Dean’s Speaker Series: Sal Khan on how ‘delusional optimism’ led to free, world-class education for anyone, anywhere

man on a large video screen speaks to students at Haas
Khan Academy CEO and Founder Sal Khan traced his journey to provide free and accessible online education to kick off the fall  Dean’s Speaker Series Sept. 19.

With more than 150 million users in more than 190 countries since its founding in 2008, nonprofit Khan Academy has become an educational staple for students and instructors alike. 

Khan Academy CEO and Founder Sal Khan traced his journey to provide free and accessible online education during the first fall Dean’s Speaker Series talk Sept. 19. 

After graduating from Harvard Business School in 2003, Khan worked as a hedge fund analyst, having told his friends “I’m going to do this long enough so that I could become independently wealthy.” Around the same time—having always been passionate about education—he began tutoring his cousin over the phone using an interactive notepad. From there, Khan expanded his lessons to include family and friends, even writing software to create deep item banks—databases of questions—to help them practice. 

With advice from a friend, he began incorporating video, uploading his lessons to YouTube—and by 2008, Khan Academy reached almost 100,000 users. Even with the nonprofit’s initial traction, however, Khan noted the risks that come with starting any new business. 

“I think anytime you do anything entrepreneurial—for-profit or nonprofit—you have to start with that delusional optimism. You assume that surely the market, the investors, the philanthropists, whatever, whoever the stakeholders are, they’re going to recognize the value of what you’re creating. And oftentimes, it doesn’t happen as fast as you think,” Khan said. 

I think anytime you do anything entrepreneurial—for-profit or nonprofit—you have to start with that delusional optimism.

Despite receiving offers from venture capitalists, Khan turned them down to maintain control and ensure his organization remained free and accessible. Nine months later, current Khan Academy Board Chair Ann Doerr made an initial donation, which led to a lunch meeting and eventual working relationship.

After Bill Gates talked about his own kids using the platform at the 2010 Aspen Ideas Festival, Khan had another meeting to discuss ways to support Khan Academy’s future. This, coupled with more funding from Google, allowed Khan Academy “to become a real organization,” Khan said.

Since then, Khan Academy has expanded to include more than 70,000 practice problems with translations into more than 50 languages. The nonprofit is also partnered with upward of 500 school districts, even having its own accredited schools: Khan Lab School in Silicon Valley and Khan World School, a partnership with Arizona State University. Now, Khan Academy is launching Khanmigo, an AI educational chatbot, to help instructors and students understand how to use AI to support learning. 

In terms of running and scaling a nonprofit with an impact like Khan Academy, Khan cited the importance of teams maintaining a clear mission. 

If you can grow and maintain your talent and your alignment, a 300-person team can outperform a 30,000-person team.

“The hardest thing is, as you grow, to maintain alignment. If you can grow and maintain your talent and your alignment, a 300-person team can outperform a 30,000-person team,” Khan explained. “Alignment is not just communication. And this is a muscle that I don’t think people in Silicon Valley exercise enough—being very clear with team members: ‘Look, this is what we’re doing. If you’re excited about that, awesome. If you’re not, this might not be the place for you.’ That is kind of strong language, but I have found it to be very powerful language because otherwise people are just trying to pull (the organization) in all sorts of different directions.” 

Watch the full DSS talk below.

Read the full transcript:

– Good afternoon, welcome. I’m Don Moore, acting dean here at the Haas School of Business. I’m thrilled to welcome all of you to the first Dean Speaker Series of the year. Today’s guest, as you know, is Sal Khan, founder and CEO of Khan Academy. Sal holds two bachelor’s degrees of science and a master’s in electrical engineering from MIT and an MBA from a school called Harvard Business School, which you may have heard of. Sal became passionate about education while he was an undergraduate at MIT. He developed math software for children with ADHD and tutored fourth- and seventh-grade public school students. While working as a hedge fund analyst in 2004, Sal began tutoring his young cousin in math over the telephone with an interactive notepad. Within a couple years, he added more than a dozen relatives and family friends to his online classes. In 2008, he founded Khan Academy with a mission to provide free, world-class education for anyone, anywhere. Khan Academy now partners with more than 500 school districts and schools across the United States to help teachers tailor instruction to each student. Khan Academy is now used in more than 190 countries. There are more than 150 million registered users around the world and translations into more than 50 languages. Today, Khan Academy’s platforms include more than 70,000 interactive practice problems, as well as videos and articles that cover a range of subjects from pre-K to 12th grade. Khan Academy is piloting a new tool called Khanmigo, which gives students an entirely new way to use AI to learn. He also wrote a book, The One World Schoolhouse where he presents his radical vision for the future of education with a goal of leveling the playing field for access for all to world-class education. Thanks, Sal, for taking the time to join us today and to talk with us about your work. Now I’ll turn it over to today’s moderators, MBA students Anu Tej and Mrudula Vemuri.

– Thank you for that introduction. I’d like to just introduce myself one more time. My name is Mrudula Vemuri. I’m an EWMBA class of 2024. And I’d also love to share my first story using Khan Academy. I was desperately in need of help with my calc homework, and I had a calc final looming in college, and I turned to Khan Academy, and it hasn’t failed me ever since. Even through my macro and finance courses here at Haas School of Business, I’ve used Khan Academy, and it’s helped me all along the way, so I can’t wait to see what they have in the future.

– OK, I am Anu and I’m a full-time MBA class of 2024. I first learned about Khan Academy just after my undergrad. I had joined this early stage startup, and I was given a task to do data analysis, and I had no idea how to do it, and one of my teammates came to me and said, “Oh, you might want to check out Khan Academy for some of the concepts.” And I started with high school statistics that night, and I was like, “Oh my God, I needed this in college. I needed this in high school.” All this while I thought I suck at statistics, I did not. I was able to do that analysis that I did; and like Mrudula, I was able to pass my macro economics last year because of Khan Academy. Thank you so much for helping us. So I want to start,

– [Sal] Always good to hear the stories.

– I want to start with the origin story, Sal. I know you were tutoring students during your high school, and I also know that you will tell your friends when you are working in a hedge fund that ‘I want to work in hedge fund long enough to start my own school someday.’ So tell us more.

– Yeah, first of all, thanks for having me here, and as I said, always great to hear y’all’s stories. Yeah, I’ve always had this interest in education. I think going back to maybe even elementary school where we all had good moments in our education experience; and then we all had some not-so-good moments. And usually, some of those not-so-good moments are feeling a little bit bored or feeling disengaged or seeing some of your friends bored or disengaged. And so I’ve always been fascinated that there’s got to be a better way to do this. Anyway, you fast-forward to, I graduated from undergrad. My first career was in tech. Then after that, I go to business school. After business school, I find myself, I’m at a small hedge fund in Boston at the time, and I graduated from business school in 2003, and it’s now 2004. I had just gotten married. My family was visiting me up from New Orleans, which is where I was born and raised up in Boston. And even before that, actually, to answer your question directly, when I was working at the hedge fund—and this is what I did tell myself—but I would tell my friends who were like, “Well, what’s your lifelong goal?” I was like, “Well, I’m going to do this long enough so that I could become independently wealthy,” which I have not achieved, but I did the other, well, the thing I wanted to do after I wanted to be independently wealthy, so I can start a school on my own terms. I thought that would be the most fun thing to do, to be one day, be like a Dumbledore-type figure, but once again, in some ways have to convince anyone that, and we could talk more about, there’s some benefits of having to convince people things. But when it became clear that my cousin Nadia needed help, she didn’t even know that she needed help, but I knew that she needed help. She was in seventh grade, and she was put into a slower math track, which had all sorts of potential negative implications for her future. I offered to tutor her remotely when she went back to New Orleans. She agreed. And so, yeah, we got on the phone. We used to use instant messenger at the time to just communicate. We could see each other’s writing, et cetera. Slowly but surely, she got caught up with her class, even ahead of her class. At that point, I become what I call a tiger cousin. I called up her school, I said, “I really think Nadia Raman should be able to retake that placement exam from last year.” They said, “Who are you?” “I’m her cousin.” And they let her take it. And the same Nadia who was being tracked into a remedial track was now put into the advanced track. 

So I was hooked. I started tutoring her younger brothers, Armand and Ali, and it was working with them, and word spreads in my family, free tutoring is going on. So before I know it, there’s 10, 15 cousins, family friends that I’m tutoring on a regular basis. My day job, I was at the hedge fund, but markets close. I’d get on conference calls with, for the most part, my cousins, a few family friends.

But that’s how I started, and I was enjoying it. I was connecting with family, but I was also, I believed that there’s a way of approaching a lot of this subject matter that could be very intuitive and even enjoyable for my family. I also saw that there was a common pattern, and I saw this pattern throughout my education. The reason why folks struggle isn’t because they aren’t bright. It isn’t because they don’t have good teachers or they’re not hardworking. It’s usually because they have gaps in their knowledge. And by the time you get to an algebra class, it’s really hard to address those gaps of, say, dividing decimals or negative numbers. And those gaps happen in a traditional system because kids just keep getting moved ahead, even if they get a 60 or 70 or 80%, or they forget stuff. So that’s when I started writing some software for my cousins, too, ’cause I honestly couldn’t find any good practice on the internet at the time. This was back in 2004, 2005. Because I wanted them to get as much practice as they need. So I was creating these very deep item banks that were partially computer generated, et cetera. And that was the first Khan Academy. It had nothing to do with videos at the time. 

Then in 2006, by this point, we had moved out to the Bay Area. I was at a dinner party showing off the software. I’m a super cool dinner party guest, and the host of the dinner party, his name’s Zuli, I have to give him full credit. He said, “Well, this is cool, Sal, but how are you scaling your lessons?” And I said, “Yeah, it’s hard to do with 15 cousins what I was originally doing with just a handful.” And he said, “Well, why don’t you make some videos, upload them onto YouTube for your family?” I told him, “That’s a horrible idea. YouTube is for cats playing piano. It’s not for serious math.” But I got over the idea that it was not mine. And I gave that a shot. And that took on a life of its own, obviously. My cousins famously told me they liked me better on YouTube than in person. I think what they were saying was that they enjoyed having an on demand, not feeling shy, not feeling embarrassed. If it’s 11 p.m. and they had a question, they could access it. I believe they still enjoyed being able to get on the phone with me to go a little bit deeper. But then a lot of other people started discovering it. And then by 2008, there were about 50 to 100,000 folks using it on a monthly basis. And that’s where I incorporated it as a not-for-profit, a mission-free, world-class education for anyone anywhere. 2009, I frankly had trouble focusing on my day job. We had some savings at this point. My wife was a medical fellow, so she was still in training. Our first child had just been born, so our expenses were going up, but we were saving some money for a down payment out here in the Bay Area, which we all know is not a joke, even back in 2009. But we felt, well, maybe if we give it a year, hopefully someone will fund this philanthropically. So that’s when I took the plunge, and that first year wasn’t easy, but eventually, it worked out.

– Well, thank you. I know that I have personally shamelessly rewinded many, many videos. In my personal experience interacting with Khan Academy, I noticed that there’s a huge breadth of topics. Were you familiar with all of these topics before the beginning of Khan Academy? And if not, how did you teach yourself so many different things?

– Great question. The simple answer is no. I think that there, with that said, well, I can surprise folks with my breadth. Let me just say that I’m definitely above average. But there’s certain topics that I did know very, very well, math being one of them. I would say math and physics and some other parts of science I knew very, very well where I could kind of get into it. I didn’t need necessarily a reference or a textbook. 

With that said, once Khan Academy became a more professionalized organization and we wanted to make sure we covered all of the standards, we now have a team who’s curating the questions and figuring out the scope and sequence and instead telling me, “Hey, they’re using a different term nowadays for,” I mean, the most famous example is when I was in school, it was called atomic weight. Now it’s average atomic mass. Or let’s redo a video. So there’s definitely support now, but in those early days, but even now, I take joy; and maybe there’s folks in this room who feel the same way that if you learn to learn something well, that that is actually a very transferable skill to almost anything. And it goes against what I think most people are indoctrinated into in school. My biggest pet peeve is when I hear someone say, “I’m a math person,” or “I’m a humanities person.” And unfortunately, you’ll sometimes hear it from educators. In fact, you’ll almost always hear it from, you want to give a math teacher anxiety, ask them to engage in the humanities, or you want to give humanities teacher anxiety, ask them to engage in math. And even at a high school level, like, you graduated from high school, right? Like, this shouldn’t be something… So unfortunately, I think sometimes that not optimal signaling happens to students. 

But I think generally speaking, if you learn to understand something really well in any domain and you build that muscle of, like, asking the right questions: Wait, how does A lead to B? I’m not just going to take it as a leap of faith. I need to understand it, prove it to me. How does this make intuitive sense? You can take that to almost any domain. And I’ve always been, some of the subjects in Khan Academy are things like history, and I’ve always really been fascinated by history. I don’t have any formal training in it, but I’ve been fascinated both on just, like, these are real human stories that happened. How can it not be interesting? But then also I’ve always been sometimes frustrated on not being able to place things in time and space and seeing timelines and things like that. So I’ve tried to take that tack and when we try to cover some of that on Khan Academy, and we’ve gotten positive feedback. And then there’s certain even science topics that, when I took it in college, I took organic chemistry in college. It was not a class where I was like, “Oh, this makes intuitive sense.” I got through the class, I got a fine grade, I did what I needed to do, but I didn’t get out of that class thinking like, “Oh, I see the beauty in organic chemistry.” So when it was almost, as a challenge, some of those organic chemistry videos are still up there on Khan Academy. When I did this almost 10 years ago, I said, “Before I even press record on that first video, I’m going to just sit and immerse myself in organic chemistry for several weeks until I learn to love it, until I learned there must be an intuition behind it.” And there is and actually, it all boils down to electronegativity, actually. You don’t have to memorize as many mechanisms as you think. And I would call up friends and stuff like, “Explain this to me. Why is this happening?” And someone would say, “No, we don’t know. That’s an area of research.” I was like, “Well, someone should tell the students that too, so they don’t bang their head on a table and they’re like, I’m actually trying to figure out an area of open research.” So yeah, I don’t know it all, for sure. And I do use Khan Academy when I’ve already made 80 videos in a certain course and they want an 81st. I sometimes have to watch some of the videos that I already made in order to get up to speed.

– Oh my God, thank you so much for that. Can you tell us, I mean, you briefly took us through from your undergrad, to, like, starting of Khan Academy for your cousins and, like, the whole journey ’till today? But can you tell us what would you consider your first big break in your life? This can be before Khan Academy or after.

– Oh, big break. Oh, so many breaks. I’ll give you more than one. Probably the first is when I was in second grade, my older sister was three years older than me, and she was, like, the star student. She was in the gifted program. I thought I was in the gifted program because they take you out; they took me out of class every day into some kind of enrichment thing. It turned out it was speech therapy. So I was being in a different, I was put in a different category than my sister, but because I was Farah’s younger brother, I think the school said there must be something there. And so they kept testing me. And so the first break was I went from speech therapy into this kind of gifted enrichment program that they had. It was Louisiana Public Schools, not famous, but it was a really good program. I still remember that first day, 7 years old, I walked into a classroom, unlike any other classroom I had ever seen, there were just, like, five or six kids in the room. Some kids were playing chess, some kids were drawing, some kids were playing “Where in the World is Carmen Sandiego?” And there were two teachers. I mean, it was well-resourced if you really think about it in hindsight. And they’re like, “Oh, Sal, come on in.” And I walked up to both the teacher’s desks and they said, “Oh yeah, so what are you into?” And I said, “Well, I really like drawing. I really like puzzles.” And so they’re like, “OK, so we’ll draw and do puzzles.” And I didn’t even want to tell anyone about this thing ’cause I thought it was some type of, like, secret racket going on inside of my school that would be taken away from me if people knew what it was. But that I consider a break because one, that opened my eyes to what school could look like if everyone was really engaged and interested. And I think most of my memories from elementary school are that, so it had a real impact on me. 

I mean, there’s a bunch of other breaks. I would say another, I’ll give my sister credit. When I was in, we didn’t have a lot of money, raised by a single mother. My mom was essentially making minimum wage eventually. And I remember when my sister was applying to college and I asked her, “What’s your first choice?” She said, “Brown University.” And I said, “You’re nuts. Brown University’s tuition is twice what our mom makes per year. Like, there’s no way that you’re going to Brown University.” And then my sister explained to me about financial aid and this and that. And my sister got in and was able to go. I mean, she still had some significant debt, and I think it’s gotten more generous since then, but it was very generous. It’s much better than what we thought it would be. So, that I considered a break of sorts ’cause that opened up my aperture to what’s possible. 

You fast-forward, I mean, I’ll give a couple, well, I’ll fast-forward to the Khan Academy ’cause I think there was a big break there, which is, I talk about quitting my job. Me and my family are now living off of savings. I think anytime you do anything entrepreneurial for-profit or nonprofit, you have to start with that delusional optimism. You assume that surely the market, the investors, the philanthropists, whatever, whoever the stakeholders are, they’re going to recognize the value of what you’re creating. And oftentimes, it doesn’t happen as fast as you think. When I quit my day job, I was talking to some philanthropists, but very quickly, those pitted out. They really didn’t know what to make, how to make sense of what we’re trying to do at Khan Academy. And about nine months into that, it was stressful. I was waking up in the middle of the night. We were digging into our savings, about $5,000 a month. It was quickly not a down payment on a house anymore. And I was really questioning every, I’d given up a good career that I, for the most part, enjoyed. And then it was, yeah, about nine months in, all of a sudden, a $10,000 donation came in. I immediately emailed the person, her name is Ann Doerr. She’s now our chairperson. But at the time, I said, “Dear Ann, thank you so much for this incredibly generous donation. This is the largest donation Khan Academy has ever received. If we were a physical school, you would now have a building named after you.” And Ann responded back and said, “Well, that’s surprising to me. It’s actually surprising to me you’re a one person operation. I thought this was, like, a real thing. I see you’re in Mountain View. I’m in Palo Alto. I’d love to have lunch and learn more about what you’re doing.” So we have lunch, and Ann kind of asked me, “What’s your goal?” I said, “Look, I filled out free, world-class education for anyone anywhere.” And says, “Well, that’s ambitious. How do you see yourself doing that?” And I said, “Well, I’m building out all these exercises, videos, I’m going to go into all subjects, all grades, all and all this practice software to allow kids to learn at their own time and pace. I had already started building some teacher tools so the teachers could keep track of it. I had a notebook of testimonials from around the planet.” I said, “Eventually I want to localize this into languages of the world.” And Ann said, “Well, that’s ambitious, but how are you supporting yourself?” And I told her in as proud of a way as possible, I said, “I’m not.” And she kind of processes that. She pays the bill, and then we part ways. And about 10 minutes later, I’m driving into my driveway in Mountain View and I get a text message from Ann and it says, “You really need to be supporting yourself. I’ve just wired you a hundred thousand dollars.” So that was a good day a little bit. So that was great…

I’ll list one more ’cause the story only gets crazier. About two months after that, this is now about May of 2010, I want to say, or maybe June. I’m running a summer camp ’cause I never thought online is a replacement for physical. I always thought online could be a liberation of the physical, so you could do more games and simulations and things like that. So I was literally running a trading floor of seventh graders, and I start getting text messages from Ann, which you can imagine I now take very seriously. And there were five or six text messages that were coming. It was a little bit disjointed, but Ann was essentially writing, this is Ann writing, “I’m at the Aspen Ideas Festival. I’m in the main pavilion. Bill Gates on stage last five minutes talking about Khan Academy.” So I didn’t know what to make of this. And y’all can look, if you do a web search for like Bill Gates, Aspen Institute, Khan Academy 2010, you should find this video. But I found this video when I boot, I booted a seventh grader computer, and I found a delayed broadcast or a recording of it where Walter Isaacson asked Bill Gates, “What are you excited about?” Open question. And Bill Gates just, “There’s this guy Sal Khan. He’s got this website, Khan Academy. I use it with my kids. I use it myself.” And I was like, “Is this really happening?” And I remember that night I showed my wife that. I’m like, “What do I do now? Do I call him up? Like, what’s the protocol here?” And they left me in that state for about two weeks. Two weeks, I’m in actually this walk-in closet where I still am about to, worldwide headquarters of Khan Academy, about to record a video. And my cell phone rings, it’s a Seattle number, and I answer it. “Hello?” “Hi, this is Larry Cohen. I’m Bill Gates’ chief of staff. You might’ve heard that Bill’s a fan.” “Yeah, I heard that.” “And if you’re free in the next few weeks, we’d love to fly you up to Seattle and figure out ways that we might be able to collaborate.” And I was looking at my calendar for the month, completely blank. So I said, “Yeah, sure. I got to cut my nails next Wednesday, but I’m happy to meet with Bill.” But anyway, we had that meeting, and it was very similar to the meeting with Ann. And so by fall of 2010, and actually I was having similar meetings at around the exact same time with executives from Google, and I can talk more about that, who were trying to fund a, they were going to fund five projects that could change the world was their charter. And then fall of 2010, it all converged. So that was a major break. The Gates Foundation and Google, on top of the money the donors gave, allowed us to become a real organization.

– Wow, thank you for sharing all of those big breaks. And I hope that a lot of us in this room are hoping for our next one. Just to go back a little bit further down memory lane, who was a favorite teacher in your past and how would their role be transformed by Khan Academy and generative AI and ChatGPT that’s coming into the world now?

– Oh, good question. I’ve answered the favorite teacher, but not the combo one. I’ll give credit to, I talked about that first day in second grade, Ms. Kraus and Mr. Cell in that enrichment class. I think what would’ve happened if Khan Academy existed then, some of that “Where in the World is Carmen Sandiego” play would’ve been Khan Academy play. And you would’ve had some kids in Metairie, Louisiana, accelerating dramatically in math and science and other subjects. 

Ms. Ellis was my fifth-grade social studies teacher. And I remember her because in hindsight I realized how brilliant she was. She ran her fifth-grade class like a humanity, a college graduate seminar. I remember she used to just peel an orange at the front of the classroom and just ask us questions all day about like, “So why do you think they did this? And why do you think this happens? And what would’ve had been different if they didn’t decide to declare war and et cetera, et cetera.” And I always found it really interesting, and later, I realized how special it is to have a teacher like that. If Khan Academy, Khanmigo and all of this existed, yeah, I think it would’ve provided even more space for that type of Socratic dialogue because students could get a lot of the core skills at their own time and pace. And if you have the AI to also be able to supplement and you can ask some questions that you might otherwise be embarrassed to ask in class, all the better. 

Let’s see, I remember Ms. North was a really cool teacher in middle school who once again liked a very Socratic, very philosophical type of question. She was our English teacher.

And then in high school, Mr. Hernandez, who was a math teacher, but he was also the advisor. It might not surprise you, I was the president of the math club, and he was our advisor, and he kind of treated me as a colleague, which was really great. Like, we would plan things together. And I really appreciated that. 

And then Ms. Kennedy, who ran journalism. She also ran it, like, we would just run, she ran it like a company, like, we ran the newspaper and she was like the chairman and she would advise us and help us. 

And I should also, when I was in high school, I did dual enrollment at the University of New Orleans, and there was a professor there, Dr. Santania, who when he realized that I was taking some very advanced math courses with him. And when he realized that I didn’t have a computer at home, nor could I afford one, he got me a job at the university doing research with him. And that’s essentially how I first got access to a computer and I started learning how to program, et cetera. So yeah, I don’t think—I might not be here if any of those folks maybe weren’t there.

– Wow, thank you for sharing those inspirational stories and how those people have impacted your life. I know that you’ve told us that learning the ability to learn is of utmost importance, but what’s a skill that took a lot of time or attempts to master for you?

– Oh, that’s a good question. I mean, if I go refer back to what I’ve already told you, learning to speak properly. I still have to pause before I say hospital ’cause until I was about 8 years old, I would say hostable. And I still sometimes will if I’m not really, really careful. So I always say hospital, I pause. So I’ll say that. 

Other things, well, I’ll say at the other end of my life, and this is one that unfortunately a lot of folks I think haven’t invested enough in is, in 2015, so eight years ago, like, weird things were happening. Like, I started getting claustrophobic on planes. Like, I would get on a plane, and I’d, like, want to get out as soon as possible. Like, it was not a pleasant experience. And I’m, like, something’s off, and I wasn’t sleeping well. And in hindsight it was really; I was probably too stressed, and t’s like a frog in boiling water. It just creeps up slowly, and it manifests itself in these really weird ways. But I started taking meditation very seriously at that point, really just so that, ’cause I had to travel, and I, just to see if it would make the planes more pleasant. But that practice of meditation I now take very, very, very seriously. And a lot of times, especially people who are ambitious, who want to do big things in the world, they try to kind of account for their own time as much as possible. And they try to be as on and as productive. And I still do that. I try to be as productive as I can when I’m on, but the off time is just as important, arguably more important. And I think it’s easy to overlook. So it’s taken me—it took me, when was that? I was 39 years old when that happened. It took me 39 years to realize that. And I think every year, I realized that more and more and every year, I take more permission with myself to, “I’m going to go to the sauna today,” or “I’m going to take this meeting walking around the park,” or “you know what, I’m just going to cancel these three meetings ’cause I don’t think I really need to be in that. And instead I’m just going to go meditate outside.” And I actually think that makes me more productive and it makes me a better entrepreneur, leader, whatever you want to call it.

– Wow, I think especially MBAs needed to hear that. We definitely need some off time and definitely some meditation to help us feel grounded. I did that just again before getting on stage. And maybe you answered this, but I’m going to ask this again. What is a topic or a skill that you think everyone should learn that is traditionally left out of K-12 education?

– Oh, so much. I mean, look, I’m talking to a bunch of MBAs. A lot of what I learned in the first year of business school, like accounting and the core of finance and how do you price something and present value? The mathematics of it are, like, middle school mathematics. It’s not super difficult. I don’t see any reason why that shouldn’t be taught in middle school or worst case, in high school. Anyone who just needs to think about one day starting a business or trying to decide whether they’re going to rent versus buy a house, they should learn that. 

So I would say those types of skills and at minimum, personal finance skills, and this is something that schools are increasingly, at least states are passing legislation for schools to teach it. I think the schools without help are going to have difficulty ’cause like who’s going to teach it? Well, we’ve been working on this for many years, but we’ve recently launched a full financial literacy course. It’s targeted at the high school level, but honestly it’s useful for anybody where it’s like, people, well, I remember, I had an MBA and the first time I went to buy a house, I was just like, “Why do I need title insurance? What is title insurance?” You’re like, “What is this thing? And exactly how does escrow work, right?” So I think that type of thing is super, super useful. 

There I had a brief period in undergrad where I wanted to be a, well, I’ll say there’s a class I took actually in, I was going to talk about, I briefly thought I wanted to be a lawyer, but then there was a class I took in business school called business law. But it was essentially, it was a crash course in law. And I remember thinking, “This could have been taught to me when I was in seventh or eighth grade.” Like, it should have been taught to me in seventh. Most people get through the whole education, including a college degree or including graduate school, and they don’t understand the legal system, which seems pretty darn important. So yeah, I would throw in financial literacy, legal system, basic finance, and accounting. Those are the big ones.

– Thank you. So our next question is: You’ve started Khan Academy and registered it as a nonprofit organization, and you’ve continued to run it as a nonprofit. How did you decide on this business model, and why not a private company?

– Hmm, yes. And there’s actually I think now three business school cases on this decision. How it’s evolved, it’s interesting. My day job at the time, I was a hedge fund analyst, which was arguably the most for-profit activity. It was only for-profit. Like, there’s no other benefit, or well, liquid capital markets and pricing efficiency, every hedge fund on the margin is helpful. But anyway, it’s primarily for-profit. But while in that job, I was able to be a really, it was interesting to be an observer of how organizations’ behavior was driven by capital structure. That honestly, you had annoying people like me, hedge fund analysts calling you and trying to figure out whether you’re going to meet or miss your earnings this coming quarter. And usually, the way that executives are compensated at these firms are based on stock performance and things like that. And I also saw when the debt holders are senior versus to when you have a strong founder versus when you’re in the second generation and the founder’s left, very few of these organizations are able to stay. There are for-profit organizations that start with a strong, mission-driven founder and are able to stay true to that until something happens to the founder or until the founder doesn’t have control of the organization anymore, right? Private equity just bought it or well, now the founder owns 20%, but 80%, it’s a public company now, or the founder dies, goes away, gets fired, and now someone else is taking over. There’s very few examples you can give. 

And there is an irony that the only class in business school—I don’t know about Haas—but where I went to business school, they didn’t fail anybody, but they would give you these like internal grades and the only grade that I would’ve been, like, the equivalent of a fail if they actually failed anyone, was a class called social entrepreneurship. Because I was so skeptical of some of these nonprofits, I was just like, “Yeah, they tell a good story, they pull on your heartstrings, but is that really going to cure cancer? Is that really going to blah, blah, blah, blah.” And that’s what I wrote in the essay until I realized that that was the not-for-profit that the professor started, but not a good idea. But it didn’t fail anyone, so not a big deal either. It allowed me to speak my truth. 

So I was cynical, but being in the hedge fund world, I said, “I want this Khan Academy project to just always be there.” I read a lot of science fiction. I was like, “what if this could be like a new type of institution, like the next Oxford or Smithsonian, but it could be on a completely different scale. It could be for billions one day and maybe it could last for hundreds of years.” And if you look at that, the only organizations that can be true to that type of a mission are not-for-profit organizations. And so, it’s sometimes delusional to say that you want to be the next Google or the next Facebook or the next Amazon. That’s hard enough. It’s arguably even a little bit more delusional to say that you want to be the next Oxford or you want to be the next thousand-year institution, but you live once, why not try?

– And what are some of the biggest challenges you faced while running and scaling a nonprofit organization? I know it’s very unique and different from running a for-profit company. A lot of our classmates who are in this room today are either building their own organizations like this or want to join one and lead one of these organizations.

– Yeah, if you asked me in 2000, if you asked me in late 2009, I would’ve said the biggest challenge is raising money and convincing people that you’re legitimate. I, at the time, took the most naive strategies and look, the advantage that Khan Academy had or that I had was that I was making something that was discoverable by people. I think it’s a very different thing if you’re starting a not-for-profit where you’re taking donations from one group and then you’re going someplace in the world and then you’re putting that money, I’m probably not the best person to ask on how do you start a not-for-profit like that. But here, not only was I making something that people could find and discover, but it was happening, it was growing, in those early days it was growing 15, 20% per month. So it was on this kind of exponential growth curve that people would associate with a high-growth tech company. And look, VCs were coming up to me and they were saying, “Hey, I’ll write a hundred thousand dollars check right now. You can quit your day job.” And it was tempting and I would take the second meeting with them, but the second meeting, they started talking about premium offerings and putting this behind a paywall and that and this is how you’re going to, and I’m like, no, and I was getting letters from kids that I knew and families that I knew would not be able to use the tool if this VC had their way. And so that’s why I kept turning that down, and luckily, my naive strategy kind of worked with people like Ann discovering it. And eventually, I mean, you can’t plan for Bill Gates just showing. I have a theory that I sometimes play with that benevolent aliens are using Khan Academy to prepare humanity for first contact. And some of what I told you of like, these things that seem a little bit more than just chance. Those are my data points. I have more. I actually think the benevolent aliens help set me up with my wife as well, so that I can prepare humanity for first contact through Khan Academy. But I have some good stories there.

But the real difficulties, I think, beyond that first validation, which is a hard one, and it was really hard. I mean, I kind of laugh about that nine months where I really didn’t know what I felt like; I kind of ruined our financial future. But once we started to have resources, I think it is, and we were a little bit, we are still unusual. We’ve been able to attract very good talent. Like, the main arguable advantages that a for-profit has over a nonprofit is access to capital, access to talent and potentially some notion of the incentives make you act in a different way, which could be good or bad. Access to capital, at least in those, in hindsight, I’m happy that the access to capital we’ve had, our budget is a real budget where it’s like 60, $70 million a year now. And it’s primarily philanthropic. So we have been able to do that. 

Now, there have been other for-profit organizations, including in EdTech, that started a year or two after Khan Academy; and they get higher and higher valuations, and they’re able to do these really huge rounds and raise a hundred million, raise 500 million, raise a billion dollars. And as a 30-year-old, I would’ve been somewhat envious of that. Now, I don’t envy that at all because that creates all sorts of distortions and pressures. And the hardest thing is, as you grow, to maintain alignment. If you can grow and maintain your talent and your alignment, a 300-person team can outperform a 30,000-person team. I’m not saying this even as an exaggeration. I 100% believe this. Like, you see this playing out in the real world right now. I mean, OpenAI is a 300-person team. I think they’re outperforming many 80-, 90,000-person teams on what they’re doing ’cause they are aligned. And to some degree, probably the scarcity of capital in their early days helped drive that. And their group that I know very intimately now, and I know some of the 90,000-person organization, some of them were our original funders very well as well. But yeah, I think that alignment, when you get to like 20 people, you start realizing that people just don’t always assume the obvious, what you think is the obvious thing ’cause you’re not just having conversations on the way to the snack counter or whatever. And so you have these growing pains. There are like 20 people, 50 people, 100 people, 200 people. And so now I’m a big believer in like, you can’t overinvest in alignment and alignment is not just communication. And this is a muscle that I don’t think people in Silicon Valley exercise enough, is being very clear with team members of like: “Look, this is what we’re doing. If you’re excited about that, awesome. If you’re not, this might not be the place for you.” That is kind of strong language, but I have found it to be very powerful language because otherwise, people are just trying to pull it in all sorts of different directions.

– Thank you. And just to, like, double down on that last few statements: As your business grew, what were your main culture objectives, and how did you maintain or create that company culture? Did you have any hiring strategies or professional development plans that you leaned into? Tell us more about that.

– Yeah, no, it’s a good, I segued well into your next question. My early days, like, my first job out of college was at Oracle. I was a product manager there and I got very cynical, very fast. I was like this big company, I’m just sitting in meetings all day, well, anyway, I don’t want to name, well, there’s some fun stories there, but my manager at the time had some views about the efficiency and how it could be improved at the organization. 

But that made me, like, there was a time where I said, “Khan Academy is always going to have, is always going to be a startup. It’s going to be a perpetual startup. I don’t want it to ever be a large company because large companies become bureaucratic and people just sit in meetings all day.” And so I had a view of “Let me just hire the smartest people I can and get out of their way and have as few meetings as possible.” That can sometimes be good, but it leads to issues at some point. Smart people, if they’re not aligned, can easily try to pull in different directions. And if you’re not communicating enough, you’re not going to get enough alignment. So over time, I’ve started to realize that it’s very important to, that we are a place where people can bring their full selves to. And because look, you’re spending a large chunk of your life doing work. And so, I try to—Khan Academy is a place where you shouldn’t be embarrassed to say that you’re going to take an hour to go meditate. You should be proud of that. You should even say that as an example. And look, a lot of that comes from me setting an example. It’s one thing to say it. It’s another thing to say, “Hey, I can’t attend that meeting because I’m going to be meditating,” and that sends a signal to other people. “Or I can’t do that evening meeting because I said that I’m going to do this event with my family that night.” So I think it’s very important to put those guardrails and all of that. 

But I think culturally what I take a lot of, what I try to put a lot of energy into is making sure people are aligned. Like, disagreeing is great. Like, let’s disagree while we’re talking about the tactics of something, but we’ve got to make a decision and then we’ve got to commit to that decision, otherwise we’re just never going to go anywhere. And if you can’t truly commit to the decision and then that goes into the, like, this might not be the right place, right? Like, otherwise, you’re just going to be constantly trying to undermine it in passive-aggressive ways. So I think that’s another cultural thing. 

I’ll say another cultural thing that I’ll say, which is, I think, obviously words like DEIB or letters like DEIB are, like, a big deal these days and they always have, and I’ve always been a very big believer in that. But I do believe that sometimes it is viewed as a signal for you are a left-leaning organization, or you say DEIB, but you really mean that you subscribe to these ideas that other people might not subscribe to, which is almost the opposite of DEIB, right? The whole argument behind diversity is that when you have different viewpoints, people who are different than you, now reasonable, and people who aren’t trying to shut each other down, et cetera. But if you have different reasonable viewpoints, that’s going to get your eventual decision to be a better place and people with very different experiences. And I remember a wake-up call for me was we had a senior executive at Khan Academy, this was about five or six years ago, and it was at an offsite, and all of a sudden, and he was an older gentleman and he said, “I was afraid to say this, but now I feel comfortable with y’all enough to say this. I’m an evangelical Christian and I’m a Republican.” And I remember when he said that, like half the team was like, “Wow, you’re so brave for saying that.” And then the other half of the team was saying things like, “Who did this guy vote for? And what’s his view on this and this?” And that was an eye-opener for me. It’s like, we can say DEIB, but we aren’t DEIB if that guy, who was really good at his job, who everyone really liked to work with, was afraid to even say what religion he is. And so what I try to do now is push everyone on DEIB where I say, “That’s not to hire more people that agree with you. That is to hire people who are truly from diverse perspectives that can push us to get to a better place.” So I think I take those words more seriously than a lot of other corporations that do it in a very performative way. I think there’s, most executives, if I’m honest, say I’m not going to get involved. I’m going to hire someone else to do that. And I’m just going to keep nodding and hope for the best versus actually trying to get true DEIB.

– Thank you for that. After hearing the inspiring story of the origin of Khan Academy, our ambitious and idealistic students here have questions for you. If you’re interested in asking a question, please go ahead and step to the mic right there in the aisle and tell us who you are and then go ahead with your question.

– Sal, thank you. Is this on? Probably not. OK, it is. Sal, thank you. My name is Doris. I’m a second year, and I lead our Haas Education Club here, which everyone should join. Aside from that pitch, oh, first off, I grew up hearing your videos, watching your videos, so I’m very familiar with that voice and today, I’m able to put that voice to the face and it’s great. My question for you is what is the largest gap that you see in American education today?

 

– Oh yeah, it’s a big one. I’ll say at least two. I’ll say the big one is, we fundamentally have a seat time based system, especially in high school, but even in college as well, right? In high school, we know the Carnegie units, which is like, you get a Carnegie unit when you sit in a year in math, a Carnegie unit, a year in English, et cetera. And even college, high school graduation requirements and college entrance requirements have stuff like you need to take three years of math. You need to take two years of foreign language. That, in no way, talks about whether you learn the math or learn the foreign language. So I would love to go more to an outcome-based or competency-based system that’s like, you should get to this level of math before graduating from high school. You should get to this level of reading, this level of writing. And if you don’t, you have the opportunity incentive to keep working on it. It’s not like it’s an all-or-nothing type of thing, but if you go there fast, great, you can get there fast and you can work on other things. 

I think college should be the same, the fact that it’s all credit-hour based and that magically, regardless of what you major in, it’s all kind of like a four-year program. Yeah, there’s some arguments behind it from a stage of life point of view. So I would go to a competency-based, a corollary to that is being mastery-based, which is this idea that if students have a gap, a conceptual gap, that they have the opportunity, the incentive to continue to work on it. So if you’ve got a B in computer science, and two years later, you’ve mastered that material, you should be able to do something that allows you to show that you’re now at an A level, your transcript should be able to be upgraded, so to speak. And a correlator to that is, allow students to learn at their own time and pace.

– [Doris] Thank you.

– Hi, my name’s Patty Debenham. I run a center here for Haas students all about social impact. And I’ve been a big fan for a long time. I loved your book and at the end, you painted a terrific vision of a new kind of higher education that doesn’t cost $70,000 a year. I mean, even Berkeley, a public institution, is crazy expensive. I’d love to hear how you’re thinking about that now and how it can be possible that my 10-year-old doesn’t have to pay 70, well, I don’t have to pay $70,000?

– Yes. No, this is something I’ve been thinking a lot about and many of y’all know, I mean, I wrote that book, and then the year after I’m like, it’s one thing to write about a book. It’s a whole other thing to try to implement it. So I did start a school and now schools based on the principles in that book. We have Khan Lab school out down here in Mountain View and Palo Alto. And now there’s this Khan World school that we started with Arizona State University, which is a virtual high school. So the virtual middle and high school, and then Khan Lab school down here is K-12. 

But the big question is: What about higher ed? And there’s a couple of tactics that we’re taking. One is we are actively exploring ways that Khan Academy, mastery on Khan Academy can result in college credit. So one method is if you can make essentially some version of dual enrollment via Khan Academy available to anyone on the planet, and it’s essentially it’s free or near free, and they can get a lot of these first- or second-year classes out of the way; that automatically lowers the cost of college education and actually increases the capacity for more people to get through the physical doors, so to speak. But the really cool thing would be if—and I don’t care if I’m involved—but someone, and there’s some universities, I think, that are already touching on that. There’s, like, Waterloo in Canada, which many of y’all know is an excellent, one of the world’s best engineering schools. Kids graduate from there, not with debt, but with savings because they use the co-op program so effectively, internships. And there’s another advantage where, while the Stanford and the Berkeley and the MIT kids are in classes in the fall and the spring, the Waterloo kids are getting, they get a monopoly in all the internships at all of the places, and they’re getting paid. And so that’s why not only are they getting better experience, they’re more employable. So I think a model like that would be really interesting. I would love to see it in the U.S. I know there’s a lot of talk these days about downtown San Francisco having emptied out. I’ve whispered to a few folks, “Hey, someone should start a university there, but make it so it’s free and not free through philanthropy.” Maybe you need some philanthropy to get it going, but in the long run, it’s free because the students are able to do a lot of real-world work that can be used to both pay the university and pay the students. So yeah, we’ll see. We’ll see. Yeah, your 10-year-old, I have about eight years to work on that. We’ll see what happens.

– Thanks for taking the time, Sal. My name is Asif. And a subject that talks about that learning to learn and critical thinking that you mention a lot is philosophy and looking at some of your books, maybe you’re a fan as well, but academic philosophy is famously dull, whereas the practical impacts of a philosophy educated population society is invaluable. So I’d love to get your thoughts on philosophy in the education system and maybe if you’re incorporating it into Khan World School or Labs.

– Yeah, so we definitely incorporate, like, when I think about what a great education looks like, I think you definitely should have Socratic dialogue about things like philosophy. I mean, there’s other types of things that you can get into really good, thoughtful debates and discussions about, but philosophy’s definitely like half of all the discussions that you could easily have. And at Khan World School, Socratic seminar is actually the anchor point for the whole school. And we’ve partnered with Steve Levitt’s group at the University of Chicago to create a whole list of topics. And half of them are literally philosophical, but they’re real-world philosophical to make it not just abstract. So there’s, like, literally a debate for middle school and high school students on things like should we leverage CRISPR to modify the human genome? Go. And all sorts of philosophical debates start to emerge from that. Will AI be a net positive or negative for humanity? Is GDP the best way to measure progress? You have to learn economics and history and math, but there’s a lot of philosophy in that. So yes, I’m a big fan of it. We’re definitely trying to, implementing the schools we’re doing. 

The AI that we just, Khanmigo, which we built, we partnered with OpenAI over the last year. We launched with GPT-4 several months ago. One of the things that you can get into debates with the AI about frankly all of these topics and more, so that’s one way to hopefully scale it out a little bit more. And then we do have some content already on, and this is more academic philosophy. We’ve partnered with an organization, so that content is on Khan Academy. But yeah, I definitely think it is important. It is one of those things that I think you could have it in almost any subject. And I think that’s actually probably the way to make it, you tie it to real-world issues that is happening every day on the news. Like, reasonable people aren’t getting into debates about these things. Those are great fodder for philosophy.

– [Asif] Thank you.

– Hi, first off, a huge thank you. I was a public school teacher in New York City and Khan Academy liberated my classroom to be a standard space, like collaborative problem-solving space.

– [Sal] Oh, that’s good to hear. That’s the dream.

– My students in Brownsboro were, like, outperforming Westchester white, like, rich students because of work like yours.

– [Sal] If you have any information, I’m always looking of, anyway, but yeah, go.

– I’m looking for an internship this summer. But people looked at, and what made Khan different from me is that you trusted me as an educator to understand data and you gave it to me so I could use it. And you trusted my students to have the data too. That was better than ST, better than I learned, better than anything else. But people looked at me as an educator as unique because I knew how to use the data. My big fear going into AI and ChatGPT is how do we support and build a teacher force that is able to use that technology to liberate their classrooms?

– Yeah, that’s a great question. And what I’m hopeful about, obviously, it’s still very early days, we’re building this right now with all of our Khanmigo stuff. We realize it’s great; Khanmigo can act as a tutor, but it’s even more powerful that it can act as a teaching assistant. And some of that is to help with things like lesson plans and rubrics and give a first-pass grade and writing progress reports, which as you know, as a former teacher, take up a lot of your time.

– [Audience Member] A lot of time.

– So that’s good. But I also think that generative AI means the end of these, like, kind of spreadsheet looking dashboards that you’re familiar with because now it’s like you’re having an analyst. And we already have implemented some aspects of this where a teacher, instead of seeing the dashboard, right, and then having not every teacher can do what you did. And like looking at the dashboard and figuring out which kids could use what, they can just talk to the AI and say, “Hey, so what’s going on?” And the AI can say, “Well, for the most part, the students are doing all right. Here’s five kids who are, for the most part, struggling with these three concepts. Here’s an idea for a mini lesson that you could do with these three kids while the other, or these five kids while the other 20 or 25 students work at their own. Or if I were to group, or here’s an idea for a lesson, and by the way, I would group the kids this way for this reason. This third of the class is really struggling, this third is OK, this third is ready for some really enrichment. They’re getting bored. Let’s give them something else.” This isn’t science fiction anymore. And then if you want the data and the AI will say, “Oh, and by the way, if you don’t believe me, click here for the spreadsheet.” But I think that’s going to make it much more accessible to all teachers. You’re going to be able to text with the dashboard, so to speak, and say, “What should I do? What insights are here? What do you recommend I do next with the students?”

– [Audience Member] Thank you.

– Hey, Sal, my name’s Alex. Following up on that a little bit on the Khan World Academy, I was listening to the podcast with Steve Levitt, and initially I was skeptical, but then I heard the student talking about her experience and it started making a lot more sense. And so I was more curious if you can go in on, like, how you continue to design that curriculum and also what your vision is to scale that up so that more students can have an experience like that?

– Yeah, I mean the beauty of Khan World School and ASU, we did it ’cause ASU already runs ASU prep, which already has 40,000 students, so they know how to scale. And they already have a charter in the state of Arizona, which means ASU prep. And now Khan World School is free to any student in the state of Arizona. And hopefully, we can get charters in other states as well. So that free, world-class education for anyone, anywhere can be true beyond Arizona ’cause this is a full school. 

 A lot of the principles are what we’ve learned over 10 years running the physical Khan Lab School. And also what I wrote 10, 11 years ago in The One World Schoolhouse, students learning at their own pace, having more agency autonomy, the adults, the teachers, the guides, whatever you want to call them, their time focused more on unblocking students, motivating students, advising students, driving Socratic seminars versus lecture, et cetera, et cetera. And with a virtual environment, you’re not bound by time or space in the same way. And we also wanted to show that you could do virtual much better than people did it in the pandemic where it was soul-crushing. And so, we anchor it with a Socratic dialogue. Kids get an hour or two of synchronous community-building discussion advisory every day, but then they have a lot of autonomy to do other things. 

And to your point, Steve Levitt, who everyone knows here from Freakonomics, famous economist, he’s not a sucker for bad data. But as far as we can tell, these kids are not learning 20, 30% faster. They’re learning two x, three x faster, and they’re enjoying it. And there’s stuff we’re not even measuring like the seminar ’cause there aren’t any standardized tests for how good someone is at seminar. But we feel confident that these are well-rounded students that are going to really thrive later on.

– [Alex] Thank you.

– Thanks, Sal. My name is Vinit, and I’m in the MBA program. So recently, I started getting excited and passionate about using technology and AI to perhaps achieve, like, educational parity. And so I was at this San Francisco tech meetup, and I started going around and just started pitching this idea to some folks. Look, we don’t need to teach children or kids how to use computers or even learn how to code anymore. Like, AI can generate code. We need to just provide them more creative ways to play with code or sort of just give them, like, the fundamental building blocks like Legos using AI and they can just sort of create apps on their own and feel empowered about themselves. And what ended up happening throughout the course of the evening was when I talked to the investor community, like the VCs and folks, they would just look at me like, no, no, like EdTech’s a very, very difficult business model. You’re either going to have to sell to the parents or schools, which is no joke. And then there happened to be folks there that were parents and many of them were technologists famously creating apps for adults. But then when it comes to their own kids, they would say like, “No, I just want my kids to play outside, be in the nature. Like, I personally believe that technology hasn’t really given us anything meaningful in form of, yeah, education other than Khan Academy, of course.” But I mean, it is valid concern giving tha the rates of stress, anxiety and focus attention for teenagers or preteens especially has gone up quite a lot recently. So, yeah. I don’t really have a question. I guess I would wonder how I really want to remain optimistic, and you’re one of the few people that I see that are optimistic still in this space. So when you’re not speaking to a room of full of people that have already bought into this idea, I guess, how do you convince those folks, whether it’s parents or investors or whoever it is?

– Yeah, well, I think a bunch of stuff you said resonates with, I think the VCs you’re talking to are right. EDTech is a hard thing especially if you’re trying to get VC-like returns. It’s a very hard thing. And if you want to get VC-like returns, you probably will have to sacrifice some of, maybe some of your principles around like, OK, let’s make this a thing for rich kids, and maybe it helps them cheat a little bit or something like that. Honestly, there are multi-billion dollar publicly traded EDTech companies, that is their business model. I won’t name names. So it is hard ’cause it’s, and it’s even harder if you’re trying to introduce a new paradigm around, in your case, engineering/coding. 

My answer to the screen time is, it’s not about screen time is neutral. There’s some very good uses of screen time. Obviously, if a student is writing a paper, coding, doing some graphical art, I argue Khan Academy. But even that needs to be within reason. For my own children, I still want them to go outside, play with their friends. If someone visits Khan World School or especially Khan Lab School, if they visit, you’re going to see kids not on a computer all day. They do probably use a computer more than your average school, but they’re also getting more social interaction than your average school because they’re not sitting in lectures all day, either. So Khan Lab school kids are constantly working on projects and collaborating and walking around the space. They don’t have to sit in one chair all day. So I’m a big believer in that. So my advice would be, you might be trying to tackle too many degrees away from where people’s comfort zone is right now, but maybe there’s a way to take that same tool and show that you could use it to create, like, enterprise apps or things like that, and college students could use it to start companies. That could probably get, I could imagine, VCs wanting that even to start their own incubator. They create an app like that, and people could come in and just write apps really, really, really fast and get product market fit tests really, really fast. That could be an interesting model. 

But maybe there’s other things if you find the right partner with Lego or something, I don’t know, it’s not easy to pull off. Who knows? I don’t want to discourage you either ’cause what I was doing in 2008 or 2009, people found far, far more ridiculous than what you are doing. So people thought not-for-profit, YouTube videos, personalized learning, all of these stuff, was sounded ridiculous.

– [Vinit] Thank you.

– Well sadly, we are out of time. Thank you for the time that you’ve spent with us today, Sal.

– [Sal] Thanks for having me.

– Thanks to our moderators, Anu and Mrudula. Thanks to all of you for joining us. This has been a wonderful and inspiring hour. I hope you’ll join us again for future Dean Speaker Series. Have a wonderful day.

Ann Harrison reappointed to second term as Berkeley Haas dean

Woman standing with arms crossed in multicolored sweater
Dean Ann Harrison. Photo: Noah Berger

Berkeley Haas Dean Ann Harrison, lauded for keeping the school’s six business programs ranked among the world’s best and significantly expanding the breadth and depth of the faculty, has been appointed to serve a second five-year term.

UC Berkeley Chancellor Carol Christ and Executive Vice Chancellor and Provost Benjamin Hermalin announced Harrison’s reappointment today. Her new term begins July 1, 2023. 

“Please join us in congratulating Ann on her reappointment and her many accomplishments,” they said in a campus announcement. “With a focus on innovation and entrepreneurship, sustainability, and DEIJB (diversity, equity, inclusion, justice, and belonging), her bold and transformative vision for the future of Haas will continue to set it apart from other top business schools.”

Harrison said she is thrilled by the reappointment and the opportunity to continue supporting student learning and well-being, growing the faculty and providing them with the necessary resources to conduct groundbreaking research, teaming up with the superb staff, and strengthening the school’s finances and reputation.

Dean Ann Harrison sitting in a chair in the Haas courtyard
Dean Harrison in the Haas courtyard, where the school’s Defining Leadership Principles (including Confidence without Attitude) are etched in stone. Photo: Noah Berger

“As a public university, our mission is to transform the lives of as many students as possible and lead the world with path-breaking research,” Harrison said. “I am so proud of our faculty strengths across so many different areas—from real estate and finance to strategy, economics, marketing, and management. Haas graduates are transforming business to tackle the world’s most pressing challenges.”

“I am so proud of our faculty strengths across so many different areas—from real estate and finance to strategy, economics, marketing, and management. Haas graduates are transforming business to tackle the world’s most pressing challenges.”

Advancing the mission

Harrison is the 15th dean of Haas and the second woman to lead the school. Her new book, “Globalization, Firms, and Workers” (World Scientific Books, 2022), collects her path-breaking work on globalization and international trade. She is now the world’s most highly cited scholar on foreign direct investment.

Harrison earned her BA from UC Berkeley in economics and history, and her PhD from Princeton University. She held previous professorships in UC Berkeley’s College of Agricultural and Resource Economics as well as at Columbia University and the Wharton School, where she was the William H. Wurster Professor of Management.  

At Haas since January 2019, Harrison has advanced the school’s mission in a number of critical areas, including:

  • increasing the size of the faculty, which allowed for diversification and the creation of new faculty groups. Since she arrived in 2019, Harrison has led the hiring of 33 new professors; 52% are women and 52% are people of color.
  • creating the first Flex online MBA cohort at any top business school. Haas applied learnings from the pandemic, using new technology to make the MBA available to expanded groups of international students and working parents who require flexible schedules.
  • raising a record $200 million over the last four years, including a record $69 million last year. Under Harrison, Haas secured the largest single gift in the school’s history$30 million from alumnus Ned Spieker, BS 66to turn the undergraduate program into a four-year program.
  • committing to making Haas a more inclusive school by creating a more diverse Haas Advisory Board; employing extensive resources to diversify the student body; rethinking faculty and staff hiring; and incorporating anti-bias training for senior leaders, staff, and students.

Harrison said she will continue to work with her team to strengthen academics as well as the student experience at Haas. One important goal is to ensure that the school’s six degree programs remain the best in the world. In its 2023 b-school ranking, announced today, the Financial Times named the Berkeley Haas Full-time MBA Program #4 in the U.S. and #7 worldwide, a record high for the program. US News & World Report ranks both the highly-selective Haas Undergraduate Program and the Evening & Weekend MBA Program #2 in the U.S. The Master’s in Financial Engineering (MFE) Program is also ranked #2 globally. 

In its 2023 b-school ranking, announced today, the Financial Times named the Full-time MBA Program #4 in the U.S. and #7 worldwide, a record-high for Haas. 

Three priority areas

She also plans to continue work in her three priority areas: sustainability, DEIJB, and entrepreneurship. 

“Business plays a critical role in mainstreaming everything from fighting climate change to creating more inclusive and equitable workplaces,” Harrison said. “Haas is preparing students to lead in those areas.” The school’s Accounting Group, for example, is assessing SEC proposals to increase financial disclosure requirements for climate risk, she said.

In sustainability, Harrison brought in Michele de Nevers, a top sustainability expert, from the World Bank, whose team has worked to combine the existing sustainability curriculum with new courses. By the end of 2023, all core courses at Haas will be on track to incorporate cases, topics, and assignments that will empower students to address climate change and other sustainability challenges through business. Haas is now set apart as the only school that offers depth and breadth across all of the key sustainability areas aligned with the UN Principles for Responsible Management Education: energy, food, real estate/built environment, corporate social responsibility, and impact finance. 

In diversity and inclusion, Harrison oversaw the building of a team led by Chief DEI Officer Élida Bautista, which includes four full-time staff and a part-time diversity expert who is working with faculty on curriculum and teaching. This past spring, the school launched its first-ever core course on leading diverse teams.

Known for its strength in entrepreneurship and innovation, Haas will be breaking ground on a new entrepreneurship hub this spring. In partnership with UC Berkeley, which is the #1 public institution for startup founders (as reported by Pitchbook), the hub will bring together students from across campus to network and innovate. On the faculty side, Harrison oversaw the creation of the new Entrepreneurship and Innovation faculty group in 2020.

Dean Ann Harrison with Kimberly Mendez, Nicole Austin-Thomas, and Almaz Ali, MBA 21s, at the Berkeley Haas Consortium student welcome event in 2019.
Dean Ann Harrison with Kimberly Mendez, Nicole Austin-Thomas, and Almaz Ali, MBA 21s, at the Berkeley Haas Consortium student welcome event in 2019.

Cross-campus collaboration

Harrison, who has deep relationships with leaders across UC Berkeley, has also prioritized cross-campus collaboration, increasing the number of academic programs offered by Haas. She worked closely with the Berkeley School of Public Health and School of Law to bolster their joint programs and launched the Robinson Life Science, Business, and Entrepreneurship Program with the Department of Molecular and Cell Biology, the MBA/MEng degree with the College of Engineering, and the summer minor in sustainable business and policy with the Department of Agricultural and Resource Economics. 

She is currently developing a concurrent degree program for a  joint MBA and master’s degree in climate solutions with the Rausser College of Natural Resources.  

 

Nvidia CEO Jensen Huang on inventing new markets

Jensen Huang photo
Jensen Huang

Jensen Huang,  co-founder and CEO of Nvidia, solved the 3D graphic challenge for the personal computer in 1999 with the company’s release of the first-ever graphics processing unit (GPU).

Nvidia’s vision for the chips that fueled new video games existed before they had a name for it, Huang said during last week’s Dean’s Speaker Series at Haas.

“It’s OK that you don’t’ have the words to describe it, but you need to know what the company does and for what reason,” said Huang, whose company was named to Time Magazine’s annual list of the 100 most influential companies of 2022.

Nvidia set new standards in visual computing with interactive graphics on tablets, portable media players, and workstations. Its technology has been used in movies like Harry Potter, Iron Man and Avatar and is at the center of the most cutting-edge trends in technology: virtual reality, artificial intelligence and self-driving cars.

Now, Nvidia and other chip-makers’ stock shares are rising over their potential to power OpenAI’s language tool, ChatGPT, a “chatbot” that interacts in a conversational way with users.

(Watch the DSS talk here.)

Huang calls ChatGPT “the iPhone moment of artificial intelligence.”

“When was the last time that we saw a piece of technology that is so versatile that it can solve problems and surprise people in so many ways?” he said. “It can write a poem, fill out a spreadsheet, do a sequel theory, and write Python code. We’ve been waiting for this moment.”

Nvidia is constantly reinventing itself, which is the key for every entrepreneur, he said.

“Creating something out of nothing is a skill that I think every company or startup needs to have,” he said. “The energy of looking for something new – a new way of doing something – is always there.”

Leadership requires both dedication and empathy, he added.

“Being a CEO, being a leader, it’s a craft. You have to dedicate yourself to the craft. I don’t think there’s any easy answer aside from that. You have to have curiosity, you have to have deep empathy for other people’s work.”

Dean’s Speaker Series: Reddit COO Jen Wong on her leadership journey

Growing up as a shy introvert, Reddit COO Jen Wong said she never saw herself as a leader.

“I think I assumed a leader was a person who told other people what to do,” Wong said.

It was her fascination with companies and the people who lead them, as well as a drive to solve new problems, that led her to pursue a career that has included leadership positions at Time, Inc.; PopSugar; AOL, and now Reddit.

“I’m a puzzler at heart, and when my mind starts searching for a new problem to solve, and there’s something I can learn, that propels me forward,” Wong said. “I always want to move into something that has a clear lane for me to have an impact.”

Wong, who topped Reddit’s Queer 50 list this year, shared her leadership journey with MBA students and the Haas community at a Dean’s Speaker Series talk on Sept. 21. The talk was co-sponsored by Q@Haas as part of Coming Out Week, September 18-22.

As Reddit’s Chief Operation Officer, Wong oversees business strategy and related teams.  Only four years into her tenure as COO, she has helped lead the growth of Reddit into a profitable business by scaling ad revenue to well over $100 million.  Her leadership goes beyond growing the business; she is also passionate about Reddit’s company goal that’s just as important as revenue: diversity and inclusion. In addition, Jen is viewed as an expert in the digital landscape.

Watch the full talk:


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Preparing women to lead in a post-pandemic world

Nine MBA women students
From left to right, top to bottom: Chyi-Shin Shu, Maggie O’Neill, Nicole Austin-Thomas, Sadie Shelton, Rebeca West, Marina Mamer, all MBA 21; Gina Deitz, Julie Reynolds, and Sitara Chandra, all MBA/MPH 21.

Equipping women with the skills to bounce back as strong leaders in the wake of the COVID-19 pandemic will be the focus of the 25th annual Berkeley Haas Women in Leadership (WIL) conference next month.

Nearly 2.3 million women have dropped out of the workforce since the start of the pandemic, according to the U.S. Bureau of Labor Statistics. On top of that, the pandemic has illuminated deeply-rooted gender equity, class, and racial injustice issues in the U.S. 

To prepare women to emerge stronger from the crisis, the WIL leadership team quickly decided that this year’s theme would be “New Leadership for a New World.” The conference will be held March 4-5.

“We’re living in a totally different world now and there are brand new roles for everybody to play, especially for women,” said conference Co-chair, Maggie O’Neill, MBA 21. From Jacinda Ardern to Stacey Abrams, this past year has revealed women leaders in a new light and we want to build on this momentum and help create a stronger, more inclusive definition of leadership.”

The WIL conference, one of the longest-running and most well-attended events at Berkeley Haas, brings together students, scholars, entrepreneurs, and corporate executives from Silicon Valley and beyond. Organized by the Women in Leadership club, the conference will be held during two half-days online. 

Conference organizers include Maggie O’Neill, Chyi-Shin Shu, Sadie Shelton, Nicole Austin-Thomas, Rebeca West, Marina Mamer, all MBA 21; Gina Deitz, Julie Reynolds, and Sitara Chandra, all MBA/MPH 21.

More than 250 people have registered for the conference, which will focus on celebrating pioneering women leaders, making an impact in local communities and beyond, and learning leadership skills for professional success. 

The team invited poets, activists, and journalists to lead panel discussions alongside executives and entrepreneurs. The idea was to expand the lens of who is a leader, said Nicole Austin-Thomas, MBA 21. 

Laila Tarraf, MBA 97, chief people officer at Allbirds, will kick off the conference with a keynote, followed by a story salon, a fireside chat, and a virtual wine tasting event for WIL members.

Dean Ann Harrison will open Friday’s sessions, followed by a keynote address from diversity consultant Mikki Kendall; a panel discussion led by Kellie McElhaney, executive director of the Center for Equity, Gender, and Leadership at Haas; a networking lunch; a fireside chat with poet and activist Cleo Wade; and breakout sessions focused on allyship and advocacy, authentic authorship, and building equitable outcomes.

Other notable guest speakers include Elena Gomez, BS 91, CFO of Zendesk; Vrinda Gupta, MBA 20, founder and CEO of Sequin Financial; Monique Shields, a Berkeley Haas career coach and founder of career coaching company Seven Pines Leadership; and Archana Gilravni, vice president of partnerships at the Sheryl Sandberg and Dave Goldberg Family Foundation.

Conference tickets are available here.

Binundu Isaiah Samuel, EMBA 20: It is not OK!

In response to the violence against Black and African-American people and the wave of protests and unrest across the country, we’re sharing some of the perspectives of our Black students, staff, faculty, and alumni. Binundu Isaiah Samuel,
co-president of the Berkeley Haas Executive MBA Class of 2020, sent this letter to classmates. We’re reposting with his permission.

Dear Executive MBA Family,

Binundu Isaiah Samuel
Binundu Isaiah Samuel, EMBA 20

I watched the execution of George Floyd in horror and pain. Sadly, images and stories of similar atrocities have become all too common yet, this one hit different! I watched a man cry out for mercy only for his cries to fall on deaf ears. I watched a man in pain and agony cry out for his mother in fear of losing his life! Yet, his cries were drowned out by hate, ignorance, and a lack of decency for a fellow human being. No one was able to intervene, no one was able to save George Floyd, or Ahmaud Arbery, or Breonna Taylor. The cries of the brutalized have echoed for generations, and now here we are. It is not ok!

The history of this nation is marred by episodes of hate. Repetitive cycles, where black bodies and lives are mangled, abused, beaten, disrespected, tortured, and made to feel less than human. It is not ok! 

I cried as I watched another one of my black brothers struggle for his life, and could not help but think about how that could have easily been me or someone I cared about. The video reminded me of the excessive caution that I have to exercise when interacting with police, for fear of becoming another statistic. The video reminded me of the racial slurs that I’ve endured from ignorant groups and people alike. The video reminded me of how I fear for my black friends and family, and how our safety isn’t guaranteed even at the hands of those sworn to protect us. The video reminded me of the anxiety that I feel about how those in positions of power will react to my application for a job or opportunity when they realize that I am a black candidate. Believe me; being black every day in America is a constant reminder of a broken system that screams “we don’t want you” and to be honest, I am tired. It is not ok!

The video reminded me of the anxiety that I feel about how those in positions of power will react to my application for a job or opportunity when they realize that I am a black candidate.

I am sharing this because I feel that it is important and necessary for us to align as an EMBA community. It is time for us to decide where we stand. Are you going to be on the side of justice, equality, and fairness for all? Or are you going to pretend that there are no problems? The time for pretense is over! The mask has been lifted, and the scars are exposed for all to see – just listen to the cries reverberating from all corners of the globe. The world is in pain. It is not ok!

EMBA 20’s, we are the future. Our cohort will give rise to great leaders who will have the opportunity and power to drive change and influence the world! We must heed the lessons of our past and present to ensure our future will be better. We must remember, that in whatever capacity, the change can start with us!

Thanks to those that have reached out to me—it means a lot! Please know that I do not claim to have the answers – I am still learning, analyzing, organizing, and digesting all that is occurring. As I look for ways to contribute towards a solution, I welcome you to join me in dialogue, partnership, and allyship. 

Here is a folder with more anti-racism resources.

Be well and take care, EMBA family.

Binundu Isaiah Samuel
Class Co-President, EMBA Class of 2020

Prof. Laura Tyson to lead governor’s new economic council

Prof. Laura Tyson, Photo: Karl Nielsen
Prof. Laura Tyson (Photo: Karl Nielsen)

Influential economist Laura D’Andrea Tyson, who served as dean of Berkeley Haas and as a presidential advisor, has been named by Gov. Gavin Newsom to co-chair his new Council of Economic Advisors.

The 13-member panel, announced on Friday, will advise the governor and state finance director on wide-ranging economic issues “and deepen relationships between the administration and academic researchers to keep California moving toward an economy that is inclusive, resilient, and sustainable.”

Tyson will co-chair the council with Fernando Lozano, an economics professor at Pomona College. 

 “I look forward to working with this expert group of advisors to support Gov. Newsom’s goal of fostering inclusive, sustainable, long-term economic growth for all of California,” Tyson said. “As the world’s 5th largest economy and the nation’s leader in innovation and new business formation, California is in a strong position to tackle major economic challenges—including adapting to climate change, creating good job opportunities throughout the state, and reducing homelessness.”

Two other UC Berkeley professors were also appointed: Maurice Obstfeld, the Class of 1958 Professor of Economics who served on President Barack Obama’s Council of Economic Advisers from 2014 to 2015 and as chief economist at the International Monetary Fund from 2015 to 2018, and economics and public policy Prof. Hilary Hoynes, the Haas Distinguished Chair in Economic Disparities and co-director of the Berkeley Opportunity Lab. Lieutenant Governor Eleni Kounalakis, MBA 92, will also serve on the panel.

Gov. Gavin Newsom
Gov. Gavin Newsom (Wikimedia Commons)

“For California to continue thriving, we need our economy to work for everyone in every corner of the state,” Newsom said in a statement. “Our state is experiencing its longest economic expansion, with record-low unemployment—3.9 percent—increases in personal income, and billions in investments, but this expansion has unevenly benefited people across the state. We need to invest for the future, adapt to a changing climate and keep our budget balanced. This Council will keep its pulse on what’s happening in our economy while making policy recommendations to prepare us for what’s to come.”

 An expert on trade, competitiveness, and the future of work, Tyson is a distinguished professor of the graduate school and faculty director of the Institute for Business & Social Impact, which she launched in 2013. She also chairs the board of trustees at UC Berkeley’s Blum Center for Developing Economies, which aims to develop solutions to global poverty. She served as Berkeley Haas interim dean from July to December 2018, and as dean from 1998 to 2001. She led London Business School as dean from 2002 to 2006.

Under the Clinton administration, Tyson served as Chair of the President’s Council of Economic Advisers from 1993 to 1995 and as Director of the White House National Economic Council from 1995 to 1996. She was the first woman to hold those positions.

Much of Tyson’s recent research focuses on the effects of automation on the future of work. She has also devoted considerable policy attention to the links between women’s rights and national economic performance.

The new council will meet with and advise Gov. Newsom upon request. The group will be guided by the Department of Finance’s Chief Economist Irena Asmundson.

 

 

 

 

Kellie McElhaney named to “Most Influential Women in Bay Area Business” list

Kellie McElhaney in classroom teaching.
Kellie McElhaney teaches students to be “equity fluent leaders.”

Kellie McElhaney, distinguished teaching fellow and founding executive director of the Center for Equity, Gender, & Leadership at Berkeley Haas, has been named among the “Most Influential Women in Bay Area Business” by the San Francisco Business Times.

McElhaney was featured among more than 100 Bay Area women leaders in real estate, law, tech, finance, health care, and education, among other industries. The women chosen all share a passion for what they do and are leaders in their organizations and their communities, according to the SF Business Times.

McElhaney joined Berkeley Haas in 2002 as an adjunct professor and founded the Center for Responsible Business, serving as its executive director. In 2008, The Financial Times rated Haas #1 in the world for corporate social responsibility.

Over the years, McElhaney has been interviewed as an expert on gender equity and inclusiveness, women in business leadership, the gender pay gap, and #MeToo by media outlets ranging from Bloomberg and The Washington Post to NPR and Forbes.

McElhaney, who earned a PhD from the University of Michigan, told the SF Business Times that her biggest professional accomplishment was being dubbed “chief inspiration officer” by her MBA students. She said she’s also proud of teaching more than 1,000 Berkeley students a year to be “equity fluent leaders,” a term she uses to describe leaders who understand inclusiveness and how to lead people from all gender and ethnic backgrounds. McElhaney is currently teaching “The Value of Equity Fluent Leadership” across all degree programs.

She said the biggest challenge of her career was finding her voice to stand up to gender discrimination and harassment. “I’ve learned that I need to practice what I teach, and that by speaking up, I help countless women, not just myself.”

Her sister, Mary Lynne, is her personal hero, she said. A triathlete who weathered difficult professional and personal circumstances after she came out, her sister was able to reclaim “her authentic self,” McElhaney said.

“She’s a fearless big sis crusader for me and always has my back,” she said.

McElhaney, the mother of two college-age daughters, serves on the board of Sierra Global Management LLC and is involved in the community as a board member of the national nonprofit Empower Her Network. She also serves on the gender equity committee for the California Athletics Board.

MBA students fight the gender pay gap—one offer at a time

While she was working at Microsoft several years ago, Christina Chavez, MBA 19, logged into an anonymous online job compensation board called Blind and was shocked to see the tech gender pay gap in plain sight.

“People were posting their data, and we started saying ‘whoah’ there’s some major differences in how our colleagues are getting paid,” said Chavez, who will start working at Google after graduation.

With these numbers top of mind, pay equity and transparency was a top goal for Chavez when she arrived at Berkeley Haas. She put that priority into action last fall when she and classmate Jack Anderson—a fellow member of the student-led Haas Gender Equity Initiative—set up a new spreadsheet where classmates can share all the details of their compensation packages. (The spreadsheet is managed by Jordan Sale, MBA 19, and founder of startup 81cents, which provides salary support for women during job negotiations.)

Using salary data and research provided by Berkeley Haas Prof. Laura Kray, the students created a Haas Wage Gap Infographic, which shows that women who graduated from Haas last year earned 96% of what their male peers earned. But the more concerning finding was that for alumni with greater than 10 years experience, the salary gap between men and women widened.

“We earned 96 cents to the dollar in the last MBA class and people were like ‘yeah we’re approaching equity,’ but this gap grows over time,” Chavez said.

Christina Chavez
Christina Chavez 

Moving toward transparency

The Haas students launched this project to expand what’s offered through CMG Bears —the Haas Career Management Group’s tool that allows MBA students to anonymously enter and look up salary data based on company and job role. The database offers a wealth of information, but doesn’t track salaries by gender.

Abby Scott, assistant dean of MBA Career Management and Corporate Partnerships, who worked with the students to provide historical data for the project, said the long-term salary gap is a concern. She added that Haas is working to add gender identification to CMG Bears to provide as much context to the salary data as possible.

“I don’t think that we know the real cause of the long-term pay gap, but we are advising students to make sure they’re negotiating salary and thinking beyond compensation—and we speak frequently to women about both the importance of negotiation and taking on leadership roles,” she said.

By many estimates, American women working full time earn about 80% to 85% of what men earn (a statistic that varies by race/ethnicity and how it’s measured). Kellie McElhaney, founding director of the Center for Equity, Gender, and Leadership (EGAL) at Haas, said transparency is a critical weapon in the fight to close the pay gap. “Knowledge is power,” she said, noting that a growing group of companies such as Salesforce, Gap, and Google have been moving in the right direction, toward public reporting of compensation.

In recent research, Prof. Kray and Margaret Lee, a postdoctoral research fellow sponsored by the Center for Equity, Gender, and Leadership (EGAL), looked at the Berkeley Haas alumni surveys of full-time professionals who graduated between 1994 and 2014. The researchers found that while men’s base salaries were on average about 8 percent higher than women’s, it’s in the bonuses, share values, and options—which tend to not be tracked as publicly as salaries—where the men’s salaries outpaced women’s. Overall compensation for Haas women MBAs averaged about $290,000, or about 66 percent of men’s $439,000 average. Kray and Lee also linked part of the pay gap to the fact that men manage larger teams than equally qualified women.

Tricky negotiations

It’s the company shares and stock options that are trickier in negotiations and not often tracked, Anderson said, adding that for some reason, male MBAs appear to fare better in those areas after graduating from Haas.

Jack Anderson
Jack Anderson

“That’s the thing that jumped out to me: how much of the offer goes beyond base compensation [salary and signing bonus],” he said. “So many companies are offering other compensation, RSUs (restricted stock units), and stock options. It drove us to think about how important it is for people to understand this and to get some basis for comparison. We need to work on how we display that information for people.”

But that might not be enough. In their research, Kray and Lee found that the problem goes far deeper than negotiation skills, pointing toward a bias about leadership that leads men to be put in charge of larger teams than equally-qualified women, and get paid more because of it.

McElhaney agreed that better negotiating skills will only go so far—if it comes down to the basic fact that managers just want to pay men more and that women are facing entrenched bias.

“You can change processes but the long-term problem is people’s individual biases,” she said. “If they believe things like men do a better job at leading big teams, or that women bosses are unlikable, this is unconscious and conscious bias at work.”

To access the new spreadsheet, students must agree to share their own salary data anonymously, including their preferred gender, job title and function, years of post-college work experience, geographic location of the job offer, and compensation details, including base salary, bonus, and any equity package offered. All students are asked whether they negotiated their compensation— and if so, to include the initial and final offers. So far, 58 students in the 2019 MBA class who have received job offers have added data to the sheet—split about evenly between men and women.

Classified: Empowering undergrads to be changemakers

“Classified” is a series spotlighting some of the more powerful lessons faculty are teaching in Haas classrooms.

Alex Budak teaches a new undergraduate course called Becoming a Changemaker
Alex Budak teaches a new undergraduate course called Becoming a Changemaker.

Nearly 40 students poured out of the Chou Hall elevators on a recent morning on a strange mission: to find ways to get rejected in less than 15 minutes.

One student told a passerby it was her birthday. “Could you sing ‘Happy Birthday’ to me?” she asked.  Another offered to swap his jacket for a person’s laptop. Yet another went from table to table at Café Think, asking for bites of food.

The exercise may sound like improv, but it’s just part of Haas Lecturer Alex Budak’s new undergraduate course called Becoming a Changemaker. The course aims to inspire and empower future leaders with the mindset and tools to make a positive impact on the world—a mission that includes learning to overcome fear of failure by confronting it head-on.

“If you seek to do anything innovative or meaningful in your life, you’re inevitably going to fail along the way,” Budak said. “It’s one thing to intellectualize failure, but it’s another to feel it personally. How often do we hold back asking for something because we’re sure we’ll fail when in reality we may not? We’re failing even before we try.”

Turning panic into confidence

The rejection exercise is just one example of how Becoming a Changemaker tries to upend traditional notions of leadership. In follow-up interviews, students described how a near sense of panic turned to newfound confidence as they practiced asking for something and not getting it.

“It was one of the most powerful educational experiences I’ve ever had,” said Nye Avilla, BS 20, who overcame her fear of asking people if she could borrow their umbrellas. Despite getting rebuffed time and again, she basically realized it was no big deal to ask. “By being more open to failure, I know now that I can be a better leader and a better individual.”

The course includes a little improv, with a goal of creating leaders.
The course uses many tools (including this “act it out” exercise) to create a new kind of leader.

The students were also struck by how many strangers agreed to their outlandish requests, because it reminded them that people do want to help and that their own reticence can be inhibiting.

“Outdated notions of leadership tell young people to wait their turn; to wait for permission to lead,” Budak said. “But while leaders might be scarce, leadership is abundant. We can all lead positive change from wherever we are, whether we’re an intern or a CEO. Leadership is not a title; it’s an act. This course reflects the Haas commitment to building a different kind of leader.”

That’s why the Haas Defining Leadership Principles—Question the Status Quo, Confidence Without Attitude, Student Always, and Beyond Yourself—are woven throughout the course curriculum, he said.

The sum of “small, daily acts”

Students say the course has fundamentally changed how they think about leadership and has transformed how they see themselves in the world.

Sarika Saksena, for example, was 14 years old when she launched a nonprofit, Ujala, that has taught more than 1,000 women in India how to make and sell candles to gain financial independence. Despite her success and experience, the self-described introvert says she never thought she had what it takes to succeed as a leader.

“Before this class, I believed, like many others, that successful leaders are always extroverts, outspoken, bold, and dominating,” said Saksena, a freshman who plans to apply to Haas. She said Budak has taught her that leadership instead requires, among other things, humility, trust in yourself and others, a collaborative team spirit, and the resilience to “fail forward” after taking calculated risks. She sees leadership now as the sum of these small, daily acts that are within anyone’s reach.

Adeel Cheema, a senior computer science major who will work as a software engineer at Facebook after he graduates in May, said he didn’t know what leadership in a culture meant before taking the course. “Now I know how to lead culture,” he says.

Budak gives students many opportunities to put what they learn into practice. Throughout weekly two-hour sessions, students break into groups to discuss the topic at hand—including, for example, the role of corporate cultures on change—and their own experiences with it.

Budak’s teaching approach is to help all students recognize their capabilities as changemakers, which involves many techniques. When students arrive in class, they’re greeted with classic songs about change by the likes of Tracy Chapman, Bob Dylan, and Sam Cooke, and written quotes from some of history’s greatest changemakers. His “Changemaker of the Week” exercise gets students to select a favorite change agent and present on how course frameworks and theories apply to their impact.  For their final projects, students will work in small teams to identify a positive change they want to make on campus, in the community, or even globally, and develop a strategy for achieving it.

“A dream come true”

Budak says his commitment to fostering changemakers is deeply personal. In 2010, he co-founded the social enterprise StartSomeGood, which has helped over 1,000 people in 50 countries raise over $10 million to launch and scale new social ventures. He joined Haas in 2016, first as the founding executive director of the former UC Berkeley Center for Reinventing Leadership, and then as the director of the Berkeley Haas Global Access Program. Becoming a Changemaker is Budak’s first foray into teaching and, he says, a decade-long dream come true.

For their final projects, students will work in small teams to identify a positive change they want to make.
For their final projects, students will work in small teams to identify a positive change they want to make.

“In a world where the only constant is change, our companies, our communities, and our world are yearning for changemakers who can not just survive change but can leverage it to improve lives. These students give me so much hope for the future.” he said.

Ibrahim Balde, BS 20, said the course has opened his eyes to the leader he wants to be and has helped him gain confidence. Balde, who is active in student organizations such as Faces of African Muslims and Black Collectivism for California Students, came to Haas with visions of one day helping disadvantaged groups find economic empowerment.

Balde said the class, with its focus on putting lessons into practice, has been a welcome balance to courses in microeconomics and other technical business subjects.

“This class allows me to think about my mission and purpose and to understand that leadership isn’t a defined trait,” Balde said. “It’s a series of actions, a conscious effort every day to do the right thing.”

Choreographing Haas’ future: New Dean Ann Harrison outlines her plans to advance Haas

Dean Ann HarrisonBerkeley Haas Dean Ann Harrison grew up with an insatiable curiosity and a dream to make the world a better place.

No surprise, then, that she ended up at Berkeley—first as a double major in history and economics and later, after receiving a PhD in economics from Princeton, as a professor in the Department of Agricultural & Resource Economics from 2001 until 2011. She then joined the World Bank as director of development policy and after that the Wharton School of Business, where she gained international acclaim for her research on foreign investment and multinational firms. On January 1, Harrison “came home” to Berkeley once more—this time to serve as the 15th dean of Berkeley Haas.

She recently spoke to BerkeleyHaas magazine about her early years on campus, her groundbreaking research, and her plans for strengthening Haas as a leader in 21st century business education.

What was your experience as a Cal undergrad?

Being a Berkeley student and growing up in the Bay Area pretty much shaped who I am today. I had an independent streak and had hiked all over California by the time I was in junior high. I remember campaigning door-to-door in support of a statewide ballot initiative to protect our coastline. When I came to Berkeley, I lived in a co-op on the North Side. I was—and still am—into modern dance and loved that I could take dance classes on campus from former stars with the Martha Graham company and go to Zellerbach Hall and see great performances. I wrote dance reviews for the Daily Cal and was elected to the ASUC senate.

How did you get interested in economics?

I started off as a history major with a plan to go to law school. But then I took economics and loved it. One day I saw a posting for someone to do the grading for Econ 101A and the professor, Leo Simon, hired me—although he was taking a bit of a risk since I was an undergraduate. He became my mentor and convinced me to get a PhD. He really changed my life. After college I became a health economist at Kaiser Foundation Health Plan. It opened my world to the power of data. Kaiser had millions of members, and I would stay in the office until 10:00 p.m., just analyzing the data.

How did your time at the World Bank shape you as a leader?

It taught me diplomacy, patience, and how people can do amazing things when they have the will to work together. After the financial crisis a decade ago, the bank’s lending tripled but its overall budget stayed flat. So, there was a lot of competition internally for fewer resources. The different parts of the bank were able to overcome that because of the strong relationships between people.

You are a much-cited scholar in your field. What inspires your research?

As a trade economist, I’m interested in real-world questions and their policy implications. What I find most interesting are big-picture policy issues. During my first business trip to India in 1986, I was part of a team that helped the Indian government formulate policies to increase competition and reduce monopoly power. To be able to take part in a project that helps economies solve problems in real time is very satisfying.

The question I have been most obsessed with recently is whether rising international competition has led to job losses and stagnating wages for the American worker—and whether free-trade economists miscalculated the costs of globalization or whether trade is just a scapegoat. I’ve concluded through my research that China is not the culprit. The cause of all those job losses is automation. The Factory-Free Economy, a book I co-edited with French economist Lionel Fontagné, looks at what will happen to high-income economies when many tasks become automated and jobs that used to exist are done by machines.

Read the full interview here.

Dean Harrison to share her vision for Haas

<em>Haas Dean Ann Harrison. Photo: Noah Berger</em>
Haas Dean Ann Harrison. Photo: Noah Berger

Dean Ann E. Harrison will share her priorities for her first 90 days in a discussion with former Dean Laura Tyson to kick off the spring Dean’s Speaker Series next month.

The event, planned during the anniversary week of the Haas Defining Leadership Principles, will be held Tuesday, Feb. 5, at 12:30pm in Chou Hall’s Spieker Forum.

It’s the 9th  anniversary of the principles: Question the Status Quo, Confidence Without Attitude, Students Always and Beyond Yourself, four phrases that have come to be widely associated with Berkeley Haas.

In conversation with Tyson, Harrison will share her vision for Haas, her take on the Defining Leadership Principles, and her leadership approach.

Harrison began her tenure as Haas dean this month. The former William H. Wurster Professor of Multinational Management and Professor of Business Economics and Public Policy at the University of Pennsylvania’s Wharton School, Harrison has a deep Berkeley history. 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 and Resource Economics from 2001 to 2011.

A Q&A will follow the talk, which will be posted after the event on the DSS web page.

Registration is required for the free event, which is open to the Haas community and invited guests.

Doors will open at noon and a light lunch will be served.

Upcoming events in the Dean’s Speaker Series include:

Laurene Powell Jobs

(First Annual Chris Boskin Deans’ Speaker Series in Business and Journalism)
A conversation with Laurene Powell Jobs, Founder and President of Emerson Collective

Thursday, February 7
12:30-1:30pm
Spieker Forum

David Aaker

Professor Emeritus, Haas School of Business

Tuesday, March 5
12:30-1:30pm
Spieker Forum

A Berkeley homecoming: Q&A with incoming Dean Ann Harrison

Incoming Haas Dean Ann E. Harrison
Incoming Haas Dean Ann E. Harrison has deep Berkeley roots.

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.

Haas Professor Laura Tyson named business school’s interim dean

Haas Interim Dean Laura Tyson
Haas Interim Dean Laura Tyson. Photo: Karl Nielsen

Laura D’Andrea Tyson, renowned economist at the University of California, Berkeley, Haas School of Business, has been named the school’s interim dean as of July 1, Berkeley Chancellor Carol Christ announced today.

Tyson joined the Berkeley Economics Department in 1977 and the Haas faculty in 1990.  She was the dean of the Haas School from 1998 to 2001. She also served as dean of London Business School from 2002 until 2006. She has graciously agreed to serve as interim dean at Berkeley Haas while the chancellor’s office continues to work on recruiting a permanent dean. The chancellor’s office hopes to have a new dean named and in place this fall.

“We are so fortunate that somebody as able and uniquely qualified for this role as Professor Tyson is willing to step in and help the school during this leadership transition,” said Chancellor Christ. “When Laura was dean of Berkeley Haas, she initiated many important programs that laid the foundation for the school’s financial and reputational strengths today. Haas couldn’t be in better hands.”

Tyson succeeds Professor Richard K. Lyons, who has served as the Haas School dean for 11 years. Lyons will to return to his full-time faculty position at Haas next year following a well-deserved sabbatical.

“The Berkeley Haas community recognizes and appreciates the enormous contributions that Dean Lyons has made during his deanship,” said Tyson. “I am honored by the opportunity to serve our community during the transition to the new dean.”

Currently, Tyson is a Distinguished Professor of the Graduate School and serves as the faculty director of the Haas School’s Institute for Business and Social Impact, which she launched in 2013. The Institute houses the Centers for Responsible Business (CRB), Social Sector Leadership (CSSL), and Equity, Gender & Leadership (EGaL); the Global Social Venture Competition, BOOST and B-BAY. Tyson also chairs the Board of Trustees at the Blum Center for Developing Economies at UC Berkeley.

Tyson is an influential scholar of economics and public policy and an expert on trade and competitiveness. She served as Chair of the President’s Council of Economic Advisers from 1993 to 1995 and as Director of the White House National Economic Council from 1995 to 1996. She was the first woman to serve in these two positions.

Tyson is a Fellow of the American Academy of Arts and Sciences. She serves on three corporate boards and as an advisor to or member of several advisory boards for nonprofit and for-profit organizations.

Tyson has devoted some of her policy attention to the links between women’s rights and national economic performance. At the World Economic Forum (WEF), she is the co-chair of the Global Future Council on Education, Gender and Work and is a Stewardship Board member of the System Initiative on Education, Gender and Work. She is the co-author of the WEF Annual Global Gender Gap Report, which ranks nations on economic, political, education, and health gender gaps. She is also the co-author of Leave No One Behind, a report for the United Nation’s High-Level Panel on Women’s Economic Empowerment (2016).

Much of Tyson’s recent research focuses on the effects of automation on the future of work. She is the co-organizer of WITS (Work and Intelligent Tools and System), an interdisciplinary faculty group created to explore the impacts of digital technologies and artificial intelligence on working, earning, and learning.

The in-crowd: New book makes case for “Radical Inclusion”

Berkeley Haas Lecturer Ori BrafmanAs an undergrad at Berkeley, Ori Brafman had been many things—a peace and conflict studies major, anti-war protestor, and vegan activist whose McVegan campaign had taken on McDonald’s and won. The last place he thought he’d find himself a decade later was in the office of a 4-star army general. “At the time, I had no idea what a 4-star general was,” admits Brafman, BA 97, a Berkeley Haas lecturer who teaches improvisational leadership in the MBA and undergraduate programs. “My first question was, ‘Is there a 5-star general?’”

Yet, that meeting in 2009 with Former Chairman of the Joint Chiefs of Staff Martin Dempsy would lead to an unlikely collaboration examining just how much the definition of leadership has changed in the era between the Twin Towers attack and the rise of “fake news.” Their ongoing conversation has culminated in the publication of a new book, Radical Inclusion: What the Post-9/11 World Should Have Taught Us About Leadership.

The economic case for inclusion

The book makes the case that in military bunkers and corporate boardrooms alike, leadership today means bringing everyone into the fold.

“Typically we look at inclusion as something that’s nice to have from a psychological perspective,” Brafman says. But he and Dempsey argue that including everyone in a way that gives them stake in decision-making makes economic sense as well. Members of an organization who don’t feel a sense of buy-in will be a drag on productivity, or jump ship altogether, costing time and energy in finding their replacements. “From an economic perspective, you are actually paying a cost for control. You need to ask yourself if you could achieve the results through inclusion in a more economically efficient way,” Brafman says.

At the same time, inclusion is vital to communication, for leaders to both receive and transmit essential truths. “You need inclusion to get better information from the edges of the network and also to be able to analyze that data. And you need enough different people around you, so you are not surprised by a piece of data when it comes in,” Brafman says.

Radical inclusion lessons from Burning Man

Dempsey contacted Brafman after the publication of his first book, the Starfish and the Spider, which argues for the effectiveness of distributed networks over top-down hierarchy. A New York Times bestseller, the book resonated with everyone from Greenpeace to the Tea Party. It also struck a chord in the military, which had been struggling to diffuse authority in order to counter the threat posed by distributed terrorist networks in the wake of 9/11.

In their first meeting, Brafman showed the general slides from Burning Man, the famously hedonistic annual gathering of artists and iconoclasts in the Nevada desert. The power of the event, Brafman insisted, came from the fact that everyone is welcomed—and everyone is encouraged to participate—creating an intimate sense of shared purpose among diverse individuals which enables them to create a successful gathering in the harshest of conditions.

As Brafman began talking to Dempsey, however, he realized that he had just as much to learn from the Army’s strengths in this same area. “A big part of their sauce is that they engender a sense of belonging,” he says. That sense of belonging is the first key to inclusion, the authors write. “The most important responsibility of leaders—no matter how busy they are and how many other priorities demand their attention—is to make their people feel like they belong.” The way to do that, they continue, is to devote time into building shared memories—whether it’s a kind word in the hallway or on the battlefield, or an unexpected phone call or visit—that makes people feel like they are valued participants whose work matters to the organization.

Amplifying voices

Beyond making employees feel included, Brafman and Dempsey say, leaders must also communicate both inside and outside the organization in an inclusive way. In a world of distributed information, organizations can no longer count on persuading audiences with facts alone. As organizations compete with viral videos and “fake news,” they must also create the best story. “As a leader you are responsible for creating a narrative of the organization both internally and externally,” says Brafman. “Then your job becomes how do I create a sense of ownership and involvement with that narrative.”

Brafman and Dempsey further distill their own message into six leadership lessons, such as “Co-Create Context” and “Relinquish Control,” which help to apply the principles of inclusion to create a successful organization. “If you are saying I need to control my people, then you might have control, but you are not going to win in this market,” Brafman says. “Right now, listening and amplifying voices and winning the competition of narratives is much more important.”

22nd Women In Leadership conference to focus on evolution of gender equality

WIL Conference leadership team
Members of the WIL conference team

Uprisings around #metoo, women’s marches, and inclusion and diversity in Hollywood and beyond defined 2017, sparking fierce conversations on feminism, gender equity, and social justice.

The March 17 Women In Leadership (WIL) conference will continue that conversation, taking participants through three different stages of leadership and careers under this year’s theme, “Evolve.”

The 22nd annual conference is expected to attract more than 400 students, alumni, and other professionals to campus. It’s the longest-running student-led conference at Haas, providing a platform for students and professionals to hear from women leaders, understand challenges, and find ways to advance the conversation.

Co-chairs Mackenzie Cooke, MBA 18, and Mary Harty, MBA 18, have worked with a team over the last year to plan the conference.

“This conference differs from past conferences for its focus on the phases of a woman’s journey to leadership, which we hope will make it relevant for undergrads through C-suite executives,” Cooke said. “We want attendees to be exposed to a variety of perspectives to both educate them on issues with which they may not be familiar and challenge previously held beliefs. We want attendees to think the content is relevant and diverse, and we want them to leave feeling like this was a worthwhile investment of their time and energy.”

Making progress

Larissa Roesch
Keynote speaker Larissa Roesch

Throughout the day, attendees will move through Develop, Progress, and Advance workshops and panels to discuss gender roles, challenges in the workplace, and how men and women can be supporters and allies throughout their journeys. A morning session, for example, discusses the societal and cultural influences on women and how messaging influences their definition of self.

One of the unique aspects of WIL is the “story salon,” a live storytelling format that Cooke says is an integral part of the Haas culture. A group of women will be sharing their personal stories in a salon session called “Visualizing Ourselves as Leaders.”

The day will feature more than a dozen speakers, varying from executives and storytellers to startup leaders and consultants. One of this year’s keynote speakers, Larissa Roesch, MBA 97, is a founding advisory board member of the Center for Gender, Equity & Leadership, the new center on campus that collaborated with Women in Leadership. Roesch is currently vice president and portfolio manager at San Francisco-based investment company Dodge & Cox.

In her keynote, Roesch will be addressing what to focus on in order to achieve equal pay, diverse leadership teams, and more women in business. Research and technology over the years have helped advance those conversations, she said.

Roesch is no stranger to the conference. While at Haas, she helped plan the second WIL conference and was the first woman to serve as president of the MBAA. She joined Dodge & Cox 20 years ago, after graduating from Haas.

The WIL conference in its early years was a pretty novel idea, she said.

“The concept of women in leadership was less developed, although obviously it’s been a long trajectory,” she said. “One thing that I know has changed now is there are men in the Women In Leadership club and male students to help organize the conference. I think that’s really positive just reflecting the notion that it needs to be an inclusive discussion in order to affect change,” Roesch said.

Haas research on leadership featured in 60th anniversary journal

California Management Review 60th Anniversary editionNational Energy Finance CompetitionA special 60th anniversary issue of California Management Review features seven articles by Berkeley Haas faculty exploring different aspects of leadership—from incentives for innovation to recognizing women’s unique qualities as negotiators.

The articles in the Fall 2017 journal issue not only show the breadth of Haas faculty research, but also reflect the school’s increasing focus on leadership, writes editor and Prof. Emeritus David Vogel, in the introduction. Haas culture is codified in four defining leadership principles: Question the Status Quo; Confidence Without Attitude, Students Always and Beyond Yourself.

“Each of the Haas School’s four defining principles are essentially about dimensions of leadership,” Vogel said.

As the Haas School’s quarterly peer-reviewed journal, California Management Review serves as bridge of communication between those who study management and those who practice it.

The journal opens with research by Prof. Don Moore pointing out that decades of research on hiring indicates that face-to-face job interviews are terrible at predicting future performance—yet companies continue to use them. In “How to Improve the Accuracy and Reduce the Cost of Personnel Selection,” Moore shows that there more effective and efficient alternatives, including structuring interviews around tests of key skills and abilities.

In “Creating Incentives for Innovation,” Prof. Gustavo Manso presents research demonstrating how employees can be encouraged to experiment by creating incentive systems that both tolerate early failures and reward long-term performance.

Prof. Laura Kray, who has long studied gender differences, writes that women possess unique advantages as negotiators—including stronger ethics and higher levels of cooperation. Yet women still face stereotypes of being poor advocates for themselves. “Changing the Narrative: Women as Negotiators—and Leaders,” co-authored by Jessica A. Kennedy of Vanderbilt University, presents practical strategies for managers and negotiators to change the narrative and close performance gaps.

In “Who’s Really Doing the Work? The Impact of Group Size on Over-Claiming of Responsibility,” Asst. Prof. Juliana Schroeder explores a pervasive phenomenon in today’s workplaces: people believing that they’ve done more than their fair share of work. The article looks at predictors of “over-claiming,” and presents practical steps that managers can use to reduce the damaging effects.

Other articles in the special issue also include a bottom-up look at the relationship between language and corporate culture by Prof. Sameer Srivastava and Amir Goldberg of Stanford; a piece by adj. profs Nora Silver and Paul Jansen on multisector careers; and an article by Center for Responsible Business Exec. Director Robert Strand and Dara O’Rourke, an associate environmental science professor, on the tensions Patagonia has faced in pursuing sustainability and quality products that may have environmental impacts.

Classified: The slam-dunk case for investing in women in business

“Classified” is an occasional series spotlighting some of the more powerful lessons being taught in classrooms around Haas.

Kellie McElhaney teaches her course, "The Business Case of Investing in Women.
Assoc. Adj. Prof. Kellie McElhaney teaching a session of her course, “The Business Case for Investing in Women”

Class discussions about sex trafficking, crash test dummies designed to match male—but not female—physiology, and the challenges a breast pump company faced in attracting venture capital were unsettling.

But it wasn’t until the conversation turned to the relatively mundane acts of sexism women encounter daily—such as unwanted advances at business dinners—that Federico Locatelli, MBA 18, spoke up.

“I didn’t really understand before what women have to deal with,” said Locatelli, one of the ten men in Kellie McElhaney’s class “The Business Case for Investing in Women.” “It’s been completely mind-blowing.”

For McElhaney, an associate adjunct professor who created the course four years ago, Locatelli’s discomfort isn’t a reason to stop the conversation, but rather a justification to blow it wide open.

“This is about pushing people out of their comfort zones so that they can then become leaders who can handle uncomfortable discussions later on,” McElhaney said.

The business case for investing in women
A student makes a point during a class session.

Building a case

The idea for an MBA course focused on gender equity first came to McElhaney about a decade ago while she was serving as director of the Center for Responsible Business at Haas. McElhaney had uncovered a correlation between Fortune 500 companies’ performance on a closely-watched sustainability index and the presence of women directors on its board. That data point alone suggested there was a business case—not just an ethical one—for gender diversity in the workplace.

Kellie McElhaney teaching her course, "The Business Case for Investing in Women"Over the next few years, as the cultural conversation around women at work gathered momentum, companies started asking McElhaney for more proof of a bottom-line payoff to hiring women.

Students, too, wanted to see data. “In a very constructive way, students would say, ‘Show me the proof that gender equity really matters to a company’s overall success.’”

So, McElhaney gathered statistics which suggested companies with greater numbers of women in leadership have higher share prices and better returns on equity and investment than companies with fewer women. She cites companies like Patagonia, which has publicly detailed how its on-site childcare nearly pays for itself.

When McElhaney started the course in 2013, she structured it almost entirely around the data. The class proved so popular that students awarded her an Earl F. Cheit Award for Excellence in Teaching. Next month, McElhaney is also launching the Center on Gender, Equity & Leadership to take her work to the next level.

“Kellie is a firecracker—passionate, smart, challenging, and funny,” says Jennifer Hoss, MBA 18. “She takes a very pragmatic approach of ‘nobody is asking for any favors.’ At the same time, this class is a great exercise in empathy.”

Hoss said she enjoyed seeing the diversity of opinions, even among women. “You realize that each person experiences gender issues in a different way. We have 30 different women and 30 different viewpoints on how wrong or not-wrong a situation is,” she said.

A student in Kellie McElhaney's course, "The Business Case for Investing in Women"

Exploring intersectionality

The course also delves into the added challenges that minority women encounter. McElhaney shared a breakdown of data showing that white women are making most of the workplace gains while minority groups either are flat-lining or losing ground.

Victoria Whittaker, MBA 18, who is African-American and Latina, said that when it comes to gender, race, and sexuality, “we tend to separate the issues.”

Shedding light on the intersectionality of an issue like gender helps raise awareness that there can many different experiences and perceptions that influence people’s world views, she said. “As business leaders and managers, it’s imperative that we start to recognize, think about, and appreciate all the different facets people bring when they walk into the workplace,” she said.

Are diversity and inclusion valued?

Many of McElhaney’s students, including Locatelli, are intent on using their newfound awareness to advocate for women. “Students—and this is also true for the companies I talk to—understand the data,” McElhaney said. “Now they want tools to create change.”

One assignment McElhaney gives students is to write formal assessments of a company’s track record on the hiring, retention, and promotion of women. The head of global HR at Airbnb was so impressed with a student presentation—which McElhaney sent unsolicited—that she asked the students to speak to company executives about it.

Students also discuss real-life workplace issues with guest speakers.

In October, a speaker admitted how shocked he was when a valued female executive at his company disclosed in her exit interview that she didn’t feel as though diversity and inclusion were valued. Looking to uncover insights like these sooner, he instituted “stay” interviews for current employees.

A student in Kellie McElhaney's course "The Business Case for Investing in Women"

Designing a personal leadership strategy

McElhaney also challenges students to consider their own experiences with gender discrimination or harassment, including how they’ve responded to past incidents and how they could have reacted differently. For a session that delved into how men impact gender issues, students were required to bring a male friend to observe the class.

Finally, students create a detailed personal leadership strategy.

“You’re at Haas to learn about business strategy,” McElhaney tells students. “You’re also here to learn leadership skills. So, how are you going to build gender awareness into your leadership style?”

Lydia Cole, EWMBA 18, came to the class looking for facts and figures to help her self-advocate in her career. She’s learned instead that proof of women’s value in the workplace won’t be as important as her ability to lead by example.

“My attitude before was cynical,” said Cole. “Kellie’s class has taught me how to be a better employee, a better manager, a better leader, and a better person.”

Are politicians smarter than CEOs?

Swedish Parliament Member Jonas Sjöstedt and Prime Minister Stefan Löfven. Creative Commons photo
Swedish Parliament Member Jonas Sjöstedt and Prime Minister Stefan Löfven (Photo by Phil Jamieson 2014; Creative Commons license)

While Americans’ approval of their Congressional representatives are near record lows, new research shows that politicians aren’t necessarily a bunch of good-for- nothings—at least in Sweden.

Prof. Ernesto Dal Bó and four colleagues analyzed a rich trove of public data and found that Swedish voters consistently elect officials who are, on average, significantly smarter and better leaders than the populations they represent.

“We found evidence that there are plenty of great people available in politics,” said Dal Bó, the Phillips Girgich Professor of Business at Berkeley-Haas. “Moreover, among those candidates who happen to be available, it’s the relatively better ones who make it to the higher echelons of the political structure.”

His paper, “Who Becomes a Politician?” focused on the patterns of how municipal politicians and national legislators were chosen in Sweden over a 30-year period. It was co-authored with Berkeley-Haas Assoc. Professor Frederico Finan; Prof. Torsten Persson and Assoc. Prof. Johanna Rickne of Stockholm University; and Uppsala University researcher Olle Folke. The paper was published by the Oxford University Press in the November 2017 issue of The Quarterly Journal of Economics.

Existing economic research argues that higher-income, smarter people have far more to lose financially when they run for public office, so it’s the less qualified who end up serving. In addition, an old criticism of democracy is that extending the vote to everyone—including those who are less qualified—may result in the election of low quality leaders. Dal Bó and his team took those arguments to task, questioning whether candidates can be both representative of their constituents and highly qualified to serve them.

Building a database

The authors chose to Sweden as a research test bed for several reasons.

First, as an advanced democracy with proportional-representation elections, Sweden has remained stable and fully democratic since 1917. If democracy cannot select leaders who are both representative and competent under such favorable circumstances, then critics of democracy must be right, Dal Bo argued.

Second, the country offered something they couldn’t find elsewhere: a public set of administrative data on males conscripted into the Swedish military between 1951 to 1980. The data included mandatory IQ and leadership tests the military gave between those dates.

The military used two scores during enlistment: a general intelligence test which included problem solving, numerical, verbal, spatial, and technology comprehension; and a leadership test that assessed teachable skills and measures social maturity, psychological energy, intensity, and emotional stability.

The researchers matched that test data with the names of elected members of national parliament and municipal politicians—a total of 50,000 elected candidates who ran for national of municipal office between 1982 and 2010. They also tapped data the Swedish government keeps on all residents over age 16, including age, sex, education level, and occupation, as well as earnings data from the Swedish tax authority.

All combined, they built a complete database of elected officials, test scores, income levels, and family backgrounds.

“Given this information we can precisely characterize how the personal traits of politicians relate to those in the entire population,” the authors wrote.

The researchers reached several conclusions. First, they found that not only do Swedish politicians have higher average IQs and stronger leadership qualities than those they serve, but they are also representative of the electorate: Swedish politics attract competent people beyond the scions of elite families, Dal Bó said.

While ability rises with socioeconomic status, on average, politicians remain highly able when recruited from low socioeconomic backgrounds.

They also found that elected politicians from all socioeconomic levels showed higher cognitive, leadership, and earnings capacity scores than those who simply ran for office.

“In fact, relative to their own social class, politicians from lower social backgrounds are even more strongly selected than politicians from higher social backgrounds,” Dal Bó said.

Mayors versus CEOs

The research even examined competence traits among elected officials and their siblings, and found that among pairs of siblings, “it is the one with the better IQ score, leadership qualities, and earnings capacity who enters politics,” Dal Bó said.

Other surprising findings include:

  • Mayors have exactly the same IQ score as CEOs of medium-size companies (firms of up to 250 employees)—despite earning vastly lower incomes.
  • Elected representatives overall have cognitive and leadership scores similar to CEOs of companies with 10 to 25 employees.
  • Parliamentary legislators had leadership and IQ scores higher than those of CEOs of medium sized companies.

While the results cannot be directly applied to other countries, Sweden could be used as a reference point if data became available from other countries, Dal Bó said. “We have to be careful with country comparisons, but we can now begin to doubt that the only people who run for public office are those who are less intelligent and have less to lose, or that voters may inevitably elect poor leaders.”

“Good leaders are certainly not inevitable under democracy,” he concluded. “But now we know for certain that democracy at least has the capability to select representative and competent politicians.”