The Berkeley Master of Financial Engineering Program was again ranked #1 by The Financial Engineer, which published its annual financial engineering rankings this week. The Berkeley MFE has placed #1 in this ranking since 2016.
TFE focuses 55% of its ranking on the quality of the class (students’ GREs, GPAs, and the acceptance rate) and 40% on post-degree outcomes. Another 5% is based on the number of distinct courses available and research expenditures.
Read the full report here.
Prof. Nancy Wallace has been honored with UC Berkeley’s prestigious 2019 Berkeley Faculty Service Award for making a lasting and significant impact—particularly by helping the campus navigate complex financial and real estate issues.
The award is bestowed by the Berkeley Division of the Academic Senate on faculty whose “outstanding and dedicated service to the campus, and whose activities as a faculty member have significantly enhanced the quality of the campus as an educational institution and community of scholars.”
Wallace, the Lisle and Roslyn Payne Chair in Real Estate Capital Markets and chair of the Haas Real Estate Group, shares the honor this year with Spanish Prof. Ignacio Navarrete of the Department of Spanish and Portuguese.
“During the past 10 years, Nancy has devoted extraordinary time and energy to the campus’s day-to-day well-being,” wrote Anthony Long, chair of the Academic Senate’s Committee on Faculty Awards and an emeritus professor of classics and literature.
Wallace, a prominent expert on the residential mortgage market, mortgage-related securities, and pricing models, helped the campus with a “series of onerous financial issues,” including the budget for intercollegiate athletics, advising on strategic banking relationships, and a sustainable funding model for the Lower Sproul Plaza redevelopment project.
In 2008, she was recruited by the UC Office of the President to serve on the Systemwide Committee on UC Faculty Mortgage Programs. She was also drafted to play a major role in the financial planning for Memorial Stadium, helping to deliver a blueprint for expanding the stadium’s uses.
Prof. Candi Yano, Haas Associate Dean for Academic Affairs and Chair of the Faculty, along with Prof. Richard Stanton wrote in a letter of support that in addition to her campus service, Wallace goes far beyond herself at Haas.
“Very few faculty are so committed to the campus that they are willing to invest long hours and their intellectual prowess in improving the financial stability of the campus. We note that Nancy is equally dedicated in her service to the Haas School, where she has served as Chair of the Real Estate group essentially ‘forever’,” they wrote.
In addition to her service on campus, Wallace has served on the Federal Reserve’s Model Validation Council and the U.S. Treasury’s Financial Research Advisory Committee.
Prof. Severin Borenstein has been appointed by Gov. Gavin Newsom to the board of the California Independent System Operator (CAISO), which oversees the state’s massive electric power system, transmission lines, and wholesale electricity market.
Borenstein is the E.T. Grether Professor of Business Administration and Public Policy at the Haas School and faculty director of the Energy Institute at Haas. He said he is honored by the appointment.
“This is an exciting time for the ISO as the industry develops approaches to reliably integrate renewable energy,” Borenstein said. “The board will have an important role facilitating opportunities for beneficial trade with the rest of the western market and continuing to support California’s climate goals.”
The California ISO is charged with ensuring that the state’s power grid—one of the largest and most modern in the world—operates reliably and transparently, and maintains an accessible wholesale energy market. The CAISO is a nonprofit public benefit corporation operating governed by a board of five members who serve staggered three-year terms.
An economics professor at Berkeley Haas since 1996, Borenstein’s recent research has focused on energy markets, including alternative models of retail electricity pricing, the impact of oil prices on gasoline markets, and the economics of renewable energy and climate change. He is also an outspoken, independent voice for climate change policies that are both efficient and are economically sound.
Borenstein has long been involved with California energy policy. He chaired the California Energy Commission’s Petroleum Market Advisory Committee from 2015 until it was dissolved in 2017. From 2012 to 2013, he served on the Emissions Market Assessment Committee, which advised the California Air Resources Board on the operation of California’s Cap and Trade market for greenhouse gases. He was a member of the Governing Board of the California Power Exchange from 1997 to 2003, and served on the California Attorney General’s gasoline price taskforce in 1999-2000.
Highly sought after as a media commentator, op-ed contributor, and blogger, Borenstein most recently discussed the implications of the Pacific Gas & Electric bankruptcy with more than a dozen news outlets, from the Financial Times to Bloomberg to KQED’s Forum. (Read his Berkeley News interview here.)
While the CAISO will not be directly involved in the PG&E bankruptcy, it will be required to ensure that the grid continues to operate seamlessly no matter which public or private utilities are in the mix. That includes preparing for changes wrought by climate change, and reliably integrating renewable power from wind and solar.
Borenstein’s appointment requires confirmation by the Senate.
It was a year of milestones, of changes, and of new beginnings here at Haas. As we prepare to welcome our new Dean Ann Harrison next month, here’s a look back at the Top 10 stories of 2018.
1. Dean Rich Lyons wraps up his term; Laura Tyson steps in as interim dean
After Rich Lyons wrapped up his 11-year tenure as dean with a guitar-powered “Berkeley Leader: Live!” worldwide tour, Laura Tyson stepped in as interim dean July 1. Having served as dean of the Haas School from 1998 to 2001 and on the Haas faculty since 1990, Tyson is a steady hand at the helm.
Ann E. Harrison, a renowned Wharton economist and Berkeley alumna, will begin her term on January 1, 2019. Harrison, the William H. Wurster Professor of Multinational Management and Professor of Business Economics and Public Policy at the University of Pennsylvania’s Wharton School, has deep Berkeley roots. She earned her bachelor’s degree from UC Berkeley with a double major in economics and history in 1982. She also served as a professor of Berkeley’s Department of Agricultural & Resource Economics from 2001 to 2011. Her initial priorities: Grow the faculty in key areas, increase the number of cross-school programs, and increase the diversity of the student body and faculty.
UC Berkeley Chancellor Carol T. Christ and University of California President Janet Napolitano came out to help dedicate Chou Hall, the newest campus addition, in March. The $63 million building, which opened last August, was funded entirely by donations from alumni and friends. Chou Hall is currently on track to become the first TRUE Zero Waste certified academic building in the U.S.
4. Haas adopts a new diversity, equity & inclusion plan; hires new director of inclusion and diversity
Hired last January from UCSF, where she directed the Multicultural Clinical Training Program, Élida Bautista is charged with setting school-wide strategy for inclusion, diversity, and equity efforts focused on students. This past October, Bautista helped senior Haas leaders deliver its first Diversity, Equity & Inclusion Action Plan, which provides concrete ways to bolster enrollment of underrepresented minorities at Haas and to develop a more inclusive environment school-wide. The plan is a direct response to a decline in the number of African-American students enrolled in the Full-time Berkeley MBA Program over the last two years.
It’s been eight years since Rich Lyons codified the school’s culture in four Defining Leadership Principles: Question the Status Quo, Confidence Without Attitude, Beyond Yourself, and Students Always. The school celebrated with its first annual Berkeley Haas Culture Day in February. To commemorate how deeply they’ve been embedded in school culture, the four DLP’s were carved into the walls along the Piedmont Avenue entrance.
Professor Emeritus Janet Yellen, who taught generations of Haas students from 1980 to 2004, retired in early February after a four-year term as the first woman to serve in what’s been called the world’s most powerful economic job. Under Yellen’s guiding hand, unemployment fell steadily, inflation stayed low even as the economy built up a head of steam, and, to add icing to the cake, financial markets went on a tear.
“Yellen is on a glide path to near perfection, as she will probably end her term achieving the Fed’s dual mandate better than any other chair in history,” George wrote Mason University economist Scott Sumner as Yellen ended her term.
Members of the Haas faculty racked up a host of awards for their teaching, research, and service throughout the year. Assoc. Prof. Panos Patatoukas won Berkeley’s most prestigious teaching award, and Sr. Lecturer Sara Beckman was honored with a graduate student mentoring award. Outgoing Dean Rich Lyons received the Berkeley Citation for his outstanding service to the campus community, while Prof. Andrew Rose was honored with the Williamson Award for his service at Haas. Assoc. Prof. Jonathan Kolstad was named as a top health economics researcher under 40 and a top business leader under 40, and Asst. Prof. Juliana Schroeder was recognized as a “rising star” by the Association for Psychological Science. Prof. Laura Kray’s article on women as negotiators garnered an outstanding paper award, and a paper by professors Nancy Wallace and Rick Stanton won a prize for best paper in financial management.
The year brought a few rankings highlights for the Full-time MBA program, which rose to #6 in Businessweek’s Best B-Schools ranking. The Evening & Weekend program ranked #1 (again!) and our undergraduate program tied for #2 among US schools, both in the US News ranking. The Economist ranked our Berkeley MBA for Executives (EMBA) program #4 in the world.
Three new assistant professors joined the Berkeley Haas faculty, with research interests that range from how financial news influences markets to the unintended consequences of mortgage market regulations to developing more accurate ways to predict consumer behavior. Left to right: Anastassia Fedyk and Matteo Benetton will join the Finance Group, while Giovanni Compiani will be part of the Marketing Group.
Haas had long led the way on incorporating social impact and sustainability into business education. Twenty years ago this fall, five Haas MBA students founded the Global Social Venture Competition, which has helped 6,500 teams from 65 countries move closer to their vision for a better world (the 20th annual competition will take place in the spring). Also this fall the Center for Responsible Business celebrated its 15th anniversary, and the the Cleantech to Market (C2M) Program marked its 10th year of pairing student teams with scientists to push promising technologies to market.
A team of Berkeley MBA students took first place at the 16th annual National Real Estate Case Challenge for their creative investment strategy surrounding a new commercial property.
The prestigious finance-based competition, hosted by the University of Texas McCombs School of Business last month, charged 20 teams from the top MBA programs with analyzing a real estate investment case and presenting a recommendation before a panel of industry leaders.
For three of the six Haas team members—Matthew Hines, MBA 19; Robert Kelly, MBA 20; and Mark Trainer, Master of City Planning (MCP) 19—the win comes just months after participating on a team of students that took back the Golden Shovel real estate award from Stanford. The other National Real Estate Case Challenge team members—Claire Collery, MBA 19, Joe Dembesky, MBA 19, and Mike Wiedman, MBA 20— participated in their first competition. The team took home $10,000 in Haas’ first win since 2009.
Case sponsor Invesco asked teams of six to figure out the best way to use money generated from a new commercial real estate construction project. The options given were to keep the building in the portfolio with no change to existing financing; keep the building in the portfolio but refinance the loan on it; sell the building and return the profits to investors; or sell the building and invest the profits in building a new property.
Questioning the status quo, the Haas team came up with a different option.
“We questioned why there were only four options given, and we began to suspect there was a hidden fifth option,” Hines said. The team proposed refinancing the existing building and combining the savings with additional money in the private equity fund to invest in building a new property.
The Berkeley Haas team spent nearly three months preparing for the competition during an independent study course taught by Lecturer Bill Falik, a managing partner with Westpark Community Builders, and Abigail Franklin, an investment banking and real estate student adviser. Students in the class practiced solving sample cases each week and presented to guest judges, including former competition participants and local finance and real estate professionals. The format helped build competence, cohesion and confidence, Dembesky said.
Judges said they were impressed with Berkeley’s presentation, which called for role playing, creativity and financial acumen.
“I was playing the role of the fund manager, and Matthew [Hines] burst onto the scene from the development team and pushed for funding the second building,” Collery said. One of the judges told the team that the performance felt like being in a real investment committee meeting, Dembesky said.
A team of Berkeley MBA students bested groups from seven schools to win the annual Berkeley Haas Tech Challenge for their plan to educate city government officials on how new technologies can support initiatives that improve quality of life and efficiency.
The 2018 Berkeley Haas Tech Challenge, called “Big Data and the City of Tomorrow,” was held Nov. 8-10.
The winning Haas team included Bryan Chiang, Catherine Hsieh, Max Kubicki, and Cori Land, all MBA 19s. Haas took home the $5,000 first-place award for the second year in a row.
The challenge called on students to come up with a plan to entice city government officials to adopt Amazon Web Services (AWS) to create smart cities. Smart cities use data and communications technologies to increase efficiency, share information with the public, and improve the quality of government services and public safety. Example projects include monitoring and managing traffic signals remotely, using a software platform that tracks the real-time availability of spaces in parking lots, and implementing a lighting-management system that allows cities to monitor energy efficiency and maintenance needs.
The Haas team began the Tech Challenge case by asking: Who are the customers, what do they care about, and how can AWS meet them where they are?
“We tested each of our ideas against whether or not it ultimately solved a problem for people,” Land said. “If not, we rejected the idea, and it helped us focus our recommendations.”
The Haas team made recommendations for a website redesign that would provide easy-to-understand smart cities information to non-technical city planners, as well as new certification programs to educate government officials on how they could use AWS.
(Left to right) Max Kubicki, Bryan Chiang, Cori Land, and Catherine Hsieh prepare their presentation. Photos: Benny Johnson.
The team also proposed a dashboard tool to help city officials compare their city services to others that have adopted smart cities technology—and measure the potential return-on-investment for their proposed projects.
Confidence without attitude may have been what set the Haas team apart from competitors. “One judge kept thanking us for admitting we still had some work to do when we better understood some gaps in our plan,” Hsieh said. Another Haas strength was leveraging broader perspectives by assembling a team with different areas of expertise, ranging from finance and energy to design thinking and change management.
Evan Cory and Charlie Cubeta, Tech Challenge co-chairs who organized the competition for the Haas Tech Club, said they received 108 team applications from 15 schools for the competition, a 25 percent increase over last year.
Competing teams included Yale, Kellogg, Columbia, Chicago Booth, MIT Sloan, UCLA, and Wharton. Eight Amazon executives served as coaches and judges.
Former Cisco CEO John Chambers and Xiaomi Chief Architect Baoqiu Cui will be among the industry leaders to speak at the fifth annual World Open Innovation Conference (WOIC), which will explore how business leaders can collaborate to digitally transform their organizations.
Speakers at the Dec. 13-14 conference, “Digital Transformation for Sustainability,” include Chambers, chairman emeritus of Cisco and founder and CEO of JC2Ventures; Cui, Xiaomi’s chief architect and vice president of artificial intelligence and cloud platform; Melissa Schilling, professor of management and organization at New York University’s Stern School of Business; and Scott Stern, professor of technological innovation, entrepreneurship, and strategic management at MIT’s Sloan School of Management. The conference will be held at the San Francisco Airport Marriott Waterfront.
Henry Chesbrough, faculty director of the Garwood Center for Corporate Innovation, will welcome the nearly 200 attendees expected this year. The conference is unique in that it unites industry leaders, innovators, and academic experts to discuss open innovation, a concept first defined by Chesbrough. Open innovation acknowledges that not all of the smartest people work internally at your company—and provides strategies to engage with experts worldwide outside of your organization to advance an innovation agenda.
“When we started the conference five years ago, we had no idea how quickly and enthusiastically our open innovation ideas would be embraced by both theorists and practitioners,” Chesbrough said. The open innovation concept has evolved over the years through new research, and has been adopted as a key pillar of European Union Commissioner for Research, Science, and Innovation Carlos Moedas’ agenda for EU innovation policies.
Open innovation applies to digital transformation—the shift of analog processes to digital—because it can be used to help reconstruct how business operates, Chesbrough said. In the analog world, processes were based on a “push” strategy for sharing information on the business’ schedule. In contrast, the digital world enables the on-demand “pull” of the right information to the right people at the right time. Conference attendees will consider how open innovation can solve real-world challenges businesses face when moving from the push to the pull flow of information.
A global focus will be reflected during the conference’s planned Corporate Challenge sessions, featuring companies from the U.S. (Allergan), China (Xiaomi), India (Wipro), Japan (Fujitsu), and Spain (Banco Bilbao Vizcaya Argentaria). Each company will pose a challenge—organizational culture, business model, intellectual property policy, or research-and-development—that will be solved hackathon-style. The challenge matches academics with industry professionals to form teams of approximately eight with an assigned moderator for most teams. The session’s conclusions will be published as white papers.
In addition, the call for academic papers for the conference produced more than 100 submissions. A total of 55 of these papers—all representing new research in the field of open innovation—will be presented at the event. Topics include blockchain, artificial intelligence, business model innovation, product development, digital transformation, ecosystems, platforms, and intellectual property.
Registration for the conference is required.
Should a growing East African solar power provider choose Benin or Nigeria as its foray into the West African market? That was the question a team of MBA students (and one UC Berkeley PhD student) answered to win the Energy in Emerging Markets Case Competition hosted Nov. 6 by the MBA Energy Club at Duke University’s Fuqua School of Business.
For the challenge, 34 competing teams from around the world pitched a go-to-market strategy that PowerGen Renewable Energy could use to decide where to expand its business. The competition required a team of three to five graduate students to compare the electrical infrastructure, regulatory environment, and competitive landscapes in Benin and neighboring Nigeria and recommend a strategy for one of those nations based on their findings.
The UC Berkeley team included Isa Ferrall, a PhD student in the Energy & Resources Group; Felix Schadeck, MBA 20; Hao Shen, MBA 19; Chandler Sherman, MBA 20; and Joe Swartley, MBA 19.
The team credits its win to assembling a diverse group. Understanding that primary research and real-world data on energy access in West Africa would be a challenge, Shen and Swartley selected a team of people with complementary backgrounds and broad networks.
“Our final presentation stood out because we did so many interviews with people working in the space, and we were able to test and evolve our strategy instead of sticking something speculative against a wall and hoping the judges would go for it,” Shen said.
In total, the team tapped more than 30 experts from their professional and UC Berkeley network—including contacts at Tesla, Facebook, Google, nonprofits, regulatory agencies, professors, and others.
Each team member also offered unique expertise.
Shen previously worked as a consultant at Deloitte’s power and utilities division and spent his MBA summer internship working in energy access in Uganda, while former impact investing consultant Schadeck had worked in energy and education in emerging markets in sub-Saharan Africa. Sherman brought regulatory knowledge from several positions at Tesla and SolarCity. Swartley, a former Bloom Energy senior marketing associate and d.light design intern, spent several years looking at financial models for renewable energy and examining customer willingness to buy electricity for the first time.
Ferrall, an engineer who has worked in renewable energy in Kenya and Tanzania, said it was fascinating to work with team members who understood how to finance solar projects and assess market potential.
“Their valuable feedback guided all of our recommendations,” Ferrall said.
“For me, this felt like a five-week master class in energy access for emerging markets,” Sherman adds. The team had to consider a very granular degree of detail during the competition: how material would be sourced; how solar equipment would be ferried to the ports; how workers would be hired; and what currency would be used, she said.
The team, after conducting its analysis, recommended Nigeria, concluding that an established regulatory environment and access to capital would have the most significant impact on PowerGen’s success in West Africa.
A panel from Cypress Creek Renewables, Duke Energy, Duke University, The Fuqua School of Business, NextEra Energy, PowerGen Renewable Energy, Plotwatt, Schneider Electric and Southern California Edison judged the UC Berkeley team the winner in the final round of four presentations. The team received $10,000.
The Berkeley Full-time MBA Program rose to #8 in Poets &Quant’s annual meta ranking of US full-time MBA programs, up one spot from 2017.
The Poets & Quants MBA meta ranking is based on five influential MBA rankings: US News, Financial Times, The Economist, Businessweek, and Forbes. Each ranking is separately weighted: U.S. News is given a weight of 35%, Forbes, 25%, The Financial Times and Businessweek are given a 15% weight, and The Economist, 10%.
Haas ranked #7 in both US News and the Financial Times, #9 in Forbes, #10 in the Economist, and #6 in Businessweek.
Haas ranked #9 in Poets & Quants in 2017, and #8 in the two prior years.
As one of the first female leaders in the global financial services sector, Margo Alexander, BS 68, spent four decades achieving exceptional success on Wall Street in the face of pervasive sexism. Now, she’s using what she learned as a financial powerbroker to cultivate entrepreneurs who serve the world’s poorest people.
“The social problems of the country are not just for the government to solve. And corporations have the levers…they can make that decision to improve [society],” says Alexander, who spoke candidly about her experiences with Interim Dean Laura Tyson in the final installment of the 2018 Dean’s Speaker Series this month.
Alexander retired in 2003 after 30 years at UBS/Paine Webber, in equity research, sales, trading and asset management, serving as chairman and CEO of UBS Global Asset Management 1995 to 2000 and chairman from 1999 to 2001. She then spent almost a decade as board chair of Acumen—a nonprofit committed to changing the way the world tackles poverty—where she continues to serve as chair emeritus.
She’s focused on helping entrepreneurs doing business in impoverished regions of Africa and South Asia—applying many of the same tactics she used to spot talent in the corporate financial sector. “I think being an entrepreneur is hard work anywhere. But imagine in a place where there’s no electricity, the water is intermittent, the workforce is uneducated…all of the resources that you would pull together as an entrepreneur to build an organization are somewhat rickety to start with,” she said.
“What we have found about our successes over time is the most important variable is the character of the entrepreneur. They’re operating in very difficult circumstances; there’s an enormous amount of corruption; and, if these people don’t stand up in an honest, ethical way, we’ll [withdraw our support].”
Alexander, who was recently honored with a Haas Lifetime Achievement Award, exemplifies the Defining Leadership Principle Question the Status Quo. Each time she entered into a new assignment and wanted to make changes, she took care to communicate to employees what would be in it for them. She would start by saying, “Here’s what I’ve learned about our group. Here’s what we need to do better. And here’s how we’re going to do it.” Then came the benefit: “It will improve our bonus pool.”
Her strategy was to link “the broader goals with the individual performance and what that would do in terms of the firm, the team, the individual.”
Alexander was one of just 27 women in a class of 800 to graduate from Harvard Business School in 1970. It took her two years to get her first job in finance. In her last semester, she signed up for several interviews. “You’d go in, and, frequently, they would say, ‘oh, I’m sorry, we don’t hire women.’ I said, ‘Oh, okay.’ So, then you leave. I’ve had women say to me, ‘What did you say to them?’ Nothing. I mean, it was just how things were.”
Alexander persevered through years of gender discrimination, and she believes strongly that women bring tremendous assets to corporate finance. “I actually think women can have an advantage in dealing with people. I think women are generally more open, more inclusive, and warmer.”
She had lots of advice when asked how to attract and retain top talent, especially entrepreneurs. First, she advocates for offering robust training programs and fellowships.
“When you get involved in hiring people, you’re not always right, but you get a feeling for what is it that motivates this person. Do they have ethical standards?,” she said. “I would say we do not have a magic box. But, when you find out you were wrong, we don’t sit around. We’re done.”
Watch Alexander’s full talk:
Renowned Wharton Economist and Berkeley Alumna Ann E. Harrison, BA 82 (economics and history), will begin her tenure as new Haas dean on Jan. 1, 2019.
Harrison is the William H. Wurster Professor of Multinational Management and Professor of Business Economics and Public Policy at the University of Pennsylvania’s Wharton School. Before joining the Wharton School in 2012, Harrison served as director of development policy at the World Bank.
Harrison has deep Berkeley roots. She’s been both student and teacher here, serving as a professor in Agricultural Resource Economics from 2001 to 2011. She joins an esteemed group of female economists who have made their impact on Haas, including Interim and former Dean Laura Tyson and Prof. Emeritus Janet Yellen, the former head of the Federal Reserve and now a distinguished fellow at the Brookings Institute.
In recent weeks, Harrison has been meeting with Haas faculty and staff, developing her priorities and vision for the school. She recently sat with Berkeley Haas News for an interview.
Haas: Could you tell us a little bit about yourself and your background?
Ann Harrison: I was born in France, and I came to the U.S. when I was 2 years old, grew up in the Bay Area in California, and went to UC Berkeley as an undergraduate. I am married to another economist who I met in graduate school. He’s originally from the Philippines, so we were married in Manila. We have two daughters: Alice goes to UC Santa Barbara, and Emily is a graduate student in art history.
In my free time, I love to hike all over California—in Point Reyes, at Inspiration Point in the Berkeley hills behind the university, and in the Sierra Nevada mountains.
Could you share a few career highlights? What award or research project are you most proud of?
One of my most precious moments was when I received a phone call from Berkeley asking me if I would be interested in a tenured professorship. I just remember how thrilled I was when I received that phone call. More recently, one of my happiest moments was when I received the Sun Yefang Prize, which is awarded by the Chinese Academy of Social Sciences for the best research in economics on China.
Tell us a little more about your experience at the World Bank and what you did there.
I started at the World Bank right after my PhD, and have spent time going back and forth between the World Bank and different academic positions I’ve held over the years. In my most recent role there, I served as director of development policy. The World Bank’s mission is to try to free the world from poverty. I have also worked with other organizations such as the United Nations on similar goals.
What do you think are some of the Haas School’s greatest strengths?
The school has a number of really important strengths. It’s defined by its unique culture and the four Defining Leadership Principles, which are helping to create students who care about becoming great business leaders, who go beyond themselves, who are confident without having an attitude, and who question the status quo. Berkeley is a phenomenal institution, and its location brings with it a tremendous entrepreneurial culture.
What do you see as some of its challenges?
As a public institution, we have a much more limited budget than many private universities, and that continues to be a challenge for the students, the staff, and the faculty. But we are so enriched by the generosity of all of our donors, including those alumni who made enormous contributions to create our new building, Chou Hall. Berkeley has a very loyal set of donors and alumni, and I really look forward to working with them in the years to come.
What will your key priorities be as you begin your deanship?
I am very honored to have been asked to serve as dean of Berkeley Haas. This is a dream come true for me. It is also my good fortune to succeed outstanding deans—such as Rich Lyons and Laura Tyson—who have done an amazing job in strengthening our school and placing it at the forefront of business education. I plan to build on their successes to make this great school even better.
As I begin my deanship, I have three priorities: One is to grow the faculty in certain key areas, which include entrepreneurship, data analytics, and green business. I also want to further integrate Haas into the Berkeley community by increasing the number of cross-school programs that we have. My third priority is increasing the diversity of the student body and the faculty. As you know, we have put together a new action plan, which will allow us to increase the diversity of our full-time MBA program. But the role of diversity and the importance of inclusion is something that permeates all our degree programs, and that is very important to all us.
Why did you decide to move to a dean’s role versus teaching and research?
All my life, I have enjoyed research and learning and writing, but I’ve also really enjoyed making a difference. Working at the World Bank was an important opportunity for me to be in the real world and to see governments change—such as lending the Indian government a billion dollars to help them clean up its rivers. As a dean, one is able to combine the joy of research and teaching with actually making change, so that’s an incredibly exciting opportunity for me.
This Veterans Day, we thank our Berkeley Haas student veterans for their service and for all they they contribute to our campus community.
“We’re delighted to have one of our largest classes of veterans studying at Haas this year,” said Interim Dean Laura Tyson. “Those who volunteer to serve their country feel a calling to do something beyond themselves. It makes veterans a perfect fit for Berkeley Haas since they embody our Defining Leadership Principle ‘Beyond Yourself.’ We are grateful for the leadership skills and the global perspectives our veterans bring to the Haas community, and we thank them for their service.”
We asked four student veterans to share what “Beyond Yourself” means to them:
Here’s what they had to say:
Veterans in the Full-time Berkeley MBA Program
Veterans in the Evening & Weekend Berkeley MBA Program
Berkeley Haas rose to #6 in Bloomberg Businessweek‘s Best B-Schools ranking of U.S.-based full-time MBA programs, the highest spot ever for the school in this ranking.
Businessweek‘s 30th annual ranking is based on surveys from almost 27,000 MBA students, alumni, and recruiters, along with data on compensation and job placement. Haas performed strongly this year in several categories, ranking #4 in entrepreneurship, #10 in starting salaries, and #10 in networking. Last year, the publication ranked Haas #11 overall.
Businessweek has significantly adjusted its ranking methodology over the past few years and made additional changes this year, noting the changes mean this year’s results are not directly comparable to prior years. Since 2015, the ranking has taken into account job placement and compensation, using data provided by the business schools and by alumni who are six-to-eight years post-graduation. That’s in addition to its customary poll of MBA employers and of the most recent graduating full-time MBA class (2018).
The publication asked employers, alumni, and recent grads to weight the importance of each of the ranking’s four categories/indexes. Based on the results, Businessweek weighted the four categories as follows to calculate schools’ overall ranking:
Compensation: 38.5%
Networking: 27.9%
Learning: 23.1%
Entrepreneurship: 10.5%
This year’s Businessweek Best B-Schools of U.S.-based full-time MBA programs is based on surveys of 10,400 students, 15,000 alumni, and 1,170 corporate recruiters, along with compensation and job-placement data from each school. A full global ranking will be published on December 11.
Last summer Hugh G. Martin, MBA 19, made his inaugural trip to Africa, where he worked to equip off-the-grid homes in Tanzania with solar power.
“A highlight for me was seeing the looks on families’ faces when they used a TV in their homes for the first time,” says Martin, who worked for ZOLA Electric, which aims to bring solar power to one million homes in Africa over the next few years.
Martin, who also traveled to Kenya during his internship, was among 13 students, all MBA 19s, who received summer internship stipends from the Haas Social Impact Fund (HSIF). Since launching in 2004, the fund has helped students interested in the social-impact sector close the gap between what they could have made at a corporate internship versus what they would make at a social-impact internship. Each applicant received $500 to $7,000 that could be used to pay salary, living expenses, or travel expenses.
Each spring the HSIF holds a fundraiser asking peers to donate one day of pay that they’d expect at a corporate internship, according to Kevin Phan, MBA 19 and the MBA Association’s vice president of community. Students raised about $25,000 this past spring.
Claudia Luck, MBA 19, spent her summer at Yellowstone National Park as a consultant, analyzing the impact an increasing number of guests are having on visitors’ safety within the park. Her project required the use of four park databases and interviews with dozens of stakeholders to help the park determine how to best organize the 100-plus members of its Visitor Resource Protection division.
Luck, who worked at Adobe as a client training manager before coming to Haas, said she interviewed rangers, emergency medical technicians, justice center specialists, detention center workers, and entrance station attendants to understand how an increase in visitors would impact the park workers’ time and resources.
“I just loved the idea of spending three months way outside of my box—pursuing my passion for hiking, seeing Yellowstone, and working for the government,” Luck says.
For Hannah Levinson, MBA 19, an internship kept her closer to Berkeley. She worked for consulting firm Third Plateau on a mission to refresh the San Francisco Unified School District’s Arts Education Master Plan. For part of her work, she held focus groups with underrepresented minority students in the Bayview and Mission districts to better understand their arts education needs.
Levinson said she took away a lot about how to conduct unbiased interviews and construct questions through her Third Plateau consulting experiences. “For example, asking a leading question gets a biased response,” she says. “I made a point of getting feedback after every interview, and it helped me to shape my questioning.”
More HSIF student internship stories are available on ImpactMBA, the Center for Social Sector Leadership’s Medium channel.
Fundraising and applications for the Haas Social Impact Fund will open in April 2019, headed by Midori Chikamatsu, MBA 20, incoming vice president of community. Donations to the fund are accepted year-round here.
On the corner of a bustling, working-class neighborhood in Mexico City, Maria González has run a small photography business for years.* Recently, she took out a bank loan to purchase a new digital camera and printer that enabled her to produce high-quality images and deliver them at a rapid speed. González’s clients noticed her improved service and spread the word—new customers flooded her store. A few steps down the same street, Andres Perez owns a bookstore that would benefit from renovations. While these improvements would presumably attract much needed customers, Perez refuses to take out a bank loan. He explains that bank loans are stressful, require too much paperwork, and are meant for people with money or assets.
Financial inclusion brings major benefits to individuals like González and entire economies. By allowing people to invest in their future, smooth consumption, and manage risk, access to and use of a range of financial services help reduce poverty and inequality. Yet, access to financial capital is often cited as a barrier to growth for microentrepreneurs in emerging countries. In these countries, 40 percent of formal micro-, small- and medium-size enterprises are financially constrained.
But, as Perez’s story demonstrates, unmet financial needs among microenterprise owners may also be a result of low demand for the formal financial services available to them. Despite the availability and benefits of loans through banks and microfinance institutions (MFIs) in Mexico, take-up rates of formal financial products among microentrepreneurs is often surprisingly low. For example, only 4 percent of eligible applicants take up the credit available to them from Mexican bank and MFI Compartamos Banco. A new report by the Institute for Business & Social Impact at the Haas School of Business, University of California, Berkeley, in partnership with the Mastercard Center for Inclusive Growth, surveys microenterprise owners clustered at the bottom of the pyramid in Mexico and investigates possible reasons for their disinterest in formal financial services.
The new report presents evidence that small business owners in Mexico prefer informal financial networks to the formal financial system. In the sample of more than 1,300 Mexican microentrepreneurs, over 75 percent do not consider borrowing from the formal financial system in times of economic need. Rather than take out a bank loan or MFI credit, more than two-thirds of these entrepreneurs would prefer to draw from their personal savings or borrow money from a friend or relative, and about 10 percent would sell belongings in exchange for cash. Interestingly, this is true among microentrepreneurs in the sample across all levels of education, suggesting that it is not lack of information or understanding that is compelling these small enterprise owners to avoid formal financial products.
The report goes further, inquiring what features of formal bank and MFI loans are unappealing to microentrepreneurs. Their aversion to collective loans stands out as an explanation. To guarantee high repayment rates, discourage risky projects, and increase accountability, formal banks and MFIs will often require microenterprise owners to apply for credit with a group of peers or neighbors. All group members would be penalized if the loan is not fully repaid. While collective loans are designed by banks and MFIs to increase credit availability to microentrepreneurs without collateral or prohibitively high interest rates, this design feature appears to discourage eligible borrowers in Mexico. Even in times of economic distress, the majority of Mexican microentrepreneurs surveyed would prefer an individual loan, citing as reasons personal responsibility for repayment, flexibility of credit to individual business dynamics, difficulty in meeting group eligibility requirements, and higher loan amount disbursed.
These results suggest that specific design features of formal bank loans and MFI loans intended to serve microentrepreneurs clash with their preferences, and inadvertently keep them on the periphery of the formal financial system.
Cell phones and digital technologies are likely to provide the platforms necessary to increase financial inclusion for microentrepreneurs in the informal and formal economy. The report finds that over three-fourths of microenterprise owners in the sample own a cell phone. However, only 14 percent of cell phone owners use their mobile device for business-related transactions. Mobile channels—perhaps developed by formal financial institutions—could be used to track transactions, customers, and revenue to determine eligibility for individual loans, as well as monitor credit dispersion and repayment rates. Targeted programming that encourages business-related cell phone usage and training could lead to efficiency gains and unleash potential for microentrepreneurs. The cell phone market in Mexico is projected to keep growing, providing opportunities for value-added services that have the potential to increase financial inclusion and market share for microenterprise owners.
These findings suggests that digital technologies might enable banks and other financial institutions to design better products that encourage microentrepreneurs to engage in the formal financial system. Indeed, mobile money and other forms of digital finance are likely to be the major channels for accelerating progress on financial inclusion in Mexico and other emerging market economies. Of course, in addition to technology, there are various factors that influence a microentrepreneur’s demand for a loan, including low trust in formal banks and the government, fear of debt, sensitivity to interest rates, and lack of information.
To facilitate smooth transactions between banks and microentrepreneurs, banks must be familiar with microentrepreneurs’ business profiles, characteristics, and motivations. The report points out that microenterprise owners in Mexico vary significantly with respect to their level of education, number of clients per week, volume of sales, and amount of loans received in the past year. These findings indicate that it might be possible to determine the demand for financial products by individual microentrepreneurs based on their level of education or the size of their business.
As financial inclusion increases, some microentrepreneurs may be especially well positioned to benefit. The report proposes a framework to identify and classify this particular category of microentrepreneurs, termed “strivers” by the Mastercard Center for Inclusive Growth. Strivers are operating enterprises with two to 10 employees in rapidly growing market segments. They are poised to thrive and contribute to inclusive employment and economic growth within their communities, but are lacking the tools to increase their competitiveness and fully realize their business potential. The majority of respondents (60%) surveyed in the report are strivers by this definition.
Strivers, like most of the microentrepreneurs in the sample, prefer informal and individual loans, and are likely to own a cellphone. For strivers in Mexico, mobile devices may serve as important tools for information, training, and capital that lead to growing market share. The majority of the Strivers in the sample chose to be entrepreneurs over pursuing formal jobs; have a distinct sense of agency in their lives; and, as a result, believe that they have more control over their business outcomes.
This report provides an initial window into the lives and decisions of microentrepreneurs and strivers in Mexico. It highlights their need for credit to stimulate growth; specific barriers that keep them from taking-up loans from formal financial institutions; and the potential for mobile phone technologies to increase their engagement with these institutions. Impact-oriented design and evidence-based evaluation of financial products tailored to the needs of microentrepreneurs have the potential to vastly increase financial inclusion in emerging economies around the world. Bold approaches are necessary to realize the vision of sustainable growth for this promising segment of the economy.
*Names have been changed to maintain anonymity.
Laura D. Tyson is Interim Dean of the Haas School of Business and Faculty Director, Institute for Business & Social Impact, University of California, Berkeley.
Byron Villacis is a PhD candidate, University of California, Berkeley.
Margo Alexander, BS 68, the retired CEO and chairman of UBS Global Asset Management who blazed a trail for women in the financial services industry, was honored with a Lifetime Achievement Award at the 17th annual Haas Gala November 2.
The award recognizes members of the Berkeley Haas community who have achieved prominence in their fields. Alexander is the seventh person to be given a Lifetime Achievement Award from Haas, and its first female recipient.
During her career, Alexander was one of the first women to head a large asset management business. She was also the first woman to head a top-ranked research department and to oversee a major trading floor—doing it all while raising two sons with her late husband, Robert.
Haas Interim Dean Laura Tyson underscored the tenacity required to break those glass ceilings. “When Margo began her career, the behavior toward women in the financial services industry was appalling,” Tyson said. “She was able to handle difficult situations, successfully working with men and always trying to mitigate inequities by hiring and supporting women. As she moved through the ranks, she was able to influence how organizations behaved in those arenas.”
Her influence on employees was profound. “She changed the DNA of the firm,” said Mary C. Farrell, whom Alexander recruited and who retired in 2005 as chief investment strategist for UBS Wealth Management, USA, and co-head of the Wealth Management Research department. “She ran a trading desk full of young guys who said, ‘I’ll never work for a woman.’ Within a year they were saying, ‘Margo is the best!’ She had an extraordinary ability to connect with anyone.”
After retiring from UBS in 2003, Alexander joined Acumen, a global nonprofit changing the way the world tackles poverty by investing in sustainable businesses, leaders, and ideas. Alexander served as board chair for nine years of Acumen’s first decade, and, as chair emeritus, continues as a board member.
Alexander’s traditional financial services expertise complemented Acumen’s social impact mission, said Tyson. “She played a pivotal role in building Acumen’s model.”
To date, Acumen has invested $110 million to build more than 102 social enterprises in countries including Uganda, Kenya, Ghana, Pakistan, India, Colombia, and the U.S. These companies have created and supported 60,000 jobs and brought basic services like affordable education, health care, clean water, energy, and sanitation to more than 200 million people.
Alexander also extends her wisdom and support to Berkeley Haas. She has helped to boost the number of female students at Haas and to create Haas’ Institute for Business & Social Impact. She is on the senior advisory board for the Center for Responsible Business and has served on the Haas School Board since 2001.
Three other alumni also received awards at the Gala. Brett Wilson, MBA 07, received the Leading Through Innovation Award. Wilson revolutionized digital advertising by making it more simple, accountable, and transparent as co-founder and CEO of TubeMogul.
Wilson began the company with fellow student John Hughes, MBA 07, in an entrepreneurship class at Haas. The two grew the company into a tour de force, named one of the fastest-growing companies by Inc. and Deloitte and among the best places to work by Fortune, the San Francisco Business Times, and Glassdoor. They finally sold two years ago to Adobe for $540 million. Wilson now serves as Adobe’s VP of advertising and joined Adobe’s board of directors this year.
Also at the Gala, the annual Raymond E. Miles Alumni Service Award was presented to Abbey Breshears, MBA 15, and Brandon Doll, MBA 14, for their outstanding service to the MBA Worldwide Admissions Volunteer Effort (MBA WAVE) at Berkeley Haas.
A team of Master of Financial Engineering (MFE) students took first place in “The Data Open” this month, besting 25 teams who competed across UC Berkeley in the regional data science competition.
The winning team—Li Cao, Pierre Foret, Teddy Legros, and Hosang Yoon, all MFE 19—won $20,000 in the competition semi-final, sponsored by Citadel LLC, a global asset management firm, and operated by data scientist recruiting firm Correlation One.
The Berkeley Haas semi-finalists will travel to the New York Stock Exchange later this fall to compete against top universities for a $100,000 grand prize.
The Sept. 8 competition asked teams to solve a complex problem by analyzing complex data sets.
More than 400 students across UC Berkeley applied to participate, and 100 were accepted. Event organizers grouped the contestants into teams, many of whom—including the winners—had not worked together before.
Choosing a question
The night before the event, the teams were given a description of data sets—data that applied to everything from 311 calls in New York state to restaurant inspection data. The teams were challenged choosing a question and finding the answer in the data.
“Most data science competitions focus on achieving the best possible score for a predefined metric,” Foret said. “In contrast, we had to come up with our own question, which is a lot closer to the type of problems a data scientist has to tackle in the industry.”
The team outlined two goals: identifying the top factors that influence public health in New York state and providing local government officials with policy recommendations based on their analysis.
Working through the night, they prepared code that allowed them to test their hypotheses quickly, so they were able to spend most of the competition time running experiments, analyzing the data, and choosing the most relevant problem to solve.
Legros said their data analysis tracked factors that affect residents’ health, including both traditional socioeconomic ones and several lifestyle considerations—such as smoking habits, eating habits and living conditions—that evolve over time. “Next, we identified clusters of regions where some of these determining lifestyle factors are more dominant. This can help policymakers develop regional proposals to improve the health of residents.”
“It was one of the most intense 24 hours I have spent,” Yoon said. “While the competition itself was short, I really learned a lot from our preparation.”
The judges, announcing the winner, said they impressed by the originality of the team’s question and the strategy to focus on comprehensive view of the factors involved.
What goes through a gambler’s mind after she’s placed her bet?
It’s not just the anticipation of a big payoff, or doubts about the wisdom of her bet. It’s also regret about previous bets, both won and lost, according to UC Berkeley neuroscientists.
“Right after making a choice and right before finding out about the outcome, the brain is replaying and revisiting nearly every feature of what happened during the previous decision,” said senior author Ming Hsu, an associate professor in the Haas School of Business and Helen Wills Neuroscience Institute at UC Berkeley. “Instead of ‘I just gambled but maybe I shouldn’t have,’ it is, ‘Last round I gambled and that was a really good choice.’ Or, ‘I played it safe last time but should have gone for it.’”
The UC Berkeley study is one of a small but growing number of studies that record fast human brain activity – a thousand measurements per second – to reveal the complex array of operations underlying every decision we make, even those that may seem trivial.
The researchers focused on the brain’s orbitofrontal cortex, long-known to be involved in reward processing and social interactions. Indeed, it was one of the main sites of damage in the well-known case involving 19th century railroad worker Phineas Gage, whose left frontal cortex was destroyed after an explosion drove an iron bar through his head. The damage altered his personality, making him impulsive and uninhibited – seemingly a man who didn’t regret any act, no matter how disastrous the outcome.
In recent decades, the orbitofrontal cortex has been shown to be involved in how people value their choice options, how much regret they felt, how much risk they were taking and how valuable their choice was, all of which guide future choices or help someone appraise how good or bad the outcome was.
As shown in this study, however, the orbitofrontal cortex spends much of the time replaying aspects of past decisions. In particular, when people play a gambling game, the main driver of activity in the orbitofrontal cortex is the regret they feel from losing or the regret, after winning, of not having bet more.
“It turns out that the most prevalent information encoded in the orbitofrontal cortex was the regret subjects experienced from their previous decision,” said first author Ignacio Saez, a former UC Berkeley postdoctoral fellow who is now an assistant professor at UC Davis.
With the ability to recognize the pattern of activity associated with regret, the findings could open the door to assessing how well the regret circuits in the brain operate in people with brain injuries or those with behaviors that suggest the absence of regret, including some politicians.
While developing a sophisticated algorithm requires technical expertise, leading a successful business analytics project can’t be done without paying attention to people. That’s the theme of the inaugural Berkeley-Fisher Center Summit for Business Analytics, to be held at the California Memorial Stadium on Sept. 27.
The new event, which is free and open to the Haas community, will explore how data-driven technologies like artificial intelligence (AI) and machine learning (ML) affect people in the workforce, and how organizations can align people with processes to drive the success of analytics initiatives.
“Many business analytics initiatives fail, and our research shows it is due to misalignment with people in the workforce, rather than issues with the technology,” says Gauthier Vasseur, executive director of the Fisher Center for Business Analytics, which is part of Berkeley Haas’ Institute for Business Innovation. “Part of our mission is to educate management, finance and operations leaders on how to help their people become supporters of business analytics projects.”
The event, which kicks off with a dinner gala and awards ceremony on the evening of Sept. 26, is expected to attract an audience of about 100 students, industry leaders, alumni, and faculty to share experiences, learn from the latest research and real-world case studies, and network among peers.
“This summit is Berkeley Haas’ first big event around business analytics, and it matches thought leaders from the private sector with academic researchers and talented students who can join together to solve the biggest business challenges,” Vasseur says.
Vasseur shared an example of what happens when an organization overlooks the importance of people. A manufacturing company wanted to use AI and ML technology to solve a very expensive problem: the lost time and productivity that occurs when a machine stops working due to a broken or worn-out part.
The company built a highly sophisticated predictive-analytics platform to assess when parts needed to be replaced. The technology worked very well, but the maintenance workers didn’t trust the predictions and opted against replacing the recommended parts. The problem was that no one had considered their expertise and input, and the company had not shared enough information to earn their confidence in the new technology.
“In the end, the platform provided no benefit to the manufacturer, despite the significant investment and the accuracy of the technology,” adds Vasseur. “Our goal is to give businesses the research findings and tools to avoid these situations.”
Launched this year, the new summit reflects how Berkeley Haas has evolved its focus, research and curricula to address one of today’s most urgent business needs: analytics expertise. Formerly known as the Fisher Center for IT and relaunched last February, the center has held conferences for the past six years, focusing on the changing role of the chief information officer (CIO) and recognizing innovative CIOs with an award. This year’s event continues the tradition of presenting the Fisher-Hopper CIO Lifetime Achievement Award and introduces two new award categories: Excellence in Driving Transformation Award and Business Analytics Woman of the Year.
This year’s Fisher-Hopper CIO Lifetime Achievement Award goes to David E. Smoley, CIO of AstraZeneca, a global, science-led biopharmaceutical business. At the summit, he will share how he led a performance turnaround that reduced drug development cycle times while reducing IT spending by more than $800 million (48 percent) over three years.
Other awards include the Excellence in Driving Transformation Award, which recognizes The Boeing Company’s CIO and Senior Vice President Ted Colbert, and the Business Analytics Woman of the Year Award, which honors Hewlett Packard Enterprise’s Global Vice President for Big Data, AI, and Innovation Beena Ammanath.
Vasseur says the goal of the summit is to put data analytics into an actionable context that comprises data, people and processes for business success. Speakers will help unpack what AI and ML are, and how these technologies can be most effectively applied when including people’s support in their design.
Speakers include Haas faculty members Thomas Lee, associate adjunct professor and director of data science at the center; Andreea Gorbatai, assistant professor in the Management of Organizations Group; and Gregory La Blanc, distinguished teaching fellow with the Finance Group. Additional presentations by industry leaders include:
Tickets for the Sept. 26 dinner gala are still available here for a donation of $250 or more. The Sept. 27 summit is free to all who register at the bottom of this page.
A group of top executives and economic and government leaders will explore India’s growing role in the global economy at the third annual US-India Conference to be held this Friday at Berkeley Haas.
Speakers at the Sept. 7th conference, “A Transforming India: Tapping Growth Opportunities,” include John Chambers, chairman emeritus of Cisco and founder and CEO of JC2Ventures, Ambassador Venkatesan Ashok, the Consul General of India in San Francisco, and Dr. Eric Goosby, UCSF professor of medicine and the UN Secretary-General’s special envoy on tuberculosis.
UC Berkeley Chancellor Carol Christ will welcome conference attendees. Prof. Catherine Wolfram, acting associate dean for academic affairs at Haas, will also speak before the group breaks for panel discussions. Jay Stowsky, senior assistant dean for Instruction at Haas will moderate a panel on trade and Prof. Toby Stuart will moderate a panel on entrepreneurship.
America’s role in India’s economy is growing, but companies have only scratched the surface of the broad range of economic opportunities available, said Solomon Darwin, executive director of the Garwood Center for Corporate Innovation at Haas.
“The size of the Indian economy, its high growth rate, and the country’s high caliber of technology talent present a huge worldwide economic opportunity,” Darwin said.
The day’s sessions will cover India’s goal to become a $1 trillion digital economy over the next few years; the opportunities within the booming healthcare sector; navigating growth partnerships at a time of escalating trade wars driven by the U.S.; and tapping into India’s startup and venture capital environment.
The conference, to be held at Spieker Forum in Chou Hall, will conclude with a networking high tea.
The event is co-sponsored by the Garwood Center for Corporate Innovation and the All India Management Association.