Foster Business Magazine Spring 2015

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Michael G. Foster school of business University of washington spring 2015

business VeterAns wAY A growing company of armed forces vets is choosing the Foster School to transition from military to corporate careers, and the benefits go both ways

page 10 Plus: Inheritance page 16 The Effective Networker page 20


financial risk






investment Buy






James Jiambalvo

Associate Dean of Advancement Steven Hatting

Managing Director Marketing & Communications


Veterans Way A growing company of armed forces vets is choosing the Foster School to transition from military to corporate careers, and the benefits go both ways

Web Redesign, Wine Forum, Undergraduate Leadership Retreat, UW Impact, Business Leadership Celebration, Alumni Picnic, Environmental Innovation Challenge, Global Goes Global, Business of Gaming, Lending Local, Case Competition Wins

In a series of pioneering studies, Stephan Siegel has identified a powerful genetic component behind a lifetime of financial behavior

Eric Nobis

Managing Editor Renate Kroll

Contributing Writers Chas Holden, Ed Kromer, Andrew Krueger

Photography Matt Hagen (principal), Paul Gibson, Cory Parris, Sandra Tenuto, David Wentworth

Design a.k.a. design

Foster School of Business Marketing & Communications University of Washington Box 353200 Seattle, WA 98195-3200 206.543.5102



business Dean

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On the Web



Great Reads: Personal Finance, Research Briefs, Serious Money


Foster Business is published twice a year by the University of Washington Foster School of Business. The publication is made possible by donations from alumni and friends. No state funds are used in its production.

Change of Address?


The Effective Networker

Christina Fong shares the secrets to better networking


Alumni Charlie Hogan, Heidi Otto, AJ Maestas & Lacey Bundy, Melanie Stambaugh

from the dean In 1914, then University of Washington President Henry Landes wrote, “To my mind we have been overlooking a very important matter, namely a business training of high character for our young men.” He went on to write that the university’s aspiration was to “educate men for leadership in business and at the same time, make it possible for our graduates to go directly into useful positions.” Three years later, the university established the School of Business Administration, to educate both men and women. In the years that followed, the name was changed to the College of Business Administration, the College of Economics and Business Administration, back to the College of Business Administration, the School of Business Administration, the Business School, and finally to our current name, the Foster School of Business. In each instance, past and present, we are the place where “business” meets “school” in Seattle and the Pacific Northwest. While iterations of the school’s name are a significant part of our history, it’s the people—our alumni, faculty, students, staff, business partners—that are our legacy. For instance, “Economics” was dropped from the school’s name in the 1940s after years of deep divide between the business faculty and economics faculty, eventually resulting in the Department of Economics returning to the College of Arts & Sciences. Sound interesting? If so, you’ll find it even more so when you learn about the people involved. In the letters, reports and articles unearthed in 1987 by a graduate student in the Department of History, the acknowledged leader of the economists was deemed by one observer of the strife to be “ruthless” and “clever” in his attempt to “sabotage the good name” of the college. In the end, the business faculty had come to the conclusion that separation was in their best interest as well. Donald Mackenzie, who co-chaired the committee assigned to explore the issue, called the economists’ approach to teaching business “out-moded” and noted that economics was “only one small part of the field and probably of less importance than psychology.” Thankfully we’ve not seen a schism like that since I joined the UW in 1978. My time here has been marked by tremendously exciting chapters in our history, from the launch of our three work-compatible MBA programs, to the opening of PACCAR and Dempsey Halls, to the renaming of the school in recognition of the contributions made by the Foster Foundation. I’ve also had the good fortune of teaching thousands of you and working alongside hundreds of stellar faculty.

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It is my hope that the pages of this magazine bring to life some of the school’s myriad success stories—stories that are unfolding every day. In this issue, you’ll see the work being done by finance professor Stephan Siegel to better understand how we make investment choices, and learn about the increasing number of veterans choosing our programs to transition to corporate careers. You’ll read about an alumnus who has mastered the realm of real estate development, and an alumna who recently became one of the youngest elected officials in our state. You’ll read about student competitions and investments from our corporate partners. As we get closer to our centennial in 2017, we’ll be in touch with the hope that you’ll share your stories with us through words, pictures and videos. Until then, I hope you find common threads in the stories we’re telling.

James Jiambalvo Dean, Michael G. Foster School of Business Kirby L. Cramer Chair in Business Administration





Have you ever had that dream


where you missed a test or can’t find your class? Now imagine missing a campus breakfast with the COO of Microsoft, a behind-the-scenes tour of the Smithsonian’s Museum of Natural History, or Professor Michael Johnson’s decision-making bias session in Hong Kong…just a few of Noel

our spring offerings to alums. Our recent memento mailing identified more than 1,000 lost graduates. Please visit to see the names of classmates you can help find. It’s our dream to reach every grad with information, invitations and our comprehensive alumni survey next year! Want to connect? Email us at

Alex, Megan, Krista, Andrew and Noel Your UW Foster Alumni Engagement Team


Web Redesign Have you noticed our new Foster website? The newly redesigned website debuted in April and features a lighter, responsive design, improved navigation, robust calendar views and tools, and better blog integration. If you haven’t already, check it out at! We’d love to hear your feedback; just click the “feedback” link on the bottom of any page.

In Vino Veritas On March 25, Foster alums packed Anthony’s Forum for Taste of Foster: The Business of Wine. The event featured wine tasting and a panel discussion led by Paul Zitarelli (MBA 2009) of Full Pull Wines and featuring John Blair (MBA 2011) of Dunham Cellars, Angela Jacob (MBA 2010) of WineGirl Wines and Bryan Maletis (EMBA 2010) of Fat Cork. Washington wine facts:

Washington state’s wine grape harvest totaled

227,000 tons in 2014

White varieties in 2014 slightly outnumbered red,

53 to 47 percent

Washington state currently has more than 850 licensed wineries, compared to 19 wineries in 1981

4 | Foster Business

Where the Elite Meet to Lead Undergraduate leadership retreat develops Foster’s best and brightest The word “retreat” suggests backward motion, withdrawal or reflection. That’s not the case with the Presidents’ Leadership Retreat. The annual summit of the Foster School’s premier undergraduate leaders keeps the focus firmly on the future. Over two jam-packed early autumn days at Warm Beach Conference Center, the prime movers of the Undergraduate Business Council and 25 other student organizations undergo a distraction-free crash course in communication, collaboration, cultural competency, decision making, event planning, conflict resolution and, as last year’s keynote emphasized, staying true to the Foster ideals of honesty, integrity and respect throughout life. The participants emerge equipped and inspired to lead more effectively at, and after, Foster. “This year’s retreat gave all of us a real sense of what it means to be a leader within the Foster School,” says Kelly Phillips, president of Undergraduate Women in Business. “It has inspired me daily to be a great leader.” This indelible experience—in its 12th year—is made possible by the financial underwriting of Roy (MBA 1970) and Frances Simperman, who know a thing or two about leadership. Roy is the longtime chairman and CEO of a computer network management firm called Semaphore Corporation, but an engineer at heart. He got his start at the Boeing Company in the mid-1960s, an era of grand adventures developing a space shuttle prototype, the lunar orbiter, and warhead integration (borrowing a 105-mm tank from the US Army and commandeering 15 oscilloscopes from Boeing to study shock physics on the site now occupied by the Tulalip Casino). After adding a Foster MBA to his degrees in mathematics and physics, he created a sophisticated economic simulation to guide Weyerhauser’s forestry program, partnered in a stock photography company at the dawn of the commercial Internet, and has led Semaphore ever since. Roy and Frances, who served as president of Printex Press for three decades, have become staunch supporters of education, and keenly interested in the development of Foster’s emerging leaders. “Leadership requires trust,” Roy says. “And trust requires integrity, good judgment and common sense. I think a program that can intervene and instill these qualities is well worth our support.”

Want to read this and previous issues on your computer, tablet, laptop or phone? Search for the new Foster Biz app in the App Store, Google Play Store and Amazon Appstore.

by the numbers

UW has a big annual impact on the Washington state economy:


billion in total economic impact generated by the UW in the state of Washington.


million in tax revenue to state and local governments, including sales, property and business tax payments.


million to local charitable organizations in 2013–2014 contributed by UW employees and students.


The UW is the third-largest non-federal employer in the state of Washington. The UW supports 79,331 jobs across the state, including 45,330 related to UW Medicine.

Frances and Roy Simperman

SPRING 2015 | 5 Spring


Whistle While You Lead Business Leadership Celebration honors remarkable alumni, sings a Disney tune Living, a network of assisted living and retirement communities in 45 states. Today he’s principal of Columbia Pacific Group, a private equity and wealth management company he founded more than 30 years ago. “Suggested speaking topics tonight were impact of the business school, and lessons learned in 43 years of business.” Baty said. “My immediate response to both of these was: relationships. And many started as an undergrad at the University of Washington.”

The Foster School welcomed the CEO of Disney and honored three remarkable leaders at its 23rd annual Business Leadership Celebration at Bellevue’s Meydenbauer Center in October. Keynote speaker Robert A. Iger, chairman and CEO of the Walt Disney Company, shared his essential traits of a great leader: curious, optimistic, focused, fair, thoughtful, decisive, risk-taking, courageous, innovative, and a perfectionist to boot. He also touched on the enormous risk that Walt Disney took to bring “Snow White” to the big screen, noted Disney’s successful acquisitions of Pixar, Marvel and Lucasfilm, and celebrated its historically successful first animated feature directed by a woman—Jennifer Lee’s “Frozen”—and historic construction of the company’s largest castle yet for Disneyland Shanghai. “I’m often asked what I think Walt Disney would think of the company

6 | Foster Business

today,” Iger said. “I think he’d be unbelievably proud. We’ve managed, after 91 years, to continue to be relevant to a world that doesn’t look anything like the world that existed either when Walt founded the company in 1923 or when he died in 1966. And we’ve done so without compromising the values that Walt put into everything that was Disney: notions of optimism and inclusiveness, universally appealing stories that touch people’s hearts.” Disney famously said that “if you can dream it, you can do it.” No one embodies this notion better than the three recipients of the Foster School’s 2014 Distinguished Leadership Awards. The healthcare entrepreneur Dan Baty (BA 1965) is a life-long entrepreneur who has catalyzed successful ventures in international healthcare, wine and wealth management. After growing a small chain of nursing homes in his early career, Baty co-founded Emeritus Senior

The pioneering academic Nancy Jacob (BA 1967) became the first female dean of a major American business school when she was appointed to lead the Foster School in 1981. The school’s Executive MBA Program launched during her tenure. After retirement from the UW— where she was the first female full professor of finance—Jacob founded NLJ Advisors and Windermere Investment Associates and established a successful second career in the financial services industry. Jacob remarked on the dearth of women in finance at the beginning of her pioneering career and the ongoing challenges for women in traditionally male fields. “We make a big deal of the glass ceiling for women executives in their careers,” she said. “But that’s misleading because life is not a vertical climb. It’s a multidimensional trip. It doesn’t come with an easy button or a fair button. But when one door closes, another opens. You have to be flexible and you have to be willing to deal with adversity.” The city-defining developer Kemper Freeman, Jr. (UW 1963) is the chairman and CEO of Kemper Development Company, the driving force behind

DID YOU KNoW? MBA reunions for 1990, 1995, 2000, 2005 and 2010 are being held in September this year.

Bellevue Square, Bellevue Place and Lincoln Square—four million square feet of award-winning mixed-use real estate. Freeman studied economics and political science at the UW and pursued careers in farming, radio, banking, real estate, and even a stint in the state legislature before joining the family business that has reshaped the city of Bellevue. Freeman shared his family’s philosophy of devoting 30 percent of waking hours to the community, saying that the “absence or presence of private-sector leadership within a community makes or breaks that community.” He also credited the amazing diversity of successful local companies—Boeing, Microsoft, Costco, Amazon, Nordstrom, PACCAR, to name a few—as well as the Foster School with making this a golden age for the region’s economy. “There’s so much bad news,” Freeman said. “But if this isn’t Seattle and Bellevue and the Northwest’s best time of all, I don’t know what it is.” Net proceeds from the Business Leadership Celebration—more than $100,000—support scholarships and help create futures at the Foster School.


June 27

4-6:30 p.m. classic carnival games&prizes ice cream cart caricaturist

Live CounTry Band JessiCa Lynne & The Cousins

BBQ Cask & TroTTer 21+ Beer Garden Fremont BrewinG

$10 Ages 12 And under Are free register online at picnic

Innovation Takes Flight Alaska Airlines sponsors Environmental Innovation Challenge

Dan Baty, Dean Jim Jiambalvo, Nancy Jacob, and Kemper Freeman at the 2014 UW Foster School Business Leadership Celebration.

On April 2nd, the UW Environmental Innovation Challenge held its annual competition, this time under a new name. Alaska Airlines has agreed to sponsor the competition for the next 10 years, a commitment that includes a reduced travel rate for out-of-state teams and judges, and hosting the challenge at the Seattle Center House. “As a proud supporter of the University of Washington and an industry leader in environmental stewardship, we’re thrilled to support the next generation of innovators whose ideas and concepts will no doubt improve our communities for years to come,” says Joe Sprague, senior vice president of communications and external relations for Alaska Airlines.

Spring 2015 | 7


Global Goes Global Long-time Foster case competition exports inspiration around the world Every year the Foster School’s Global Business Case Competition (GBCC) welcomes the world. Bangladesh and Brazil. Egypt and Estonia. Israel and Italy. Jamaica and Japan. Korea and Kuwait. Pakistan and Peru. Serbia and Singapore. Uganda and the United Kingdom. In all, 52 nations have sent their best and brightest undergraduate business students to match wits in the GBCC since its 1999 launch. Now this long-time importer of competitors is exporting inspiration. The GBCC has sparked and informed the founding of kindred competitions in Portugal, New Zealand, Belgium, Sudan and Colombia. After bringing a team from the University of Auckland to Seattle for its first international experience in 2004, student development and engagement manager Brendon Potter was moved to action. “Because of that invitation to the GBCC, we have established a significant case program of our own,” says Potter. “And it was the motivation to instigate our own Champions Trophy Case Competition in 2008.” Renata Blanc de Melo had a similar response when she brought a team of students from the Universidade do Porto to the 2007 GBCC. Hoping to replicate the competitive and cultural experience, Blanc launched the FEP-UPORTO International Case Competition in 2013. “There is no case competition culture in Portugal, so being invited the first time was a departing point for us,” says Blanc. “And regarding our own competition, the GBCC was undoubtedly a benchmark.” This year, two former Foster students are instigating case competitions to serve students in their respective corners of the world. Aysa Miller (BA 2004) and Nathan Bright (BA 2014) are alumni of the Certificate of International Studies in Business (CISB), Foster’s top-ranked specialty program that gives undergrads a competitive edge in global business through language immersion, study or work abroad, and practical experience. Miller, the economic and deputy commercial officer at the US Embassy in Khartoum, Sudan, assembled a team of students representing three Sudanese universities to compete in this year’s GBCC. He’s following up with a local case competition hosted by the Ahfad University for Women—the first in the east African nation. Bright, a lecturer at the Universidad de Manizales in Colombia, is bringing a GBCC-style competition to his students with the help of Kathleen Hatch, assistant director of undergraduate programs at the Global Business Center. Hatch offers open-source guidance to anyone seeking to replicate the life-changing experience that the GBCC annually delivers through its mix of company visits, social events, professional development, cultural exchange and rigorous competition to solve a real-world international business challenge. She’s not surprised to see the competition’s effect rippling so far and wide. “I think that the GBCC has been an inspirational model to other business schools because it incorporates everything that is so critical to business education today—cross-cultural communications, teamwork and strategic thinking,” says Hatch. “It forces students to grapple with the complexities of doing business in today’s global landscape.” Not to mention, it’s great fun.

8 | Foster Business

The Business of Gaming Foster center initiates certificate program in tribal gaming and hospitality management The UW Consulting & Business Development Center launched the Tribal Gaming and Hospitality Management Certificate Program in February. Managers from casinos and resorts owned by the Swinomish, Shoalwater Bay, Quinault, Muckleshoot, Spokane, Snoqualmie and Colville Tribes formed the inaugural class. The program teaches the essentials of accounting, finance, management, marketing and ethics in the unique industry of tribal gaming.

Last year’s GBCC winners: a global team of Nick Schuler (Foster), Jarred Adams (Florida State University), Mathea Hubert (NHH Norwegian School of Economics), and James Lam (Chinese University of Hong Kong).

DID YOU KNoW? Seattle is 5th on Forbes’ list of America’s Fastest-Growing Cities 2015

go Foster Are you a member of LinkedIn? Please consider updating your profile to include “Foster School of Business” in your education (if it doesn’t already)—it’s better visibility for you and helps show the breadth of the UW Foster alumni network to prospective students, recruiters and the media. Note that simply listing University of Washington does not produce the same result.

Lending local As 2014 came to a close, the Foster School’s Consulting and Business Development Center announced a new microlending program in partnership with Harborstone Credit Union and the Northwest Business and Community Development Center. The program was established to address a lack of access to capital for local small businesses, especially service-oriented companies. Named the Washington Microenterprise Loan Fund, Harborstone Credit Union provides the financing, and Foster students act as loan officers and business advisors, supporting loan applicants while getting valuable real-world experience. In fact, it is the Foster students who are tasked with making the business case to Harborstone’s lending team. The fund’s loans vary from $5,000 to $50,000 and charge a low 2% annual interest rate. The first two loans were awarded to Makini Howell, owner of Plum Restaurants, and Danyale Thomas, of Good Hair Salon. “Our goal in partnering with Harborstone is to give our students the opportunity to build their skills and increase their competitiveness after graduation. At the same time, we want to support the growth of small businesses and the jobs they create,” says Michael Verchot, director of the Consulting and Business Development Center.

National Champs

©, Sashkinw

Foster students bring home the gold in national case competitions The Foster School turned on its own “beast mode” several times on the national stage this year. In October, Professional Sales Program undergraduates Geyliah Hara Salzberg, Alex Crane, Meredith Barrett and Natalie Jerome won the National Team Selling Competition at Indiana University. To top 21 participating universities from around the USA, the Foster team impressed the judges from 3M and Altria with their most persuasive sales call supporting the rollout of a private label product line. Accounting students John David McLeary, Lindsey Jackson, Natasha Pulliam and Trenton Dos Santos-Tam brought home first prize from the PwC (Pricewaterhouse Coopers) Case Competition in January. To book passage to the finals they outwitted 46 schools from around the country via video, then earned top honors from the judges— PwC national partners and directors—at the finale in New York City. Evening MBA students Sylvia Luk, Mark Smedley, Mark Lloyd and Matthew Davis won the BNY Mellon Katz Invitational Case Competition at the University of Pittsburgh in January. The Foster team produced the best solution to a corporate social responsibility case involving the energy industry. Also in January, the Foster undergrad team of Danielle McConnell, Tina Moore, Mayowa Laniran and Joshua Banks finished second at the National Diversity Case Competition at Indiana University over the Martin Luther King Jr. weekend. It was Foster’s first time competing.

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VeterAns wAY

A growing company of armed forces vets is choosing the Foster School to transition from military to corporate careers, and the benefits go both ways.

By ed kromer Dan Boirum was leading a search-and-destroy operation up the remote Arghandab River valley of Afghanistan when a 100-pound improvised bomb exploded under his Stryker armored vehicle, wounding four crewmen, one critically. The blast knocked Boirum unconscious. But he recovered to resume command of his US Army Stryker platoon and its mission: stabilize this volatile region at the front lines of the war on terror— a task that required a precarious balancing of military might and cultural diplomacy that is perhaps unprecedented in wartime history. Today, just a few years removed from the dust and dangers of Kandahar Province, Boirum is back in his home town of Seattle, learning to manage in a very different context at the Foster School of Business. His combat experience and leadership credentials aren’t exactly typical at Foster. But he’s hardly alone, either. In the past few years, a growing cohort of veterans of the United States Army, Navy, Air Force, Marine Corps and Coast Guard have come to Foster, looking to power their transition from military to corporate careers. “I came to Foster hoping it would give me the ability to learn about the various aspects of business and then give me a path to a new career,” says Boirum, a first-year MBA. “I didn’t come in with a plan. I came knowing that it would be a place where I could figure it out in a safe environment and with all the support I could possibly ask for.” Back to school Foster is part of a nationwide surge of military veterans flooding into colleges and universities to plot civilian careers. Recent troop withdrawals and military budget cuts are expected to send 1.5 million service members into the civilian workforce by 2019. At the same time, the education benefits available to veterans and active duty military have never been better. The largest is the Post-9/11 GI Bill, which covers tuition, books and housing costs. “The GI Bill made all the difference to me,” says Matthew Nutsch (TMMBA 2014), a recent graduate of Foster’s Technology Management MBA Program who served in the Navy as an electrician on a nuclear-powered submarine. “It’s an amazingly good deal and the TMMBA Program is so dynamic that it would feel wasteful not to take advantage. The education has changed my life.”

Left: Dan Boirum, Cover: Norma Domingo and Chris Wigley

Tony Casement, lead counselor at the University of Washington Veterans Center, says that’s a common sentiment: “Instead of getting out and trying to go straight to work, many military vets are taking advantage of the benefits to advance their education and enter the workforce with a better job.” A great place to restart It happens that one of the best places to advance that education is the UW. U.S. News & World Report named the UW second nationally in its 2015 ranking of Best Colleges for Veterans. Casement believes the reasons for the ranking begin with proximity to multiple military bases, including Joint Base LewisMcChord and the Whidbey Island, Kitsap and Everett Naval bases. He also factors the university’s generous tuition waivers and other assistance for veterans; a proliferation of military student organizations; and a high-functioning Veterans Center that advises students, offers career counseling and removes the pain of finding and applying benefits so veterans can focus on their studies. The university’s sterling international reputation doesn’t hurt, either. “The UW is not only military friendly, but a great name academically,” Casement adds. “It makes a lot of sense to go here.” He says that more than 1,500 students at the Seattle campus are receiving some form of military benefit, which is transferrable to dependents. Of that number, around 700 are veterans or active duty service members. And nearly 80 of them are enrolled at the Foster School. Finding Foster Casement believes that business is a popular field of study for veterans because it opens doors to so many lines of civilian work, and because many of the management and leadership skills mastered in the military—especially by officers—are transferrable. This may explain why the largest jump in military enrollment at Foster is occurring in the MBA programs. The Full-time MBA has seen a doubling of veterans and active duty officers in the past couple of years alone. Why Foster? Start with its reputation and ranking in the upmost echelons of American b-schools. Add its personalized approach to teaching, advising and career services, plus its long tradition of assisting dramatic career transformations.

SPRING 2015 | 11

Taj Mathews

Military + Microsoft + Marketing Taj Mathews (MBA 2013) always wanted to work in tech. He interned at Microsoft in high school, studied IT management at the US Naval Academy and today is back at the Redmond software giant working as a product marketing manager for its Cloud + Enterprise marketing group. His career, however, has been a lot less linear than it might appear. Five years of active duty in the Navy took Mathews around the world. In his first tour, he served two deployments as a surface warfare officer aboard the USS Whidbey Island, a 610-foot, 16,000-ton dock landing ship that delivered Marines and an armada of amphibious transport around the Arabian Gulf. In his second deployment, he ran operations in the Middle East and South America, and liaised with regional partners in counter-mine warfare exercises out of Bahrain. In between, the former Midshipman basketball star captained the globetrotting All-Navy and USA Armed Forces basketball teams. When it was over, Foster helped Mathews focus on what’s next. A consulting project and internship with Microsoft reopened doors. “Learning to reposition my skills and experiences for business was hugely valuable,” he says. “And so was the opportunity to gain some new experiences—trying the canvas of business disciplines to see what worked best.”

Chris Wigley

Model of modern military leadership Chris Wigley’s first deployment to Iraq involved bomb disposal missions similar to those depicted in “The Hurt Locker,” minus most of Hollywood’s hyperbolic suspense. The Army engineering platoon he commanded was as cautious as it was capable at weapons sweeps and bomb demolitions—usually deploying a robot in harm’s way. “We would have made a pretty boring movie,” Wigley admits. More compelling, at least as an indie film, might be the larger part of their mission in this chain of small towns around Tikrit: the delicate art of front-line community relations, a new form of counterinsurgency. Wigley led humanitarian wasta projects to win the trust of residents who once threw stones at their convoys. “You have to be credible to build trust,” he says. “And everything flows from there.” This evolved approach to military leadership—flexible, collaborative, culturally aware—has proven a fine fit at the Foster School, where Wigley is a second-year MBA and president of the MBA Veterans Association. His second tour of the UW is very different than his first, when he focused his undergraduate studies and activities on leading soldiers in the Middle East. “Now I’m doing everything I can to prepare for leading teams in a business,” says Wigley, who will soon trade combat for consulting. “I wanted to see the world through a totally different lens. And Foster has totally fulfilled that.”

12 | Foster Business

More than 1,500 students at the Seattle campus are receiving some form of military benefit, which is transferrable to dependents. Of that number, around 700 are veterans or active duty service members. And nearly 80 of them are enrolled at the Foster School. But the thing that seems to appeal most of all to military veterans is the school’s genuine culture of collaboration. “There is definitely a different culture at Foster,” says Chris Wigley, a second-year MBA who has compared notes with Army buddies studying in MBA programs across the country. “For me, the collaborative environment here has been enormously beneficial.” It’s familiar territory for anyone who has served in any branch of the military where, as Boirum says, “everything is a collaboration.” The full package Collaboration goes both ways. And Foster veterans give as good as they get. According to Dan Poston, assistant dean for masters programs at Foster, students with military backgrounds add immeasurably to the shared learning environment. “We’re looking for classes with a diversity of perspectives,” he says. “Military students bring a facility with structure and organization to get things done. These are very positive traits to have in any team. Plus, they share their leadership training, both formally and informally.” That training is the best in any business, according to Bruce Avolio, director of the Foster School’s Center for Leadership and Strategic Thinking and author of multiple studies on military leadership. “What you see in our military is what we expect from our leaders in business: authentic, ethical, adaptive, agile role models who focus on development and put collective interest above themselves,” Avolio says. “This comes from a program of training and development that exceeds any business organization in the US or likely on Earth.” But leadership is not the only asset that veterans bring to the management classroom. Avolio adds that they offer wisdom from having dealt with the most difficult decisions in life. They are comfortable working in hostile environments and ambiguous situations. They have a deep sense of team and self-sacrifice. They appreciate the ultimate importance of ethics. And they bring a learning orientation that challenges others in a respectful way. Brave new world So why do they need a business degree? Part of the value is simply in the time and opportunity to figure out what to do with the rest of their lives—especially for people with little work experience or professional network outside of the service.

“It’s hard for military people to start over,” explains Norma Domingo, a former aircraft mechanic in the Navy now studying human resources management at Foster. “You’ve earned a rank and a name for yourself. But that doesn’t carry over to the civilian world. I’m the same as every other Foster undergrad. We’re all here to start something new.” Beyond career discernment and the acquisition of technical knowledge in the business disciplines, many veterans use Foster to “demilitarize” themselves, as Ryan McCarthy puts it. “In the Army we wear our rank on our chest, so you always know a person’s level of authority,” says the former artillery officer now pursuing his Foster MBA. “Here in business school and in corporate America, you have to be persuasive without the rank.” Transferring soft skills is only half the battle. The other half is translation. “Bragging about your accomplishments is frowned upon in the military,” says Wigley. “But when you interview with a company, that’s exactly what you have to do. When you’re not used to telling that story, it can come out raw and unrefined.” Poston says that Foster’s program staffs and career services excel at helping veterans communicate the assets they bring to any organization: “We help with the meat and the message, framing their experience in a way that has relevance to a recruiter.” Nested networks Military and ex-military students at Foster report a kind of sixth sense for finding each other in class. Maybe it’s their age. Or something in the way they speak, or carry themselves. Whatever it is, the bond is inescapable, the product of a shared experience, whatever their flavor of military service. Now Foster vets have a more formal place to find each other. The student-organized MBA Veterans Association is only a few years old, but it’s rapidly evolving from social club to network hub. The current officers are working with undergraduate leaders to charter a BA chapter of the organization. They are advising prospective students, coordinating with the Husky United Military Veterans organization to create a mentor program, hosting career development and networking events, and connecting with military bases and area employers to develop a military-to-corporate pipeline. “The MBA Program administrators talk about how we have a golden ticket as a student,” says Veterans Association president Wigley. “I think we have a second golden ticket as veterans. If you reach out to vets at all kinds of companies, they’re usually more than willing to help.”

SPRING 2015 | 13

“What you see in our military is what we expect from our leaders in business: authentic, ethical, adaptive, agile role models who focus on development and put collective interest above themselves.” — bruce avolIo An old habit that dies hard. Dan Boirum describes the connection between veterans in familial terms. He recalls suiting up for an interview with Liberty Mutual when a couple of classmates stepped in to perform an informal class A uniform inspection—even swapping watches so he’d look sharper. “It was just an instinctive thing,” he says. “Your buddy is going into an important meeting, so we’ll look you over, straighten you up. There’s a definite brother/sisterhood here—all within the larger Foster family.” Passion and purpose That’s the ultimate expression of the Foster student experience. Matt Pescador, an executive officer in his 20th year with the Navy, enrolled in Foster’s Executive MBA Program preparing for an eventual second career, ideally at a comparable level of seniority. What he’s found is the definition of a symbiotic relationship. And endless inspiration. “I have deep experience in leadership, and the executives in my program bring a fast-paced technocracy that I’m not familiar with,” he says. “The relationship between what they learn from me and what I learn from them is exactly what the program is trying to foster.” For Boirum, those relationships—with people from every background who share a genuine passion—are the keys to his transformation to a successful and meaningful civilian life. “When you transition out of the military, one of the things you’re most concerned about is finding another place where you belong, where there is a shared sense of purpose to make the world a better place. I was afraid that I’d leave the Army and be lost,” he says. “But at the Foster School I’m surrounded by people who want to be part of something special together, something bigger than themselves. I never feel lost here.” n

14 | Foster Business

Brad Clark

The capabilities that veterans bring Brad Clark’s (MBA 2007) first screening interview with Foster MBA admissions was a memorable conversation. The Marine field artillery officer was on the satellite phone with Seattle in the late days of his final deployment in Iraq, when he was forced to postpone abruptly. “I’ll have to call you back,” he said. “We’re getting mortared.” That’s life in the military. And Clark saw plenty during a long enlisted career in the USMC Reserve that led to “chasing a dream” after 9/11. “I wanted to see if I had what it took to serve as a Marine officer,” he says. “And I did.” Transitioning from a war zone to an MBA classroom came with its own challenges. In 2005, Clark was something of a curiosity at Foster. “People were disconnected from what was going on in Iraq and Afghanistan,” he says. “There wasn’t a lot of understanding about the capabilities that veterans bring, especially those of us who have been deployed to combat.” Clark learned as much from his Foster classmates as they did from him. And since graduating, he’s directed operations and equipment at Linden Transport and is currently director of transportation for Starbucks’ global supply chain. He’s making it his business to demonstrate just what a military man can accomplish off the battlefield.

Sarah McCaffrey

“Rock Star” analyst Two inflection points—a decade apart— indelibly shaped the professional life of Sarah McCaffrey (TMMBA 2014): enlisting in the Marine Corps and enrolling in the Foster School. After struggling through high school, McCaffrey learned discipline and responsibility as a Marine, and discovered a knack for data. Her eight years of service as an aviation data analyst earned a Flag Letter of Commendation from the Commander of the US Pacific Fleet. “The Marine Corps changed everything, personally and professionally,” she says. But when she left active duty, her future was unclear. “Transitioning from military service is as intimidating as moving to another country,” McCaffrey admits. Direction came from the Foster School’s Technology Management MBA Program. McCaffrey found the structure and team-orientation pleasingly familiar, and flourished at transferring her analytical and leadership skills from the Marine Corps to corporate America. Today she’s an online advertising analyst for the Disney ABC Television Group, a job that’s pretty popular at home. “The TMMBA Program took what I did in the Marine Corps and gave me the remaining skills that I needed to be able to move into such a wonderful company,” McCaffrey says. “I have young daughters. Working at Disney makes me a rock star in my family.”

Norma Domingo

Big things, small package Don’t judge Norma Domingo by her size. Before studying human resources management at Foster, the diminutive Domingo was an aviation mechanic in the Navy, deployed twice to the Persian Gulf with her Prowler squadron aboard the aircraft carrier USS Harry S. Truman. In the carrier’s hangar bay, her small stature was a distinct asset. “Anytime they needed somebody to get into a really tight space, they’d call on me,” Domingo says. “I fit perfectly under the nose landing gear.” She also turned out to be a wiz at administration, which made her a perfect fit at Foster, too. That, and a lifelong penchant for leadership. A natural organizer in her El Paso high school, Domingo was president of Morale, Welfare & Recreation in the Navy and the Phi Theta Kappa honor society at Skagit Valley College. At Foster, she’s involved in a number of student clubs. As an officer in the Undergraduate Business Council, she’s helping create the school’s first undergraduate mentor program. So maybe do judge Norma Domingo by the size of her ambition. “People from my hometown who don’t have a goal get stuck,” she says. “I didn’t want to get stuck. I was determined to do something with my life. The Navy and the Foster School are helping me get there.”

Choosy households ChooseVets After eight years in the Marine Corps and two deployments to Iraq as a combat engineer officer, Chris Sheppard’s (MBA 2012) return to civilian life was, in a word, disorienting. “It’s difficult getting out of the military, especially if you’re a combat vet,” he says. “A lot of times your skills don’t directly transfer to the civilian world. And you don’t know exactly what you want to do.” Sheppard found his footing at the UW, where he earned joint JD/MBA degrees and launched a new career as an M&A advisor. Fortunately for returning veterans still finding their way, Sheppard also discovered entrepreneurship at the Foster School. He and a law school friend, Steve Buchanan, have recently launched ChooseVets (, an online marketplace that connects ex-military service providers with people who have home-based construction and landscaping projects to be done—and who wish to “support our troops” in the process. After starting simple, Sheppard and Buchanan plan to expand the ChooseVets market to licensed trades and professional services. Having already raised $215,000 from investors and been covered by the likes of Forbes and GeekWire, they’re well on their way. “We wanted to find a way for veterans to profit from the brand they earned when they volunteered in our military and served honorably,” Sheppard says. n

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financial risk








excessive trading


real estate ownership

savings rates

ŠViachaslau Kraskouski, Blend Images, Aman Ahmed Khan, Kenneth Sponsler/Shutterstock; Š, jezperlauzen, JackF


AAGTinheritance By ed kromer

In a series of pioneering studies, Stephan Siegel has identified a powerful genetic component behind a lifetime of financial behavior As financial creatures, we are magnificent mysteries. What makes us savers or spenders, buyers or renters? Why do we play the stock market or safeguard our money in the bank? Why do we gravitate toward growth or value investments? Why do we trade too much, refuse to sell at a loss, fail to diversify, bet on lottery stocks or chase past performance—even when we know it’s wrong? Each of the financial decisions in our lives is the result of innumerable—and sometimes unknowable—forces. Now, for the first time, we do know that one of the most powerful of those forces is our DNA. In a series of groundbreaking studies on the determinants of financial behavior, the Foster School’s Stephan Siegel has established that, on average, one-third of the variation between individuals is attributable to our genetic makeup. These innate predispositions eclipse the effects of age, gender, health, income, education or even parenting. And they remain consistent in driving decisions throughout our lives. “We find that genetic differences explain much more than socio-economic factors that prior research has proposed to explain differences in financial behavior,” says Siegel, an associate professor of finance and Evert McCabe Faculty Fellow at Foster. “Genetic differences matter throughout people’s lives, even in old age.” Nature v. Nurture How did a professor of finance find himself charting a new chapter in the field of behavioral genetics? Siegel’s trip down this particular rabbit hole began with a simple observation back in graduate school. While working on a study of empirical asset pricing at Columbia University a decade ago, Siegel noticed that most finance models were constructed assuming that all investors are

identical and could be collapsed into a single “representative agent” acting as proxy for the entire economy. He began working on relaxing this assumption and allowing for investor heterogeneity that so obviously exists in the real world. But in addition to acknowledging that these differences exist across individuals, he became Stephan Siegel increasingly interested in knowing why they exist—what causes the variations that drive seemingly similar people to invest so dissimilarly. Questions about the origins of human behavior were traditionally the domains of psychology and anthropology, wherein raged the age-old debate over the determining effects of nature versus nurture. Few in Siegel’s discipline had had ever asked how differences arise in risk attitudes or patience. And no economist had tried to measure the fundamental source of such variation. But the question so compelled Siegel that he decided to detour from his original studies and search for a way to measure the source of an individual’s behavioral biases and risk and time preferences that determine financial decisions. “It turns out,” he says, “that nature provides us a unique opportunity.” Twinning Siegel was introduced to the power of twins by the seminal work of Thomas Bouchard at the University of Minnesota. Beginning in the 1980s, Bouchard and collaborators produced compelling evidence on the heritability of a large number of personality traits and cognitive skills using data from the Minnesota Center for Twin and Adoption Research, the largest twin registry in the United States.

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Genes matter Over the past several years, Siegel and primary co-author Henrik Cronqvist, a professor of finance at the China Europe International Business School, have systematically analyzed some of the most common financial decisions. In separate studies they considered savings rates, financial risk taking, investment style, real estate ownership, and a variety of investment biases including inadequate diversification, excessive trading, reluctance to sell at a loss, chasing past performance and trading in lottery stocks. What they found, from comparing the behavioral correlations of identical and fraternal twins, was astoundingly consistent across all behaviors: 30 percent of the variation between individuals, on average, is attributable to genetic makeup. And this consistency holds up over time. Separating the twin population into age groups demonstrated that maturity and the acquisition of personal experiences does not drive out a person’s genetic influence. Even comparing a small subset of twins who were raised apart produced very similar results. Siegel, a native German who lives and works in the United States, notes that context is important. He studied Swedes. But

other genetic studies suggest that less-constrained societies— such as America’s—could permit a more pronounced genetic effect. The more we’re allowed to “express ourselves,” the more our genes will express themselves. The bottom line: more or less, heredity matters. “A significant portion of our financial behavior is predetermined,” Siegel says. “And it stays throughout our lives.” Surprisingly indeterminate But how big a deal is 30 percent? To put it into perspective, Siegel and Cronqvist estimate that the combined factors of age, gender, education, wealth and home ownership explain at most 15 percent of these behaviors. And parenting—the crux of the “nurture” camp—is shown to have little and diminishing impact on a person’s financial proclivities as we get older. “Parents do matter early in a person’s financial life,” Siegel says, “but less and less over time.” He adds that the effect of education—whether you’re talking general level of schooling or dedicated financial literacy initiative— on financial behavior is difficult to evaluate. What Siegel can say from his existing work is that findings of a positive correlation between education and financial behavior do not necessarily represent a causal effect. For example, when one identical twin has graduated college and the other has not, he observes no significant effect of the college education on financial sophistication (or the quality of financial decision making).

What they found was astoundingly consistent across all behaviors: 30 percent of the variation between individuals, on average, is attributable to genetic makeup.

18 | Foster Business

©Kenneth Sponsler, RedKoala/Shutterstock; ©

The technique is simple enough in concept. Identical twins share roughly 100 percent of their DNA. Fraternal twins share, on average, 50 percent of their DNA. So, if you compare the similarity of behavior between pairs of identical and fraternal twins, you can isolate the genetic component of that behavior. That is, if you have enough twins to study. For Siegel, finding a suitable twin registry would not be enough. He also needed corresponding financial data for each set of siblings. It happens that the Swedish Twin Registry, the world’s largest such database, has tracked more than 50,000 pairs of twins throughout their lives. And it also happens that the government of Sweden kept a comprehensive record of every financial transaction made by every tax-paying citizen until the abolishment of its national wealth tax in 2007. “Amazingly, Statistics Sweden agreed to merge these two data sets for us,” Siegel says. “And we were able to observe exactly what 30,000 twins did in the financial domain: how much of their income they saved, how much they invested in risky assets, what investment biases they displayed.” It was a data set of dreams.

“A significant portion of our financial behavior is predetermined, and it stays throughout our lives.” — Stephan Siegel If there’s a common conclusion from these discoveries, it’s that the genetic component of financial decisions is comparatively strong, consistent, and not easily altered. Siegel has focused on individual behaviors. But some of those behaviors have economy-wide ramifications as well. Particularly troubling are the intractable investing biases that afflict so many of us. Learning from our mistakes appears to be challenging. “It may explain why we see a repeating pattern of bubbles and bursts in financial history,” he says. “These biases are very persistent.” The driverless car As a public policy issue, genetic inequality in the financial realm might prove too controversial to touch. But Siegel believes that better financial decisions—at least for retail investors—will come from innovations in the financial services industry. He predicts that asset management will evolve into a service that everyone can afford, personalized but automated, using data mining technologies and complex algorithms to deliver comprehensive analyses and objective advice on what we should do with our money to optimize our lives. The revolution will be computerized. And, in fact, it’s already begun. New industry players such as Betterment, Wealthfront and Financial Engines offer an automated alternative to flesh-and-blood financial advising. And it’s probably a matter of time before Google, Amazon and the other masters of Big Data and cognitive computing enter the market. The key is data and the computer algorithms to make sense of it. In the not-so-fictional future, Siegel envisions a highly intelligent system of machine learning that will stitch together a complete and accurate profile of us from our expansive datatrace of actions and transactions. Eventually our decoded personal genome and cognitive functioning may enter into the equation as well. “We are getting much better at measuring things that we once believed immeasurable,” Siegel says. “Our genes. Our brains. Our behaviors. It’s all just data that can be registered, analyzed and acted on.” If this all sounds a bit too much like Orwell’s cautionary Big Brother, Siegel tends to agree. But the truth is, we’re becoming more comfortable with—and reliant on—automation technologies that earn our trust. For Siegel’s future of financial advising, Google Maps is a good analogy. An even better one is the driverless car, which will know where you are, where you want to go, and the

most efficient way to get there—bypassing external obstacles and our own innate biases along the way. No matter how good we think we are behind the wheel, the driverless car will be better. “That’s the equivalent change I expect in financial services,” Siegel says. The rest of the story The noted behavioral geneticist Nancy Segal says that the studies of Siegel and Cronqvist are a welcomed extension of her field, which has focused on cognitive abilities, medical conditions and other behaviors. “It’s nice to see that twin research has such broad applicability,” says Segal, a professor of developmental psychology at Cal State Fullerton. “Their work can help us to understand and guide investment and other financial decisions, and to better understand our choices, which are influenced—in part but not fully—by genetic factors.” To that point, there is more than simple heredity to the financial story of us. “While genetic effects are important,” Siegel says, “they are not destiny.” Everything he’s learned about the determinants of financial behaviors—heredity, parenting, education and more—still leaves a lot of mystery. At least 50 percent of the variation between people is shaped by the individual and idiosyncratic experiences of our lives. This unknown is where Siegel is headed next. It turns out that twins contain the answers to some experiential questions, too. One of his recent studies finds that our formative-years exposure to hard times or happy days affects our inclination to invest in value or growth stocks. Another shows that birth weight and in-vitro exposure to testosterone predict an individual’s risk tolerance throughout life. There are so many experiences yet to explore before we know the full picture of what makes us do what we do with our money. Plenty of work ahead for Siegel and the growing cohort of scholars on the frontiers of behavioral finance. “When we started down this path, nobody had looked at the genetic drivers of financial behavior, which has proved to be a worthwhile area of study,” Siegel says. “But financial behavior is not deterministic. There are other factors at work, too. Your life course matters in your financial decisions. “A strong factor is inherited, but there’s always room for variation.” n

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the effective networker Christina Fong shares the secrets to better networking It’s the quintessential soft skill. A mantra for the modern manager. An act that, done repeatedly, can enhance your life, your career and your effectiveness as a leader. Networking. But how many of us do it well? Do we make the most of our opportunities to connect? Foster Business asked Christina Fong, a senior lecturer in management and faculty member of the Foster School’s Center for Leadership and Strategic Thinking, to share some of the networking wisdom she imparts to Foster MBA students.

20 | Foster Business

Foster Business: Are effective networkers born or made? Christina Fong: There is some research that indicates that your personality does affect the type of network that you tend to be in. That being said, no matter how introverted or extroverted or selfless or Machiavellian you may be, we can all improve our networking effectiveness. Okay, then, let’s cut to the chase. What can we do to become more effective networkers? There are some specific behaviors we can improve upon. I’d categorize them into four actions: 1. Meet new people at networking events. 2. Diversify your network. 3. Expand your conversation topics. 4. Follow your passions (or, don’t try to fake it). Isn’t meeting new people what networking events are for? You’d be surprised. Researchers who tracked the interactions of people wearing GPS-embedded nametags found that the vast majority of people at networking events and parties tend to talk only to people they already know. To make the most of a networking opportunity, I urge people to push themselves to break out of their circle of friends and acquaintances, and actually meet new people. Introduce yourself to someone you don’t know. Strike up a conversation with a stranger. What do you mean by “diversifying” your network? There’s a great historical illustration of the power of a diversified network in Malcolm Gladwell’s “The Tipping Point.” On an April night in 1775, two patriots rode from Boston to inform the nearby citizenry of an impending British attack. One, named William Dawes, had a limited social network that was largely insular; everyone knew everyone else. The other, Paul Revere, had a much more expansive network of acquaintances, many of whom did not know each other. This diversity of connections enabled his message to disseminate widely and quickly (and won Revere immortal fame whilst Dawes was relegated to a historical footnote). What can we learn from this? The most effective networkers are those who connect with others who are dissimilar to themselves. This means knowing people in different industries and walks of life, from different demographic backgrounds and of different ages. We especially encourage more senior executives to connect with younger colleagues. What’s the point of expanding conversation topics? Shouldn’t networking be focused? We tend to talk about school with our school friends, church with our church friends, and work with our work friends. But the most effective networkers are able to toggle between different domains of conversation with different people. A great example is the Silicon Valley venture capitalist Heidi Roizen who is famous for blurring the lines between personal and professional in her extensive and powerful network.

Passion is great, but don’t we sometimes have to attend events that don’t really excite us? Maybe, but don’t expect to get much out of them. Many of our MBAs make the mistake of going to events they think they should attend or where high-powered people will be. But we don’t typically make meaningful connections at such events because we appear calculating as opposed to genuinely interested. When you follow your passion, your body language changes. Your enthusiasm and openness is incredibly attractive. What’s the biggest misconception people have about networking? That it needs to be self-serving, viewing people as instruments to our own objectives. Francesca Gino calls this “dirty networking,” and her studies show that it makes us feel literally contaminated. It is not sustainable. If you are trying to use your network only to help yourself, you are not going to be as successful as if you use your network to help other people. At Foster we talk a lot about the work of Adam Grant, author of “Give and Take.” One counterintuitive takeaway from his work: people who spend time giving to others can be more successful, over time, than those who take from their networks or try to broker a fair exchange of giving and taking. How can you be a giver without being taken advantage of? As Grant points out, the most successful givers schedule particular times that they dedicate to helping other people. They also develop some particular expertise to offer their network, some added value that complements the expertise of others. Finally, they recognize that helping others—in a controlled and intentional fashion—actually relieves their own stress, and makes them more productive, even during their busiest periods. How does effective networking lead to more effective leadership? You can’t be a leader by yourself. The most influential and effective leaders, especially in the long run, are those who build communities in which it’s easy for everyone to help everyone else. Connectors. Catalysts. Changing the way we think about networking—from how to use people to how to help people—is often a first step to becoming a better relational leader. With some work, this is attainable by any personality type. Many of our MBAs enter the Foster School thinking I can either help myself or others. But the big “aha” moment is that these are not mutually exclusive. Helping others doesn’t mean you’re not helping yourself. Most of the time, our self-interests are aligned with helping others.

Christina Fong’s comments on networking are adapted from the Foster School’s LEAD, a leadership development course for incoming MBAs. n

SPRING 2015 | 21


personal finance Ask a group of Foster finance and accounting faculty to recommend a book on personal finance and you wouldn’t expect to get a list of “Get Rich Quick” titles. Nor did we. Instead, our selected scholars dug deeper, offering more discerning picks to improve your command of investing and comprehension of the financial markets, with a couple of unorthodox choices and one clear favorite.

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Burton G. Malkiel)

“A great book that explains why the average retail investor should hold low-cost index funds (as I teach in my core MBA class). Don’t waste your time and money picking stocks since even the pros have a hard time beating the market. I hold the market and I always sleep very well at night!” — Thomas Gilbert, Assistant Professor of Finance “Malkiel discusses how capital markets work and explains in intuitive terms why they are as efficient as they are in a really approachable and interesting way.” — Lance Young, Senior Lecturer of Finance and Business Economics “A classic primer on individual investing, this book is a great read for beginners and more advanced investors alike. Malkiel walks through basic investing strategies in a non-technical and entertaining way. I’ve recommended this book to several family members who were starting out on their own investing.” — Jennifer Koski, Associate Professor of Finance “Malkiel is a Princeton economist and a long-time Vanguard director. Read the book and learn how to become a true ‘Boglehead.’ Diversify, buy and hold, minimize transactions costs. It really is that simple.” — Rocky Higgins, Professor of Finance “A classic that provides a great overview of investing and keeping costs under control.” — Stephan Siegel, Associate Professor of Finance and Business Economics

The Big Short: Inside the Doomsday Machine (Michael Lewis)

“Lewis takes a look at five investors who figured out that the housing market was overvalued in 2005 and the travails they faced in ‘betting’ against the market. This illustrates how difficult it is to find mispriced assets in a capital market and how hard it can be to actually profit from the mispricing if you do manage to find it.” — Lance Young, Senior Lecturer of Finance and Business Economics

The Undercover Economist Strikes Back: How to Run—or Ruin—an Economy (Tim Harford)

“Fiscal and monetary policy have become the topic of dinner table conversations since the financial crisis. Harford provides an easy-to-access book on the different theories on how to create a thriving economy. It’s detailed enough to be useful but not so nuanced as to overwhelm readers less familiar with macroeconomics.” — Jonathan Brogaard, Assistant Professor of Finance

Dilbert and the Way of the Weasel (Scott Adams)

“I’m actually recommending 121 words of this book by the creator of Dilbert. His “Everything You Need to Know about Personal Investing” is so sound that I teach it in my class and so concise that it fits in a book recommendation: Make a will. Pay off your credit card balance. Get term life insurance if you have a family to support. Fund your 401(k) to the maximum. Fund your IRA to the maximum. Buy a house if you want to live in a house and can afford it. Put six months’ expenses in a money market account. Take whatever money is left over and invest 70 percent in a stock index fund and 30 percent in a bond fund through any discount brokerage company and never touch it until retirement. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues) hire a fee-based financial planner, not one who charges a percentage of your portfolio.” — Jonathan Karpoff, Professor of Finance How We Decide (Jonah Lehrer)

“A great book for someone who wants to understand the mental process underlying personal finance decisions.” — Frank Hodge, Professor of Accounting

The Only Investment Guide You’ll Ever Need (Andrew Tobias)

“I first read this book when it came out in 1978. I then gave it to several non-academics to read, including my mother. It is simple, usually correct, often funny, and free of the jargon designed to make readers feel stupid. These characteristics put it way out front of the class of personal finance books. While the world was much different 30 years ago, I am confident the recent new editions will be very helpful.” — Ed Rice, Associate Professor of Finance and Business Economics

Financial Shock: Global Panic and Government Bailouts— How We Got Here and What Must Be Done to Fix It (Mark Zandi)

“Zandi identifies the origins of the subprime financial crisis—the most important financial event since the Great Depression—and examines the impact the crisis had on financial markets, the economy and households.” — Frances Maloy, Lecturer of Finance and Business Economics

The Wall Street Journal, Money, Bloomberg Businessweek

“I really don’t read personal finance books, but I try to accumulate knowledge and ideas through these periodicals which do a pretty good job covering personal finance.” — William Bradford, Professor of Finance

faculty Research briefs

by Ed Kromer

The Wisdom of (Small) Crowds

Positive Buzz

Continuity Counts

To police online communities, limited crowdvoting is most efficient

Caffeine can help resist pressure to act unethically

Long-term investors improve corporate behavior, increase returns

As life increasingly migrates online, the traditional work of experts is gradually giving way to the wisdom of crowds. Aggregated peer reviews guide our purchasing decisions. Index funds concentrate the collective intelligence of investors. We crowdsource, crowdfund, crowdtest, crowdcreate. And, lately, we’ve begun to crowdvote, in growing numbers. New research by Michael Wagner addresses the latest application of crowdvoting—deploying unpaid volunteers to enforce rules of etiquette in online gaming communities. Wagner models the optimal format and number of voters it takes to rule quickly, accurately and efficiently on complaints about behavior that violates a community’s “terms of service” agreement. When weighting votes by the past accuracy of voters, he finds as few as five are required to produce an objectively accurate ruling. Wagner, an assistant professor of operations management, says the system is a win-win for hosts and members of all manner of online communities. “Crowdvoting can allow organizations to save costs on more agile and responsive enforcement,” he adds. “And customers who volunteer to vote feel more engaged in the online community.” n

Sleep deprivation can render us more likely to act unethically, especially when we feel social pressure to do so. But caffeine can patch that vulnerability, according to new research by David Welsh, an assistant professor of management. “When you’re sleep-deprived at work, it’s much easier to simply go along with unethical suggestions from your boss because resistance takes effort and you’re already worn down,” says Welsh. “However, we found that caffeine can give sleep-deprived individuals the extra energy needed to resist unethical behavior.” So what’s a concerned organization— and its sometimes exhausted employees —to do? Welsh says that employers, at a minimum, could provide coffee, tea and energy drinks. But the best long-term strategy is to develop a broadly ethical culture that limits the pressure to behave unethically. This, plus schedules and policies that reduce overwork and help keep employees sharp on the job. “Caffeine may be a short-term fix for people who are sleep-deprived. It may help you navigate a particular ethical dilemma,” Welsh says. “But caffeine is not a panacea. The ideal is to come to work well-rested.” n

In a world where leaders of publicly traded firms could choose to maximize their own self-interest over the interests of shareholders, who minds the managers? Long-term investors do. And quite effectively, according to new research by Jarrad Harford, the Marion B. Ingersoll Professor of Finance. They appear to reduce earnings management, accounting misconduct, financial fraud and option backdating, among a litany of corporate malfeasance. They also discourage overinvestment while fostering shareholder democracy and encouraging dividend payouts. Moreover, in curbing bad corporate behavior, Harford finds evidence that long-term investors ultimately benefit shareholders. They drive higher stock returns, greater profitability and lower risk. They decrease volatility and reduce defaults and bankruptcies. And they lead to greater diversification along business, industry and geographic lines as well as across customers and products. “Long-term investors have the means and motive to better monitor corporate managers,” Harford concludes. “As a result, managers are induced to make corporate policy choices that increase shareholder value.” n

24 | Foster Business

©hobbit, Moving Moment, jorgen mcleman, NEGOVURA/Shutterstock; ©, Sashkinw

Mean boss?

Hi-Def Projection

Slippery Slope

Might be due to a bad night’s sleep

Hidden in the accounting, a more accurate way to forecast sales

Minor ethical breaches can compound into major offenses

The conventional way to forecast retail sales is more scientific than a tea leaf reading, but not by much. Even as data abounds, the abiding method boils down to a surprisingly simple extrapolation: take last year’s growth rate and project it forward. Now, Sarah McVay and Asher Curtis, associate and assistant professors of accounting, have developed a significantly better forecasting tool. Their model incorporates previously overlooked public accounting disclosures to produce a forecast of sales—a strong indicator of future firm value—that is twice as accurate as conventional models. The new technique factors a firm’s projected store openings. More importantly, it computes expected sales for each based on the firm’s historical new store sales figures. “Our model is a simple and yet powerful way to forecast a firm’s future sales based on publicly available data,” says McVay. “Even a small improvement in forecast accuracy can consequently have large implications in the accuracy of value estimates.” She adds that the model could be adapted to forecast firm sales in any industry, as well as sales of new products. n

What’s the harm in a purloined pen or a slight reporting fib at the office? Not much, by itself. But research by David Welsh demonstrates that minor ethical breaches tend to lead incrementally to major transgressions. This is some of the first empirical evidence supporting the “slippery slope” theory of ethics—that misdemeanors lead to higher crimes. From a series of studies, Welsh concludes that people are more likely to justify small misdeeds than large ones. But when those small crimes are followed by progressively larger offenses, the tendency to justify expands with the crime. The result? People are more than twice as likely to commit—and justify—a major unethical act after they have “worked their way up” to it with a series of escalating offenses. Organizations that wish to avoid the slippery slope need to instill a strong ethical culture that clearly defines and punishes misconduct, counsels Welsh, an assistant professor of management. Addressing minor offenses quickly is the best defense against more significant offenses down the line. “Put people in a more vigilant mindset,” he suggests. “Provide ethics training, enact ethical standards and reinforce those standards.” n

Managers are more likely to engage in abusive behavior when they are not getting enough quality sleep. That’s the conclusion of a new study by Christopher Barnes, an assistant professor of management. Barnes’ previous research on fatigue research has demonstrated that lack of sleep contributes to a litany of workplace ills among employees. His latest shifts the focus from subordinate to supervisor. He finds the incidence of abuse—such as publicly berating a subordinate—rises sharply on days following a bad night’s sleep for the boss. And the result of that supervisory abuse is far worse than bruised feelings. Employees are less engaged and productive on abusive days. The cumulative effect of abusive management, Barnes adds, is employee stress, low job satisfaction, deviant behaviors, poor performance and intentions to quit. “If leaders want their subordinates to be truly engaged,” Barnes concludes, “they should start by looking at the quality of their own sleep.” n

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Jack SamOliver

Charlie James

Swimming with Sharks

Wall Street Occupations

On Fashion

Entrepreneurs, like teenagers, need a guiding mother

Finance-sector compensation necessary, not necessarily deserved

Identifying the course and cause of its inexorable cycles

Entrepreneurs and adolescents have a lot in common. Both are bounding with energy, navigating rapid changes, still learning the world around them—and, yes, brimming with overconfidence. So entrepreneurs, like teenagers, need a protective mother-figure to help them navigate the risks they probably don’t even recognize. That’s the crux of a new study by Benjamin Hallen that considers the decisions of entrepreneurs to accept corporate venture capital—investment from established companies that often comes fraught with mixed motives. Hallen, an assistant professor of management, finds that independent VCs —whose motives often better align with entrepreneurs—can help by playing the role of big brother or protective mother, depending on their proximity. More distant VCs tend to play the older sibling, using their existing relationships, reputations and clout to open doors to corporate venture investment and possibly deterring corporate sharks from actions outside of the entrepreneur’s best interests. Closer VCs tend to act as protector, identifying long-term risks and suggesting safer alternatives to corporate money. “While entrepreneurs can go it alone,” Hallen notes, “they may want to find an investor or advisor who can help keep them from unnecessary risks along their journey.” n

Why are financial sector employees paid so lavishly? And why do they tend to act more irresponsibly during economic booms, when their compensation is at its highest? These are questions increasingly on the minds of critics, whose ranks have swelled since cavalier behavior on Wall Street triggered a global economic crisis in 2007. Now a study by Philip Bond, an associate professor of finance, sheds new light on the subject. Using sophisticated modeling techniques, Bond argues that the finance sector’s elaborate compensation packages are necessary—though not necessarily deserved—to motivate high performance in work with such serious consequences on other people’s money. But this compensation structure has a downside. It exacts a brain drain on other worthy professions. And it contributes to an increase in lax and reckless behavior during robust economic periods, when impeccably educated and connected financiers are especially confident they’ll land on their feet should they fail. On balance, Bond still concludes that the utility of Wall Street compensation outweighs its harm. “An overhaul of the finance sector’s pay structure would result in employees working less hard and messing up more often,” says Bond, “with enormous ramifications.” n

Fashion has gone mainstream. This is not to say that haute couture has saturated the suburban mall. Rather, the broader force of fashion—the social dimension of consumer culture—now influences the sales of virtually every consumable, from clothes, perfume and shoes to cell phones, diet plans and power tools. But how well do we really know fashion? Can we predict its cycles, identify its sources? A new study by Hema Yoganarasimhan produces the first statistical model to identify the course and cause of fashion cycles. Applying it to a pure example of fashion’s effect—the popularity of baby names over time—Yoganarasimhan demonstrates that the driver is cultural capital rather than wealth, settling a longstanding theoretical debate. She says that a model like hers can help marketers adjust product design, price, distribution and advertising to more effectively influence the prime movers within their demographic. “It’s not a very complicated model, and it can be easily adapted to predict what will come next given different sets of actions,” says Yoganarasimhan, an assistant professor of marketing. “This is vitally important to remain ahead of the curve.” n

26 | Foster Business

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Serious Money Historic MBA class gift seeds Foster’s first student-run investment fund Lance Young is not afraid to wield a sports metaphor when it’s warranted. And to describe the Foster School’s new MBA Investment Fund, his game of choice is baseball. “It’s like AAA ball,” says the senior lecturer in finance who serves as faculty advisor for the nascent student-managed fund. “We play the game to the best of our ability the way it’s played by research and money management shops, applying all of the frameworks we learn here at Foster.” That is to say, the school’s “minor league of investment management” is educational, but not academic. The fund is a serious venture led by portfolio managers and informed by research analysts, each following a disciplined and rigorous strategy. And now, they have real money to invest. Funding That money originated with the Foster MBA Class of 2011 which dedicated its outgoing class gift toward creating a live investment fund for future students to manage as an indelible learning experience and a pipeline to the majors, so to speak. “We wanted Foster to develop more opportunities for MBA students with an interest in finance, and also improve the competitive positioning of the school,” says ringleader Andrew Parcel (MBA 2011), now vice president and private wealth advisor at Goldman Sachs. “This seemed like an obvious way to add a tool for recruiting students and improving the chances of finding work in the investment community.” Under the guidance of Thomas Gilbert, assistant professor of finance, leaders of the MBA Finance Society began drawing up structure, policy and procedures for the fund. Subsequent classes and Dean Jiambalvo added to the account. And late last spring, well ahead of expectation, the fund reached its trigger point of $100,000. Go time. Founding With Gilbert away this year as a visiting professor at the University of British Columbia, Young stepped in. And Tristan Toomey stepped up. Toomey, this year’s Finance Society president, recruited fellow second-year MBAs Aalok Shah, Brennen Ricks and Brett Schulte to serve with him as portfolio managers. They “hired” 13 firstyear students as research analysts and commenced building a boutique investment fund from the ground up. This has required discipline and patience. Before a cent of capital was invested, the team established a viable organization and spent most of the academic year systematically populating a massive matrix of market data that will become a library for future MBA fund managers.

Senior lecturer Lance Young and portfolio managers Brennen Ricks, Tristan Toomey, Aalok Shah and Brett Schulte

This analysis trickles down from economy to industry to firm. “In the next stage we’re looking at particular companies that present real alpha because they’re doing something innovative that can provide positive returns in the long term,” Toomey says. Young adds that the experience has been a de facto capstone of the entire Foster MBA experience. “If you want to find alpha, you have to understand a company’s business better than the rest of the market does,” he says. “That takes an analytical capability that comes from all the disciplines we teach at Foster. Every one of those checkmarks on the matrix is a framework applied.” Future This year’s portfolio managers will make their first investments of the fund, now $300,000, just weeks before they graduate. “We knew that building continuity was the most important thing this year,” Toomey says. The legacy will be both a working fund and a class outside the classroom—to be passed like a torch to future Foster MBAs of the finance persuasion. “If we had done this in a theoretical setting, we could never achieve this level of reality and practical learning,” says Toomey. “But because we have real money and report to real ‘shareholders,’ ” Young adds, “we have to follow a rock-solid investment thesis that makes sense and has the Foster brand on every trade.” Dan Poston, assistant dean for masters programs, notes that the fund, from concept to execution, is an exemplary collaboration between former, current and future Foster MBAs. “As a sustainable, practical piece of the Foster education,” he says, “the way the fund mimics reality in its design and its management is a beautiful thing.” Maybe even a grand slam. n SPRING 2015 | 27


Ventures and Adventures At work and at play, master developer Charlie Hogan seizes the day

Charlie Hogan (BA 1959) tends to take the road less traveled—if any road at all. Whether piloting himself over the Grand Canyon or to a remote fishing lodge on Vancouver Island, exploring the wilds of Botswana, New Guinea and the Galapagos with his wife Nancy, catching camel races outside Dubai, or touring remotest Vietnam and China by bicycle, his life is guided by an intrepid sense of curiosity. “We so like adventure,” Hogan says. “I’m grateful that my career has allowed me the opportunity to live an adventurous life.” That career has been equally adventurous. At 77 and still going strong, Hogan has achieved great success as an entrepreneur, banker, investor, philanthropist and, above all, real estate developer. It all began at the Piggly Wiggly. Better shop around Charlie and his twin brother Carl Hogan (BA 1959) began bagging potatoes at their father’s downtown Puyallup grocery store when they were eight, and graduated to stocking, bagging, checking and every other job in the business. “I learned a lot growing up but also learned enough about the business to realize that I didn’t want to become a grocer,” admits Charlie. Even then his mind was on real estate development. After graduating from the Foster School together in 1959, the brothers joined their father in creating a chain of south Puget Sound grocery stores using the Piggly Wiggly franchise. These were stand-alone stores that they developed and owned themselves, soup to nuts. But Charlie could see the market changing. In the early 1960s, he gingerly approached his father about developing a shopping center to showcase their grocery stores and further advance their growing expertise in development. “My dad came from the Depression era,” recalls Hogan. “So you can imagine the conversation. He said, ‘I hate to borrow money, so this better work out.’” 28 | Foster Business

It did. So Hogan and sons began developing shopping centers around south Puget Sound. Carl ran the grocery retail operation and Charlie ran the construction and development—finding sites, performing market analyses, navigating city codes and processes, managing contractors and recruiting and negotiating the leases for other merchants to co-tenant with their grocery stores. Following their father’s retirement in the mid-1980s, Charlie and Carl continued to build and operate by adapting to a rapidly changing marketplace. By the mid-1990s they had 500 employees and owned16 shopping centers from Bremerton to Centralia to Enumclaw. They rebranded some of their groceries as Hogan’s Markets and built larger stores under the Bag ’n Save name. But consolidation was coming. The brothers made the difficult decision to sell the grocery business to QFC and Safeway in 1995. They split most of their properties and the partnership to pursue their own real estate interests. Slice of lifestyle Charlie’s son John—who had gotten his start in his own father’s grocery stores—joined on as project manager for his next developments. Carefully tracking the region’s growth trends, they built apartment complexes in the south Sound, then condo conversions in Seattle, then new construction of condos and apartments including mixed use buildings in Seattle and Tacoma. “I’ve had a keen interest in developing,” says Hogan. “And I paid close attention to detail. My philosophy has always been that if our family is involved, it has to be special.” There’s no better example than Uptown Gig Harbor, the fashionable, 15-building “lifestyle center” that he and John opened in the depths of the financial crisis. An evolution of the simple goods-and-services premise of the strip mall, Uptown brought a new retail experience to Gig Harbor and became a gathering place, with restaurants, cafes, specialty shops, a bookstore, a movie theater and social events throughout the year. “The community has really embraced it,” Hogan says. “It’s the place to go.” Banking, et al The list of entrepreneurial adventures doesn’t end there.

Noting the lack of a community bank serving his hometown, Hogan founded Gig Harbor National Bank in 1983. A series of acquisitions by Puget Sound National Bank and KeyBank led to his 15 years of service on the board of directors of KeyCorp, the tenth largest bank in the nation at the time of his mandatory retirement. Hogan has always been drawn to those who share his entrepreneurial spirit. He partnered in launching a synthetic cork company as the domestic wine industry was taking off. And more recently, he’s become an early investor in a wide variety of pioneering technologies, including a stem cell company, a next-generation sport aircraft builder, and Spaceflight Industries, developer and operator of commercial satellite systems.


Golden years Though he’s not exactly retired, Hogan is happy to leave the day-to-day headaches of his business in the capable hands of his son. “The market is always changing, and it will change again,” he says. “John has done a superb job in continuing the growth of the company and managing what we continue to hold. At my age, I don’t have the patience for the growing red-tape it takes to not only get projects started, let alone get them done.” With his hard-earned dividend of time, Hogan pursues his eternal passion for flight, adding each month to his 8,500 lifetime hours in the cockpit. He and Nancy enjoy golfing, hiking and skiing in Sun Valley. And they spend as much time as possible with son John and daughter Heidi, an accountant who lives in Portland, and their five grandchildren. He’s also turned Foster into a family affair. Charlie proudly serves on the school’s Advisory Board. He and John are mentors for the Buerk Center for Entrepreneurship. He and Nancy have supported the school financially, including funding the Hogan Terrace in PACCAR Hall, its signature balcony overlooking Denny Yard. And Nancy, a board member of the Museum of Flight and the Smithsonian Institute, is hosting a museum event for DC-area UW alumni later this spring. “Life’s been good to me,” Hogan says. “Although I have worked very hard over the years, I know that I wouldn’t have been able to accomplish the things I did without the fabulous education provided by the Foster School. So I’ve given back and will continue to give back.” n – Ed Kromer

8 EMBA, TMMBA, GEMBA Graduation Ceremony Meany Hall


31 UW Alumni Day at the Sounders; Foster Alumni Pregame Party Pyramid Alehouse June

5 MSIS Graduation Shansby Auditorium, PACCAR Hall Rm 192 7 Undergraduate Graduation Celebration Hec Edmundson Pavilion

MPAcc Audit and Tax Graduation Celebration HUB North and South Ballrooms

13 Full-time MBA, Evening MBA, PhD Graduation Celebration Meany Hall UW Commencement Ceremony Husky Stadium

27 7th Annual UW Foster Alumni Picnic Denny Yard July

10 UW Alumni Night at the Mariners; Foster Alumni Pregame Party Pyramid Alehouse September

25-27 MBA Reunions for Classes 1990, 1995, 2000, 2005 & 2010 26 Foster Alumni Tailgate UW vs. California E1 Parking Lot

Spring 2015 | 29


Wonder Woman Heidi Otto is uniquely qualified to bring unique brands to market There is nothing like a Wonderbag. The quilted cinching sack, insulated with recycled foam chips, envelops almost any sized pot to become a portable, packable, miraculously non-electric slow cooker. And each purchase buys a second bag for a family in Africa, where it alleviates a litany of serious health, safety and environmental hazards that result from cooking over open fires. It’s a unique product with a mission, perfectly suited to Heidi Otto (MBA 2007). The managing director of Wonderbag’s nascent North America business has made a career of bringing one-of-a-kind brands to market. “There is just something so attractive about products that are right on the edge of trends,” she says. Carving a niche Ironically, Otto’s career began in the considerably less edgy world of cosmetic advertising. She hated it, and lasted all of four months. But alternative doors began opening. First, she happened into a job marketing the launch of a National Geographic spinoff called Adventure. Then she managed special events for Macy’s stores along the East Coast. Then she helped bring a refrigerated soup brand from the UK to the US. The Colorado native returned to the west for a field marketing position at the California-based Clif Bar, right about the time that Clif introduced Luna. Or, to be more precise, Heidi and her team introduced Luna. Otto proposed and executed every aspect of a dedicated marketing campaign targeting women in various life stages—maternity, marriage, active mom, even menopause. “Luna was growing like mad,” she says. “It was one of the best marketing jobs that anyone could have.” But Otto wanted to do more. So she enrolled in the Foster MBA Program with a laser focus on taking her niche to the next level.

30 | Foster Business

After post-graduate work at a San Francisco brand incubator, she joined Somersault Snacks, baker of a curious little crisp made of sunflower seeds. Overseeing marketing, sales, operations, accounting and finance, Otto took the untried product to the shelves of more than 6,000 grocery stores across America. Somersault exercised the full measure of her education and experience. It also opened the door to Wonderbag. Mission critical Like the one-for-one model of Tom’s Shoes, the business of South African entrepreneur Sarah Collins promised an even bigger philanthropic bottom line: a better life for families in the developing world. But Wonderbag’s model would require the purchasing power of North America to work. After meeting Collins, Otto was all in. “It was like the job had been written for me,” she says. Not that there was much of a description. But operating in ambiguity is right in Otto’s wheelhouse. She began by zeroing in on the brand’s promise to American consumers: convenience. A novel way to cook for tailgaters, camping trips, parties and potlucks—with a conscience.

Convincing those consumers requires of Otto a mulligan stew of branding strategy, website architecture, media buying, PR, Amazon placement, fundraising, product development, celebrity partnerships. Whatever it takes. “It’s a lot of trial and error,” she admits. “But doing new things has always been the norm for me. I just figure it out as I go.” Business is booming for Wonderbag, which has distributed more than 700,000 cookers in Africa through its foundation. “I saw in Luna a brand that inspired real passion in people,” says Otto. “I think Wonderbag has the potential to get there, too.” Chief operating entrepreneur It’s certainly a passion project for Otto. Something deeply personal. And there will be others—more unknown brands to champion, more undefined challenges to conquer. At her core, Otto is an operating entrepreneur, unsung but indispensable. “I love all the managing and coordinating and thinking through all of the elements it takes to build a brand,” she says. “I’m not the type who’s going to come up with the next crazy brilliant idea. “I’m the one, behind the scenes, who is going to make it happen.” n – Ed Kromer

Power Couple AJ Maestas and Lacey Bundy are making their mark in different industries

For AJ Maestas and Lacey Bundy (both BA 1999) the Foster School is a springboard for success in more ways than one. The pair, married in 2007, met while studying business as undergrads, later taking different career paths while drawing from a common foundation in business. Maestas—recently named one of Sports Business Journal’s “40 under 40”—is the founder and president of Navigate Research, a Chicago-based company that evaluates marketing investments, primarily in sports and entertainment. Bundy is senior vice president, general counsel and corporate secretary of Express, Inc., one of the largest specialty apparel retailers in the US. Opportunity + challenges When deciding where to apply for college, Maestas felt drawn towards a life that was different than what he had known in Fairbanks, Alaska. “It only takes five minutes on campus or in the city of Seattle to realize it’s a special place,” he says. For Bundy, a Seattle native, the University of Washington was the only in-state school to which she applied.

Like many students today, the pair received some support from their parents, but also worked and took out loans. “It is probably one of the things we are most proud of. Neither of our parents graduated from four-year universities, but it was important to them that we did,” says Bundy. After graduation, the duo sought new challenges outside the region. “I felt the need to stretch myself and step out of my comfort zone after undergrad,” says Bundy. Maestas received some encouragement and direction from his business school friends, who had made the decision that the group would move to New York or Boston for the challenge and the opportunity. “I wasn’t consulted,” he jokes. “I like to think that the fact I had already moved to NYC had something to do with their decision!” laughs Bundy. Exploration + support Many successful career trajectories can seem circuitous at first. Bundy, who graduated as an accounting major, accepted a job with Ernst & Young at their national office, advising clients on financial reporting issues related to IPOs, mergers, etc., where she was exposed to the work that corporate lawyers managed during the transactions. Convinced she would like that work more than being an auditor, she decided to pursue a law degree at Northwestern. Maestas provided encouragement for the career change. “I doubt I would have had the nerve to take on all the debt and step away from work for three years to do it without him,” she says.

Likewise, Maestas’ work after graduation wasn’t quite ideal. “It took me a while to marry my avocation to my vocation,” he says. Maestas had always had a passion for sports and had often considered starting a business, having earned an MBA from Arizona State University. When he noticed a void in the industry, he seized the opportunity: “If there is a need and you have the skill to fill that need you must take a leap of faith at some point,” he says. Navigate Research measures the impact and ROI of hundreds of sponsorship deals for clients like ESPN, Sony and Anheuser-Busch, just to name a few. In their current positions, the two enjoy tackling complex challenges with a dependable team. “The opportunity to practice law in fashion retail with a fabulous team is pretty much a dream come true. Retail is undergoing such rapid change right now that it is a really exciting space to be in,” says Bundy. “I thought sports would make for a great career because the subject matter is fun and interesting, but really, it’s the people,” says Maestas. Teamwork + planning A partnership between two successful career-driven people like Bundy and Maestas can entail a great deal of teamwork and planning. Currently, their careers require them to be based in two different cities—Chicago for Maestas and Columbus for Bundy. They fly as often as possible to connect on weekends and vacations. “I wouldn’t recommend this, but the career steps and education that got us to this point have always come first. I think we are very fortunate in many ways, but this is at the top of the list. It’s hard enough to find a life partner without our career and geographic challenges,” says Maestas. So, what does the future hold? While the pair never back away from a challenge, they have a more modest goal in mind: “Living in the same city would be nice,” says Maestas. n – Chas Holden SPRING 2015 | 31


Confidence is key Young alumna Melanie Stambaugh takes on Olympia

It is 2015. No doubt about it. Want to see a modern political campaign unfold? Look to social media. In the case of Melanie Stambaugh (BA 2013), her race to a seat in Washington’s House of Representatives began on Facebook with a picture from the Seahawks’ Super Bowl parade on February 5, 2014. It was quickly followed by a post with a picture of Stambaugh and her grandmother helping at a bingo event for visually impaired and blind veterans. Of course, the real beginnings of Stambaugh’s political aspirations precede her Facebook posts. They date back to junior high when she had the opportunity to spend a week in Olympia learning about Washington’s political process. She shadowed former Representative Joyce McDonald. “When I was down there, I really fell in love with the political process, the tension as well as the impact that I knew was being made,” says Stambaugh. “I remember taking paperwork from one office to another, and thought ‘maybe one day it will say Representative Melanie Stambaugh.’ ”

32 | Foster Business

Impact, early By mid-March, Stambaugh announced her candidacy for the State House of Representatives for the 25th Legislative District. She was challenging a five-term incumbent, Dawn Morrell. While the press release used to announce her campaign bid didn’t mention it, Stambaugh was just 23 years old, a fact that quickly became a focus for media and voters, though it didn’t faze the candidate. Stambaugh worked at Washington Policy Center, a Seattle-based think tank, while obtaining her degree. During her time there, the center sent her to a national convention. “It was a group of people 40 and younger, from across the country, talking about national policy issues. I realized, you don’t have to be on the traditional path of having your career, having your family, then running for office. You could make an impact sooner rather than later,” says Stambaugh. Knock, knock. Who’s there? On May 17, Stambaugh wrote a post on Facebook about a great day of doorbelling. It was an activity that she repeated again and again—more than 17,000 times before the general election. Interspersed among the doorbelling posts were ones about public forums and debates and community events. With questions that run the gamut from the political to the personal, she describes the entire campaign as a test of being able “think on your feet.” Here, Stambaugh says that her experience at the Foster School was great preparation, especially her participation in the Global Business Case Competition. “Doing that set me up for success,” says Stambaugh. “There’s something about being presented with a business problem and having only 48 hours to come

up with a solution to pitch in front of a panel of executives. That memory carried me through many times in the campaign when I’d get a tough question at a town hall or a forum and have to provide a solution. I’d think, ‘OK, I can do this. I know what this feels like.’ ” Stambaugh also credits her Foster experience as one of the reasons she felt comfortable opening a business directly after graduation. You Impression, which she owns with her sister and mother, is a company that helps people build confidence through a variety of approaches, ranging from personal and professional coaching to anti-bullying workshops for kids. The thrill of victory On the night of November 4, Stambaugh’s Facebook post was a snapshot of the early election results: she led the incumbent with 53% of the vote. Two days later she posted updated results; her lead had widened to 54.5%. She had won. In doing so, Stambaugh became the youngest woman elected to the Washington State Legislature since 1936 according to Seattle Weekly, which captured her victory with the headline: “24-Year-Old Republican Baffles Democrats, Heads to the State House.” “When she won, it was one of the most startling outcomes of this year’s election,” says Susan Hutchison, chair of the Washington State Republican Party. “It’s noticeable when someone as young and sharp as Melanie gets elected by unseating a popular incumbent. We’re very proud of her.” Raise your right hand Stambaugh’s Facebook post on January 12 features a picture of her being sworn into office. “I’m in. It’s a true honor to serve you. #MelanieInTheHouse” n – Andrew Krueger

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