s headquarters without an appointment, looking to kill time before an interview with another firm. “My parents had invested in securities so I knew the name Daiwa. A young staff member from HR came out to talk with me, and I got an offer that afternoon,” he recalls. Later, Kiyota left to do an MBA at UW on the advice of an American colleague, then returned to Daiwa, where he steadily climbed the ranks. Leading reforms Kiyota’s habit for collecting and applying outside ideas is now directed at Japanese corporate governance, an area where he advocates for change. After a staggering 25-year downturn in the stock market, Japanese authorities are on a mission to exit deflation. Prime Minister Shinzo Abe has specifically called for structural reform —like corporate governance—as a crucial arm of his comprehensive Abenomics program. Kiyota has been a leader in promoting such reform. “The exchange must do its part to cooperate with the government and central bank to recover the economy. It’s incredibly important,” says Kiyota. One example of reform: the growing practice of including outside directors on the board, standard in the US but not historically common in Japan. It’s just one of many changes underway, says Kiyota. The exchange of ideas doesn’t only go West to East. Kiyota also has fond memories of bringing Japanese traditions to Seattle, including the summer that he and several other Japanese students built a wooden tower called a yagura on campus
and hosted a Japanese music festival. “It’s a lifetime memory for me, playing Japanese folk songs, like the Lullaby of Takeda, with two friends on a guitar,” Kiyota says. Still looking Outside Kiyota’s office window, the Tokyo skyline is peppered with construction cranes. Inside the office, too, the pace of change is unrelenting—new technology has transformed the securities industry over the course of Kiyota’s career. Nowadays, Kiyota has his eye on FinTech, the trend of startups that use software to take over service functions in the financial industry. “I’m not a specialist of information technology, but I’m very interested in how FinTech is leading to new business models. I believe it has a lot of potential for the future,” says Kiyota. Sounds like he’s still collecting new ideas. n – Carolyn Marsh
waste not Lani Aviado is passionate about reducing the environmental footprint of business evening program. That’s a reflection on my classmates—the experience and perspective they brought.”
Have you ever thought of living off the grid in Hawaii as a battery tester in a home that produces more energy than it consumes? That’s the dream of Lani Aviado (MBA 2008)—after she’s done solving the world’s waste issues (or at least those of a number of large corporations), that is. For Aviado, a senior manager at the environmental consulting firm Ecova, the path to this dream is circuitous. She was a single mother when she graduated from Seattle University with a communications degree and embarked on a decade-long stint in non-profits, among them World Vision, the King County Rape Crisis Center and the Asian Consulting Referral Service. “I’ve always been passionate about supporting those in need,” she says. When deciding to take her career to the next level, a mentor advised her to choose an MBA over an MPA (Master of Public Administration) to expand her options. It worked almost immediately. During the first quarter of her Foster Evening MBA Program, T-Mobile hired her as a project manager.
Going corporate Her eventual layoff from T-Mobile, though painful, led her to Ecova (then called Ecos IQ). The company had been created to manage utility bills for large companies. “We began by helping them find savings through bill consolidation or other means,” Aviado says. “Pretty soon, we were making suggestions on how they could save even more by converting to other types of energy.” Eventually, the company evolved into an environmental management firm. In 2010, she joined the utilities division and ran the retail marketing team. She was later promoted to senior manager before taking a couple of “wonderful and isolating” years to work for Microsoft in Germany. Back at Ecova, Aviado became a senior manager in the waste solutions division, where she manages 60+ employees and a $3 million budget. The Foster MBA, she says, helped her approach business problems differently: “The seasoning in leadership that it provided is more than I expected from an
Sustainable leadership Aviado exudes passion about sustainability and the environment that is positively contagious. You get the feeling she is doing exactly what she was meant to do. She believes that Ecova’s leadership, in partnering with large corporations to achieve business goals around sustainability, is bringing the field of environmental consulting to a tipping point. More firms in the market mean more companies reducing their environmental impact. When asked what else she wants to accomplish, Aviado is quick to answer: “I want to run this company someday—or one like it. I value having a seat at the table.” She has other motivations, too. “I want to show other women in the organization that there’s a path to the top, that it’s possible to get there if you really want it,” she adds. Lifelong learning In service to her own professional and personal ambitions, Aviado is a voracious lifelong learner. She even adopts a new hobby every year. One year it was cultivating orchids. Another year it was learning everything about football and becoming a serious Seahawks fan. This year her theme is “face your fears.” So far, this challenge has manifested itself in the frightening acts of bungee jumping, skydiving and a stay in a haunted house. Learning to ski and play the cello remain on her bucket list. And so does that distant dream of a halcyon existence in Hawaii in an eco-home that is beyond sustainable. It would make a fitting conclusion to a life spent fighting waste. n – Sarah Massey
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Everyone Leads In the halls of state government, Michael DeAngelo experiments in extreme empowerment
State government—that bastion of bureaucracy—might be the last place you’d expect to find a radical experiment in organizational structure. Yet it’s happening. Inside a division of WaTech, the state of Washington’s technology solutions organization, Michael DeAngelo (MBA 2005) is transforming the workplace into a self-managing system more fluid and agile than a hierarchy could ever hope to perform. DeAngelo is the state’s deputy chief information officer (or, at least, that’s what his business card says). Within his division of e-gov, though, he has no title. Instead, he has roles, which change by the project, same as every employee who used to report to him. By ceding authority to the collective, DeAngelo is creating a culture of what you might call “extreme empowerment.” Without the conventional—even habitual— command-and-control structure, teams prioritize what to do on their own. “Individuals, while filling a role, are completely empowered to do whatever they need to in order to achieve the purpose of that role,” he says. “They don’t have to ask permission.” Sound maybe a bit too laissez-faire? It did to DeAngelo, too. 36 | Foster Business
Change in management With a background in computer science, DeAngelo began his career managing technology at the US Geological Survey and leading e-commerce and IT services at the Walt Disney Company. He enrolled in the Foster School’s Executive MBA Program in 2003 to help him “bridge the gap between technology and business.” It paid off quickly. After graduation, DeAngelo served as CIO at Health Care Authority and Washington’s Department of Fish and Wildlife before being poached by the state’s new CIO to develop a strategic vision for technology across the reach of government. Shortly after joining the office charged with driving innovation across state government, DeAngelo recognized an enormous challenge: attracting and retaining top tech talent in the land of Microsoft, Amazon and Google. “Our value proposition—longevity and good benefits—just isn’t that compelling anymore,” he says. “What we do have is mission. But if purpose can draw people to state government, the environment here is not empowering them to achieve the difference they came here to make. “We needed a culture that serves this sense of purpose.” Holacracy now While searching for the solution, DeAngelo happened upon a provocative model of self-management called “Holacracy.” He was dubious at first. But his research revealed that organizations such as
Zappos, Valve, Spotify and ING were adopting similar self-managing “operating systems.” And he came to suspect that a model of distributed authority might just be his path to employee empowerment. DeAngelo began beta testing this system last year in the office of the CIO. And by measures of decision making, empowerment and employee feedback, it was a quick success. Average time to identify, discuss and resolve operational issues was reduced from 20 to two minutes. Employee-reported empowerment scores jumped 40 percent. “I thought I was a fairly empowering leader,” DeAngelo says. “But turning my authority into the system is more empowering than I could ever be.” Expanding the scope In January, the WaTech pilot project became a year-long scientific experiment. The self-organization test group has expanded to 100 employees of DeAngelo’s innovative tech solutions division. A control group continues doing business as usual. Preliminary results indicate that the advances in empowerment and decision-making from DeAngelo’s pilot program are extending to the larger application in e-gov. The project has even been honored by the National Association of State CIOs. As for the future? “I’m not trying to change all of state government,” DeAngelo says. “We’re approaching this as an experiment to test different organizational systems and potentially solve our problem of hiring and retaining top tech workers.” But he does hope to address a larger challenge: the wide-scale opinion that government is anything but innovative and agile. “Our brand is bureaucracy,” he adds. “I want to begin changing this perception. I’d love to have people say, in ten years, that you should look to government to see something innovative.” n – Ed Kromer
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