Image of Tom Tusher, a former member of the Haas School Board, and Asha Culhane-Husain on a stage in an empty theater. The headline Wayfinders is superimposed onto the photo.

Source: Alumni Magazine

Wayfinders

Fall 2023|By Carol Ghiglieri| Photos by ANGELA DECENZO

The Haas connections that help alumni reimagine business.

Members of the Haas community have been reimagining business for 125 years. But how do fresh ideas and strong determination turn into novel business practices? Well, for one thing, no one breaks new ground in a vacuum. Here, we celebrate some recent graduates aiming to change the world for the better and the members of the Haas community who helped them take their problem-solving to the next level. Their assistance runs the gamut: from a simple introduction or piece of advice to help securing crucial funding. Whatever the support, it was the connection these alumni needed to begin reimagining business.

Bringing Artistry to Venture Capital

Asha Culhane-Husain, BS 18

Asha Culhane-Husain sitting in a row of theater seats.
Asha Culhane-Husain, BS 18, uses her theater training to help leaders deliver captivating pitches for startup funding.

“I believe that entrepreneurs are artists,” says Asha Culhane-Husain. It’s not surprising she emphasizes the artistic side of entrepreneurship: As a business student, Culhane-Husain also double-majored in theater, dance, and performance studies. Now she’s using her diverse talents to infuse artistry into venture capital.

While at Haas, Culhane-Husain interned at a VC firm and thought she might work there after graduation. But being awarded Haas’ Thomas Tusher Scholarship for Study Abroad her junior year changed her life. The scholarship, sponsored by Thomas Tusher, BA 63 (political science), the retired president and COO of Levi Strauss & Co., was created after Tusher’s own “life-altering” study-abroad experience led him to a career in international business. “Not only has Asha turned her time abroad into a unique career trajectory,” says Tusher, “but she’s taken that experience to a new level.”

Culhane-Husain attended Ireland’s National Theater School. After graduating from Haas, she spent three years at France’s national drama academy, the Conservatoire National Supérieur d’Art Dramatique, where she gained extensive conservatory training. She now works as a writer, producer, filmmaker, and actor, yet she remained interested in VC and began to explore how she might apply her artistic talents in the business world.

“In venture capital, the early rounds of funding are largely based on stories—on the team and the idea—because they don’t yet have data,” Culhane-Husain says. And while CEOs are the experts of their field and product, they don’t always have the tools to tell their company’s story effectively—which can mean the difference between securing early-stage funding or not. What if she could help them deliver a pitch that would seal the deal?

Culhane-Husain teaches speakers to…communicate effectively and captivate a boardroom or audience.

Stephen Etter, BS 83, MBA 89, faculty member, Berkeley Haas.

Her former Haas instructor Stephen Etter, BS 83, MBA 89 (shown right), had never heard of anyone doing what she was proposing. “I’ve been teaching for 27 years, and no day has there been such a talented individual in arts and business,” he says of Culhane-Husain.

This past year, Culhane-Husain worked with the same VC firm where she once interned, helping management teams use their natural strengths to deliver an effective pitch. Much like a director would bring out the abilities of an actor, Culhane-Husain teaches speakers to control the timbre of their voice, rhythm of speech, and body position to communicate effectively and captivate a boardroom or audience.

Culhane-Husain is forging her path as she goes. The Tusher Scholarship supported her in pursuing her artistic passion, and now, consulting for the VC firm, she gets to combine her skills in business and the arts. “It’s all coming full circle,” she says

Manny Smith, MBA 21, founder & CEO, EdVisorly.

Making Four-Year Colleges Accessible

Manny Smith, MBA 21

Community colleges were intended to be an on-ramp to a bachelor’s degree for millions of American students. But as Manny Smith (shown left) discovered, the transfer process from a community college to a four-year institution is broken. So he founded EdVisorly to fix it.

Smith didn’t attend community college himself, but he was a first-generation student, and college was never a given. He was offered an appointment to the U.S. Air Force Academy, which included a scholarship and a career path as an Air Force officer. He jumped at the opportunity.

After Smith graduated, his commission included developing technology for the Air Force and Space Force. In 2018, he accompanied a friend to a conference focused on services to support community college students. There he learned how hard it is for talented and motivated students to eventually complete a bachelor’s degree. Across 5 million U.S. community college students who want to obtain a bachelor’s, Smith says, only 2.4% will transfer to a four-year university within two years of beginning their education.

One reason is that the transfer process is complicated: Admissions requirements vary from school to school, and there are few reliable resources for community college students. EdVisorly seeks to bridge the gaps students face through its innovative approach and partnerships with university enrollment teams.

There are few reliable transfer resources for community college students. EdVisorly seeks to bridge the gaps.

On EdVisorly, students can easily connect with admissions teams at universities, discover transfer requirements, create a transfer plan, and apply to schools.

Kurt Beyer, faculty member, Berkeley Haas.

Six months after he began building EdVisorly, Smith took an entrepreneurship class with Kurt Beyer (shown left), which was pivotal. “I knew Dr. Beyer’s class would be catalyzing and provide a foundation for our company to thrive,” Smith says. Beyer, a Navy veteran, emphasized a lot of the principles Smith gained from his military training as being invaluable in starting a company.

This year, EdVisorly received funding from the California Innovation Fund, which invests solely in UC alumni and which Beyer founded. Beyer says he recognized in Smith the makings of a successful founder. “As a former Air Force officer, Manny brought far more leadership acumen than many MBA students. That military background makes him an outstanding entrepreneur.”

With the latest round of funding, EdVisorly is expanding its partnerships across four-year universities nationwide to help more community college students earn their bachelor’s degrees and realize the many opportunities that come with them.

Helping Clean Technologies Break Through

Harshita Mira Venkatesh, MBA 21

Harshita Mira Venkatesh standing in an industrial area with the Bay in the background.
Harshita Mira Venkatesh, MBA 21, turned a simple introduction into an opportunity to bring some of the most promising cleantech innovations to market as a business fellow at Breakthrough Energy.

In many industries, the climate crisis demands new ways of doing things. That’s why Harshita Mira Venkatesh has spent the last two years working to bring some of the most promising cleantech innovations to market as a business fellow at Breakthrough Energy, an umbrella organization founded by Bill Gates. This multi-arm organization is working to develop and accelerate climate solutions in sectors that are particularly hard to decarbonize: think steel, heating, transportation, and food. The focus, Venkatesh explains, “is on technologies that at scale can reduce greenhouse gas emissions by half a gigaton a year or 1% of greenhouse gas emissions annually.”

Brian Steel, co-director, Cleantech to Market.

For Venkatesh, it all started with a simple introduction. She’s always cared deeply about the climate crisis, but before coming to Haas, she had no direct climate experience. That changed when she took Cleantech to Market, an experiential, interdisciplinary program that brings together graduate students from across campus to help entrepreneurs nationwide commercialize emerging cleantech solutions. Each year, C2M Co-director Brian Steel (shown right) invites speakers to talk to the class, and that year, he asked Ashley Grosh, the director of Breakthrough Energy’s Fellows Program, to discuss funding climate solutions.

Venkatesh was intrigued by Grosh’s presentation, and she asked Steel if he would introduce her. Steel was only too happy to oblige. “Harshita clearly realized that this was one of those moments that if left unappreciated for its potential significance would pass her by,” he says. “And she didn’t let that happen.”

Venkatesh and Grosh discussed the Fellows Program, which was just getting off the ground. Later, when Grosh sought input from Steel, he gave Venkatesh a ringing endorsement.

Breakthrough Energy’s Fellows Program pairs two groups of fellows: scientists and engineers who have a climate technology to commercialize and businesspeople like Venkatesh, who use their expertise to help innovators de-risk their technology so it’s marketable. “It’s like Cleantech to Market on steroids,” Venkatesh says. While at Breakthrough Energy, she worked with a pioneering green cement company to develop its go-to-market strategy and helped a climate-friendly ammonia company research beachhead markets and supply chains.

As part of the program’s inaugural cohort, Venkatesh’s two-year tenure ended in September. Now she’s looking forward to her next role and continuing to support climate tech innovations.

Michael Ebel, MBA 17 founder & CEO, Atmosfy.Reimagining Online Reviews

Michael Ebel, MBA 17

Working as a bartender while an undergraduate, Michael Ebel (shown left) saw the power of review sites like Trip Advisor and Yelp. Specifically, he noted the outsized impact a bad review can have on the bottom lines of small businesses. “The average person has a good experience and doesn’t do anything,” Ebel says. “But if they have a bad experience, they run online seeking retribution.”

Ebel thought there had to be a better way, and several years later, while working at Meta, he realized video was it. That epiphany gave birth to Atmosfy, an app that allows users to share videos of their experiences at local businesses so people can see for themselves what an establishment is like. 

Atmosfy launched at the height of the pandemic, a period that was brutal for small businesses. “We thought, if we could get people in San Francisco to take a video of a good experience and say, ‘Hey, this place is still open, come on down and support it,’ wouldn’t that be a difference maker?” says Ebel. “And that is the core mission that kicked us off.”

Toby Stuart, professor and faculty director, Berkeley Haas Entrepreneurship Program.

Atmosfy is a deeply Haas-centric startup. “In almost any helpful dimension you can imagine, we have leveraged that from Haas,” Ebel says. Professor Toby Stuart (shown right) has been a particularly valuable resource. Stuart offered advice and made crucial introductions that helped Ebel secure financing. “Toby was instrumental in helping us think about strategically raising our first round and how to avoid the various pitfalls of fundraising,” Ebel says. “He also provided sound advice on how to build a world-class team that would be critical to our success.”

By the time Ebel called Stuart to talk about Atmosfy, he’d already made enormous progress on an alpha version of the app. Stuart was impressed by how much he’d accomplished. “Usually someone wants to outsource thinking; they come by with a half-baked idea and before making much headway,” Stuart says. “But Michael had done a lot, and he did it on very little money. He demonstrated a ton of conviction and an incredible work ethic.” Stuart also noticed that Ebel never said “I,” he always used the pronoun “we” even though he was a solo founder working mostly on his own. “I thought that was a great sign for someone who’s going to build and lead a team,” Stuart says.

And that team has grown rapidly. Atmosfy is now in 150 countries, showcasing restaurants, bars, and hotels in 10,000 cities. And no doubt more are on the way. In August the company raised $14 million in seed funding, led by Redpoint Ventures.

Editor’s note: In February 2024, Atmosfy was named to Business Insider‘s list of 18 startups disrupting the social media scene with alternative ways to connect online.

Putting Homebuyers in the Driver’s Seat

Matt Parker, EMBA 23

Matt Parker and professional faculty member Maura O’Neill standing outside a home with drought-resistant landscaping.
Matt Parker, EMBA 23, relied on the wisdom and experience of professional faculty member Maura O’Neill, BCEMBA 04, when building his virtual realty company, Alokee. The company name is a combination of the words Aloha and key.

If you’re looking to buy a home, the first order of business is hiring a real estate agent, right? Not necessarily. Matt Parker, the co-founder and CEO of Alokee, wants to transform the real estate landscape by enabling people to buy a home without the expense of an agent. Parker, who founded the company with five Haas classmates, has worked as a real estate agent, so he knows the industry’s downsides. “The way the system is structured, all the business models are based on selling as many homes as fast as possible,” he says. The buyer’s best interest isn’t necessarily a priority.

Alokee is a virtual real estate agent designed for DIYers who may not need an intermediary when shopping for a home.

Alokee wants to change that. Using AI, automation, and the founders’ expertise, Alokee is a virtual real estate agent designed for do-it-yourselfers who may not need an intermediary when shopping for a home. Everything you’d call an agent for, you can do yourself with Alokee, Parker says. “Instead of asking someone when you can view a home, you simply set up a tour. Instead of asking someone to make an offer for you, you just make an offer.” For some buyers, the whole process can be wrapped up in a day. For those who want more help, Alokee provides expert advice from a real estate attorney. The company, currently operating in California with plans to expand, charges a flat fee, which ends up saving buyers a lot of money.

With an all-Haas startup team, the community’s DNA is embedded in the company, and input from Haas advisors is also woven in. Parker and his co-founders were working on Alokee while they took two classes with professional faculty member Maura O’Neill, BCEMBA 04, who instantly knew they had a winning idea. “That part of real estate was just waiting to be disrupted,” O’Neill says. “And here was somebody who actually had the knowledge and had been smart about putting the team together with different kinds of expertise.”

Parker says O’Neill’s vast experience as a serial entrepreneur was indispensable. Yet he says what mattered most was her continual motivation. “She understands that being an entrepreneur is hard. You have these valleys, and Maura is right there telling you these valleys are part of the process.” She told Parker what they were doing well and where they needed to up their game.

Earlier this year, O’Neill and her son were in the market to buy a family house in Oakland, and they used Alokee. “I became the biggest fan imaginable,” she says.

Augmented Intelligence

Fall 2023|By Michael Blanding| Illustrations by Chiara Ghigliazza

The generative artificial intelligence revolution is already happening in the workplace—and it looks nothing like you’d expect.

Since ChatGPT went mainstream this year, many of the news stories about generative artificial intelligence have been full of gloom, if not outright panic. Cautionary tales abound of large language models (LLMs), like ChatGPT, stealing intellectual property or dumbing down creativity, if not putting people out of work entirely. Other news has emphasized the dangers of generative AI—which is capable of responding to queries by generating text, images, and more based on data it’s trained on—such as its propensity to “hallucinate” wrong information or inject bias and toxic content into chats, a potential legal and PR nightmare.

Beyond these legitimate fears, however, many companies are adopting generative AI at a fast clip—and uses inside firms look different from the dire predictions. Companies experimenting with AI have discovered a powerful tool in sales, software development, customer service, and other fields.

On the leading edge of this new frontier, many Berkeley Haas faculty and alumni are discovering how it can augment human intelligence rather than replace human workers, aiming toward increased innovation, creativity, and productivity.

“We’re used to thinking of AI as something that can take repetitive tasks, things humans can do, and just do them a little faster and better,” says Jonathan Heyne, MBA 15, chief operating officer of DeepLearning.AI, an edtech company focused on AI training, who also teaches entrepreneurship at Haas. “But generative AI has the ability to create things that don’t exist—and do it through natural language, so not only software programmers or data scientists can interact with it. That makes it a much more powerful tool.”

More jobs, new jobs

Those capabilities make gen AI ideal for summarizing information, extracting insights from data, and quickly suggesting next steps. A report by a team of researchers from OpenAI, OpenResearch, and the University of Pennsylvania concluded that for 80% of workers, LLMs could affect at least 10% of their tasks, while 20% of workers could see at least 50% of their tasks impacted. Another report by Goldman Sachs predicts two-thirds of jobs could see some degree of AI automation, with gen AI in particular performing a quarter of current work, costing up to 300 million jobs in the U.S. and Europe alone. Yet, the report adds, worker displacement for automation “has historically been offset by creation of new jobs, and the emergence of new occupations following technological innovations accounts for the vast majority of long-run employment growth.”

That’s in line with the findings of Assistant Professor Anastassia Fedyk, whose research has found that AI has been leading to increased sales and employment. In a forthcoming paper in the Journal of Financial Economics, Fedyk and colleagues found that firms’ use of AI led to increased growth for companies through more innovation and creation of new products, which increased both sales and hiring.

Fedyk says that industries with particularly AI-related tasks, such as auditing, could see reductions in workforce over time. For most fields, however, she predicts that the workforce will stay steady but its composition will change. Her new National Bureau of Economic Research working paper studying employment at companies investing in AI found that they were looking for a workforce that was even more highly skilled, highly educated, and technical than other firms. “We’re seeing a lot of growth in jobs like product manager—jobs that help to manage the increase in product varieties and increase in sales,” Fedyk says.

Illustration of a typewriter with computer code on paper and keyboard.An explosion of possibilities

Company conversations about gen AI exploded this spring, says Amit Paka, MBA 11, founder and COO of Fiddler AI, a five-year-old startup that helps firms build trust into AI by monitoring its operation and explaining its black-box decisions. “Generative AI became a board-level conversation,” he says, “even if folks in the market don’t know how they’ll actually implement it.” For now, firms seem more comfortable using gen AI internally rather than in customer-facing roles where it could open them up to liability if something goes wrong.

Obvious applications are creative—for example, using it to generate marketing copy or press releases. But the most common implementations, says Paka, are internal chatbots to help workers access company data, such as human resources policies or industry-specific knowledge bases. More sophisticated implementations are models trained from scratch on a set of data, like Google’s Med-PaLM, an LLM to answer medical questions, and Bloomberg’s BloombergGPT, trained on 40 years of financial data to answer finance questions. Deciding what type of LLM to implement in a company is a matter of first figuring out the problem you need to solve, Paka says. “You have to find a use case where you have a pain point and where an LLM will give you value.”

For now, firms seem more comfortable using gen AI internally rather than in customer- facing roles where it could open them up to liability if something goes wrong.

The power of video

While many companies are already using gen AI to analyze and generate text, video applications are next. Sunny Nguyen, MBA 18, is lead product manager for multimodal AI at TwelveLabs, which recently launched Pegasus, a video-language foundation model that uses gen AI to understand video and turn its content into summary, highlights, or a customized output. “Video understanding is an extremely complex problem due to the multimodality aspect, and lots of companies still treat videos as a bunch of images and text,” Nguyen says. “Our proprietary multimodal AI is aimed at solving this challenge and powering many applications.” For example, sports leagues could use the technology to generate game highlights for fan engagement; online-learning publishers could generate chapters or highlights instantly; and police officers could get accurate, real-time reports of suspicious activity.

TwelveLabs is launching an interactive chat interface where users could ask questions in an ongoing dialogue about a video. “Just like ChatGPT but for video,” Nguyen says.

Norberto Guimaraes, MBA 09, cofounder and CEO of Talka AI, is focusing video analysis on business-to-business sales conversations, using gen AI to analyze not just verbal content but nonverbal cues as well. Guimaraes says nonverbal factors can account for up to 80% of the impact made in a conversation. Talka’s technology uses AI to analyze 80 different signals, including facial expressions, body language, and tone of voice to judge whether a conversation is achieving its purpose, usually of completing a sale.

Guimaraes says the technology could be used to train salespeople to communicate more effectively and discern clients’ needs. “We’ll be better able to understand what are the key frustrations from your customer, whether you’re taking into account what they’re saying, and whether or not the conversation is landing,” he says.

Computer programmers have begun implementing more formal techniques in a new field called AI fairness, which employs mathematical frameworks based on social sciences to de-bias embedded data.

Talka AI is currently testing the technology with a “very large” company that is “one of the best known for sales,” Guimaraes says. It currently has 70,000 conversations in its system and has been able to successfully predict whether a sale will occur 85% of the time.

Illustration of woman at a laptop shaking a hand coming out of the computer.Sales and service

Companies are also exploring the use of AI to take part in simple sales. Faculty member Holly Schroth, a distinguished teaching fellow who studies negotiations and influence, has consulted with the company Pactum, which has been working on an AI tool to manage low-level sales—repetitive negotiations that have just a few different issues such as length of contract, quantity, and price. In initial studies, Pactum has found that people prefer talking to AI versus a human. “People like talking with a bot because it’s kinder and friendlier,” says Schroth, “because it can be programmed that way.”

Specifically, AI bots can be programmed to use language that acknowledges what the other side is saying. “Humans sometimes get frustrated and may not be aware of the language they use that may be offensive,” says Schroth. “For example, ‘with all due respect’ is at the top of the rude list.” People may feel like they can get a better deal with AI, she says, since the bot will work to maximize value for both sides, while a human may not be able to calculate best value or may let emotions interfere.

AI is also perfectly positioned to be a coach, says Assistant Professor Park Sinchaisri. He’s explored ways AI can help people work more efficiently whether they are Uber drivers or physicians. In today’s hybrid environment, where workers are often remote without the benefit of on-the-job training or peer-to-peer learning, a bot can learn best practices from colleagues and identify useful advice to share with others. AI could also help human workers redistribute tasks when a team member leaves. However, Sinchaisri has found that while AI provides good suggestions, humans can struggle to adopt them. In his working paper on AI for human decision-making, workers accepted only 40% of machine-generated suggestions compared to 80% of advice from other humans, citing they did not believe the AI advice to be effective or understand how to incorporate it into their workflow.

Sinchaisri is studying ways to make coaching more effective—either by training the AI to give only as much advice as the person might accept or by allowing for human nature. “Research has shown that humans tend to take more advice if they can modify and deviate from it a little,” he says. “Good advice is often counterintuitive, meaning it is difficult for humans to figure it out on their own; AI needs to learn how to effectively deliver such advice to humans to reap its full potential.”

Illustration of a hand holding a pencil with a computer pointer icon at the tip.Bias and ethics

As powerful and versatile as AI can be, the warnings are real. Trained on the vastness of the internet, large language models pick up toxic content and racist and sexist language. Then there’s the real problem of hallucinations, in which AI output seems believable but includes false information.

Biases are baked into LLMs, says Merrick Osborne, a postdoc at Haas studying racial equity in business. In a new paper on bias and AI, Osborne explores how biased information results not only from the data a model is trained on but also from the engineers themselves, with their natural biases, and from the human annotators whom engineers employ to fine-tune and subjectively label data.

“You need to create a culture of accepting that generative AI is useful in many stages of work and encouraging people to be transparent with their co-workers about how they’re using it.”

—David Evan Harris

Certainly more diversity in the field of engineering would help. But it’s important, Osborne argues, that engineers and annotators undergo diversity training to make them more aware of their own biases, which in turn could help them train models that are more sensitive to equal representation among groups. Computer programmers have begun implementing more formal techniques in a new field called AI fairness, which employs mathematical frameworks based on social sciences to de-bias embedded data. “We aren’t born knowing how to create a fair machine-learning model,” Osborne says. “It’s knowledge we have to acquire.”

Another way Osborne suggests addressing both bias and hallucinations is to call in outside help. Vijay Karunamurthy, MBA 11, is doing just that as field CTO at Scale AI, a seven-year-old startup that’s worked to make models safer and fairer. “People understand that models come out of the box without any sensitivity or human values, so these base models are pretty dangerous,” he says. Scale AI employs teams of outside experts, including cognitive psychologists with backgrounds in health and safety, who can help decide what information would be too dangerous to include in an LLM—everything from teaching how to build a bomb to telling a minor how to illegally buy alcohol. The company also employs social psychologists, who can spot bias, and subject experts, such as PhDs in history and philosophy, to help correct hallucinations.

Of course, it’s not feasible to have hundreds of PhDs constantly correcting models, so the company uses the information to create what’s called a critique model, which can train the original model and make the whole system self-correcting.

For companies adopting AI, it’s important to develop internal processes to help guide ethical use by employees. One of those guidelines, says faculty member David Evan Harris, a chancellor’s public scholar, is disclosure. “People have a right to know when they’re seeing or interacting with generative AI content,” says Harris, who was formerly on the civic integrity, misinformation, and responsible AI teams at Meta. That goes for both internal use and external use with customers. “When you receive content from a human you probably have more reason to trust it than when it’s coming from AI because of the propensity of the current generation of AI to hallucinate.” That’s especially true, he says, when dealing with sensitive data, like financial or medical information.

Companies may also want to control how gen AI is used internally. For example, Harris says there have been numerous cases in Silicon Valley of managers using it to write peer reviews for regular performance evaluations. While a tempting shortcut, it could result in boilerplate verbiage or, worse, wrong information. Harris says it’s better to come up with new strictures for writing reviews, such as using bullet points. On the other hand, banning AI is unlikely to work. “You need to create a culture of accepting that generative AI is useful in many stages of work and encouraging people to be transparent with their co-workers about how they’re using it,” he says.

One practice to avoid when crafting internal policies around gen AI is to limit governance programs to the letter of the law—since it tends to lag behind ethics, says Ruby Zefo, BS 85, chief privacy officer at Uber. “The law should be the low bar—because you want to do what’s right,” says Zefo. “You have to create policies and programs and documentation that will put you on the right side of the laws you know are coming but aren’t yet here.”

For one, that means developing guidelines around personal or confidential data—both being sure to recognize and refrain from using other’s personal or proprietary information to train the model and to refrain from feeding such information into a model that is or might become public. When running algorithms on personal data for customers, she adds, it’s important to allow for human review. Companies should also control access to internal gen AI models to only those who have a legitimate purpose. More than anything, Zefo says, flexibility is key while the technology is still being developed. “You have to have a process where you’re always evaluating your guidelines, always looking to define what’s the highest risk.”

Illustration of a circuit board snake slithering toward a pair of feet.Planning for the future

That need to stay nimble extends to the workforce as well, says Heyne. In the past, AI was mostly used by technical workers programming models—but gen AI will be used by myriad employees, including creative, sales, and customer-service workers. As gen AI develops, their day-to-day work will likely change. For example, a sales agent interacting with a bot one day may be overseeing a bot negotiating with an AI counterpart the next. In other words, sales or procurement functions in an organization will remain but will look different. “We have to constantly think about the tasks we need to train for now to get the value that is the goal at the end,” Heyne says. “It’s a strategic imperative for any company that wants to stay in business.”

“The law should be the low bar—because you want to do what’s right. You have to create policies and programs and documentation that will put you on the right side of the laws you know are coming but aren’t yet here.”

—Ruby Zefo, BS 85

It’s also an education that needs to start much earlier in life, says Dimple Malkani, BS 98. She founded Glow Up Tech to prepare teenage girls for the tech industry by introducing them to successful female leaders in Silicon Valley. The skills necessary to succeed in a gen AI world aren’t necessarily those emphasized previously in tech, or even in previous iterations of AI, says Malkani, who spent decades working in marketing and business development. “The core skills these girls should be getting when they go to college aren’t just data science but strategy and creativity as well—to figure out what new product innovation we should create,” she says.

One thing she’s sure of as she talks with the next generation about gen AI is that, unlike current workers, they are ready to dive in. “Gen Z is very comfortable using gen AI,” she says. “In fact, they’ve already embraced it and expect it to be part of their working futures.”

Top of Her Game

Fall 2023|By Kim Girard| Photos by Brittany Hosea-Small

Ann Harrison honored as dean of the year by Poets & Quants

Dean Ann Harrison, a renowned economist lauded for keeping Haas’ six business programs ranked among the world’s best and significantly expanding the breadth and depth of the faculty, has been named Dean of the Year by Poets & Quants. Harrison is the 13th dean and the third woman to receive the honor from the publication, which covers business school education.

Poets & Quants Editor-in-Chief John Byrne announced the news to a global audience at a Thinkers50 virtual conference in October. Byrne engaged in a sweeping conversation with Harrison that covered the impact of globalization on workers, the responsibilities of government and business in fighting climate change, the critical role of diversity on campus, and the enduring importance of the MBA.

Demand for business education is growing, Harrison said, but the expectations of what students get from that education has also changed. “Students care about making a difference through business. They want more than just a great paycheck,” she said. “They really care about the world at large.”

In a Poets & Quants article, Byrne wrote that “Harrison has amassed an unimaginable and nearly breathtaking record of achievement” during her four-and-a-half years as dean. Harrison, who has led Haas since January 2019 and was reappointed to a second term last February, said she was “deeply humbled” by the honor.

“I am so lucky to be surrounded by a tremendous community at Haas—students, staff, faculty, and alumni who are always going beyond themselves,” she said. “It is only together that we can seek solutions to climate change, build a more inclusive society, and fuel innovation in all its forms.”

Big Changes

Since joining Haas from Wharton, Harrison has made significant changes, Byrne noted. She has led a major diversity, equity, inclusion, justice, and belonging (DEIJB) effort, broadening the profile of the Haas faculty, school board, and student body. The school’s entering full-time MBA class this year is 41% women, 47% U.S. minorities, and 13% U.S. underrepresented minorities. Harrison has also woven sustainability content deep into the curriculum while maintaining the school’s historical focus on entrepreneurship and innovation.

“The challenges of climate change permeate all aspects of business: supply chain, economics, management, and finance,” Harrison said. “In the latter field, we have pioneered new ways of investing. We need to hire in all these dimensions. It is a big agenda and we are making a lot of progress in a lot of different ways.”

Harrison also oversaw the launch of the first Flex online MBA cohort at any top business school. Applying learnings from the pandemic, Haas used new technology to make the MBA available to expanded groups of remote students and working parents requiring flexible schedules.

Under Harrison’s leadership, Haas raised a record total of $227 million, including $56.1 million during the last fiscal year. The school also secured the largest single gift in the school’s history—$30 million from alumnus Ned Spieker, BS 66, and his wife, Carol, BA 66 (political science)—to turn the undergraduate program into a four-year program.

Contact sheet of three images of Dean Ann Harrison, each with a different facial expression and gestures.

Figuring it out together

In the Poets & Quants article, Courtney Chandler, MBA 96, Haas’ chief strategy and operating officer and senior assistant dean, noted that Harrison “hasn’t stayed in one lane as dean.”

“She’s ambitious, and she sees the full potential of Haas within UC Berkeley and is driven to realize that potential,” Chandler said. “She has not been that one-dimensional dean and that is incredibly impressive.”

Harrison’s record as a highly cited scholar has also helped her work with the school’s faculty. Erika Walker, senior assistant dean for instruction, who has been at Haas for nearly 20 years, told Byrne that Harrison has succeeded in securing faculty support for her vision, which isn’t an easy task. “She relates so well to them,” Walker said. “Ann is very thoughtful about where we should be going. A lot of her success stems from her ability to get the buy-in and then enlist others to figure it out together.”

“I am so lucky to be surrounded by a tremendous community at Haas—students, staff, faculty, and alumni who are always going beyond themselves. It is only together that we can seek solutions to climate change, build a more inclusive society, and fuel innovation in all its forms.”

—Dean Ann Harrison

During her second term, beginning in January, Harrison said she’ll work with her team to build upon the school’s academic excellence and to continue enhancing the student experience. One important goal is to ensure that the school’s degree programs remain the best in the world, she said. In its 2023 b-school ranking, the Financial Times named Haas’ full-time MBA program #7 worldwide and among the top four U.S. programs, a record high. U.S. News & World Report ranked the evening & weekend MBA program #1 among part-time MBA programs and our undergraduate program #2. The Financial Engineer ranked Haas’ master of financial engineering program #1 in the world.

“This is a business school that embodies excellence,” Harrison said. “I feel great pride in our past and am thrilled to have the opportunity to create impact for the future.”

Remembering Those Lost

Fall 2023|By Staff

IN MEMORIAM

Philip Hawley, BS 46
William Beckman, BS 49
Glen Ryland, BS 49
Bruce McCauley, MS 49
Norman Fox, BS 50
Marilyn Jaeger, BS 51
Marvin Levin, BS 52
Hugh Maguire, BS 56
Kenneth Kopp, BS 57
Robert Bowles, BS 58
Harry Hathaway, BS 59
Eddie Nomura, BS 59
George Lefont, BS 60
Donald McKee, BS 61
Richard Scott, BS 63
Edward Pullen, MBA 65
Donna Stackhouse, BS 67
William “Bill” Milton Jr., MBA 77
James Walton, MBA 85
John Brent, BS 95
Luigi Uliana Rodrigues, MBA 18
Janice Logan, Friend
Charles Travers, Friend

Nick Sonnenberg, MFE 07
CEO and Founder, Leverage

Fall 2023|By Carol Ghiglieri| PHOTO: NICK ONKEN

Nick Sonnenberg, MFE 07.If you’ve ever felt overwhelmed with work, you’re not alone. Nick Sonnenberg heard the complaint so often that he wrote a book to solve the problem: Come Up for Air: How Teams Can Leverage Systems and Tools to Stop Drowning in Work.

It provides a framework for eliminating unnecessary tasks and focusing instead on work that drives results. Along with his operational efficiency platform, Leverage, Sonnenberg is reinventing the way people get things done.

Before he became an efficiency expert, Sonnenberg was barely staying afloat himself. He’d originally started a freelancer marketplace called Leverage that scaled very quickly. Then, his business partner walked out, jeopardizing the company’s future. Sonnenberg soldiered on, quickly noticing how much inefficiency there was, specifically in three areas: communication, planning, and resources.

“To have any chance of saving the company, I needed to get some time back,” he says. “Focusing on those buckets, things started turning around.”

Soon, people began contacting him for organizational advice. Eventually, he pivoted the company to become an efficiency training firm.

Sonnenberg says his success with Leverage wasn’t a case of getting lucky when his back was against the wall. He credits his MFE training and his years as a high-frequency trader, where he learned every second matters.

“Being a financial engineer, I’m programmed to find pattern recognition,” Sonnenberg says. “I started connecting the dots that there was this big opportunity to help a lot of people hopefully save millions of hours by teaching best practices of how to leverage all these amazing systems and tools, like Slack and Asana.”

comeupforair.com

Olaseni Bello, MBA 21
Associate General Counsel, Product, Intuit

Fall 2023|By Suzi Morales

Olaseni Bello, MBA 21.Anchored by his North Stars—impact and access—Olaseni Bello has always sought to serve a larger purpose through his work and to elevate those around him.

After Bello left the U.S. Army, where he’d earned a Bronze Star and served as a judge advocate general, he worked on a foreign exchange trading floor. But he longed for the sense of purpose he’d felt in the military. He’d seen other veterans use business school to springboard to the next stage, so he began applying, and Haas stood out. “There was a level of authenticity combined with humility from the people I was meeting,” he says.

While at Haas, Bello co-launched CarpeMed, an app that leveraged supervised machine learning to offer telehealth services to people in Africa. The idea was sparked by his grandmother, who struggled to access health care in Nigeria. Although he couldn’t raise the capital he needed, the process of pitching, developing, and launching CarpeMed in the App Store helped Bello assimilate the lessons of business school—and to be an impactful product counsel.

Now, as Intuit’s associate general counsel for product, Bello continues to look to his North Stars while partnering closely with product, engineering, business development, marketing, operations, and compliance managers on matters ranging from generative AI product features to data privacy to regulatory and cross-border issues.

Bello credits his mother for shaping his philosophies. “I’ve had to pivot; I’ve had to reinvent myself. I know how to survive because I’ve seen my mom persevere.”

linkedin.com/in/olaseni-a-bello-jr-esq

Jackson Block, BS 17
CEO and Co-founder, LGBT+ VC

Fall 2023|By Carol Ghiglieri| PHOTO: BRIS PHOTOGRAPHY LLC

Jackson Block, BS 17.Soon after the 2022 Club Q massacre in Colorado Springs, Colorado, Jackson Block took action to advance LGBTQ+ investment and support.

He joined forces with Tiana Tukes, both of whom are members of the LGBTQ+ and venture capital communities, and launched LGBT+ VC, a nonprofit providing opportunities to underrepresented communities in venture capital. It’s work that’s greatly needed, Block says.

“In this past year alone, there have been 650 anti-LGBTQ bills in 46 states, yet there’s been nothing said from the VC community.”

Block notes that while a large percentage of the country’s GDP comes from venture-backed businesses, less than 1% of VC funding goes to LGBTQ+ founders. “Our goal is to make more investors,” he says. “We’re not going to break the patterns until we focus on the supply side of the issue.” To do that, LGBT+ VC is providing access to networks, information, and capital and helping LGBTQ individuals become angels, investors, scouts, and limited partners.

Block says his Berkeley and Haas connections have helped him launch his business. He’s a board member of the Haas Alumni Network’s NYC Chapter and says the group has been consistently supportive. Last June, LGBT+ VC held its inaugural summit in New York, convening more than 500 VC and tech leaders to discuss the future of finance. It was one giant step toward reimagining business that benefits the global LGBTQ+ community.

linkedin.com/in/jjblock

Amy Finney, MBA 20
COO, Bicycle Health

Fall 2023|By Meilan Carter-Gilkey| PHOTO: ANTHONY BACA

Amy Finney, MBA 20.During her 12-year career at One Medical, Amy Finney held many leadership positions. But her most consequential role came in February 2020, when she led One Medical’s emergency response to the COVID-19 pandemic.

“Those first few weeks in February and early March, a small group of us worked around the clock researching and scripting guidelines for our clinical and administrative staff,” says Finney. “We were on call 24 hours.”

Finney and her incident response team created up-to-date clinical logistics and COVID-19 testing protocols to meet the needs and specific guidelines for One Medical’s 200+ clinics nationwide.

Finney was later promoted to vice president of operations and named one of San Francisco Business Times’ 2022 Women of Influence for her work—though leading a national emergency response was a departure from her original career goals.

Inspired by her sister’s complex health journey, Finney had planned to attend medical school. But with every new opportunity, her work at One Medical became more meaningful. In 2017, Finney enrolled in Haas’ evening and weekend program, which ultimately put her on the fast track to lead One Medical’s operations. Finney has since moved on and is now COO of Bicycle Health, a telehealth company that provides online treatment to people for opioid use disorder.

“I’m very grateful that I had Haas to help me expand my perspective and confidence,” says Finney. “I hope that other women in their careers can make the same steps that I feel I’ve been able to make.”

linkedin.com/in/amy-finney

Priya Saiprasad, BS 10
Co-Founder and General Partner, Touring Capital

Fall 2023|By Suzi Morales

Priya Saiprasad, BS 10.Priya Saiprasad often doesn’t look like other venture capitalists in Silicon Valley boardrooms. But she does look like the consumers of many products under consideration for funding—a perspective that adds value to the discussions happening.

“I bring to the table diverse perspectives that represent Millennials, women, entreprenuership, and a global-mindset that others might not have thought of,” says Saiprasad, who lived in 12 countries as a child.

As co-founder and general partner of Touring Capital, a new venture firm focused on AI software, Saiprasad aims to break the mold of venture funds. “I have many thoughts on how to solve for the systemic biases that exist in venture, how to create a firm that’s founder-first, and how to leverage advancements in AI for the next generation of software productivity.”

A veteran in AI software investment, Saiprasad was primed for her new role. Her experiences at Microsoft’s venture fund M12, Mayfield Fund, and SoftBank Investment Advisers provided insights on creating a cutting-edge yet enduring fund, she says. So when longtime mentor Nagraj Kashyap, an M12 alumnus, approached her about founding a firm with an AI focus, she jumped at the chance.

“Advancements in AI have been happening over the last decade and now they’re finally at a precipice of reaching massive scale and adoption,” she says.

As digital natives, Millennials like Saiprasad are leading the expectations for what AI and other emerging technologies should do. So while she might not look like many in the boardroom today, she certainly looks like the future.

linkedin.com/in/priyasaiprasad

Urgent Care

Fall 2023|By Emily Pelissier

Prize stresses immediate climate action

Image of campus and the Campanile with the Bay in the distance.To spur the global market to act faster to address the climate change crisis, Haas has launched the Sustainable Business Research Prize.

The $20,000 prize, administered by the Center for Responsible Business (CRB), seeks to recognize the most significant research papers that hold the greatest potential to catalyze immediate change in business management practices related to responsible business, sustainability, and ESG (environmental, social, and governance) issues.

Additionally, the prize will motivate thought leadership globally and add to the body of knowledge and intellectual capital in the role of business in society.

Support for the prize comes from Allan Spivack, MBA 79, the former president & CEO of RGI Home. Spivack has long been at the vanguard of sustainable business and serves on the CRB’s senior advisory board.

“My intention in creating the Sustainable Business Research Prize is to provide a platform in which the urgent conversations around climate change and industry can meet the moment,” Spivack says.

Prize winners will be selected by Dean Ann Harrison and a panel of Haas faculty members. For Harrison, business—and business schools—are crucial to leading a transition to a sustainable world.

“It is business that is mobilizing the vast amount of capital and innovation needed to create successful environmental solutions at scale,” she says.

Trading Up

Fall 2023|By Dylan Walsh| ILLUSTRATION: ISTOCK

Absent fees, retail traders do better

Illustration of woman breaking through a cinder block wall to reach a large dollar sign.The advent of no-fee trading on platforms such as Robinhood has helped fuel an explosion in retail investing—and raised concerns that novices would be tempted to trade too often and lose more money.

But new research co-authored by Assistant Professor Omri Even-Tov shows this fear may be exaggerated: While average investors trade more when fees are removed, they also earn more.

“We show that portfolios don’t underperform just because of greater activity,” Even-Tov says. “In fact, net performance improves by about 11% annually, and this improvement is driven by savings from the removal of fees rather than changes in the returns of trades.”

In a new working paper, co-authored by doctoral student Kimberlyn Munevar, PhD 24, and professors from the University of Pennsylvania and MIT, the researchers analyzed a natural experiment by international trading platform eToro, which dropped fees on certain trades in different countries at different times over the past several years.

The staggered removal of trading fees allowed the researchers to compare investors’ behavior before and after fees were gone. Even-Tov and his co-authors looked at these patterns for over 40,000 investors between 2018 and 2019. They found that the removal of fees increased trading frequency by an average of about 30%. Having no fees also drew people to the eToro platform: New users grew by 172% in countries without fees and only 18% in countries where fees remained in place. The removal of fees also led people to hold significantly more diverse portfolios.

Though this study investigated non-U.S. markets, the researchers ran an analysis to demonstrate that the kind of retail trading conducted by their subjects corresponds with trading on American platforms.

These results come at a time when the U.S. Securities and Exchange Commission is considering whether to regulate one of the main ways that retail brokerage firms make revenue outside of commission, a process called payment for order flow. “Now regulators are looking at whether or not these new methods need to be reined in,” says Even-Tov. But regulatory bodies should be wary of pushing online trading platforms back toward a commission model when putting new policies in place, he says.

Crisis Management

Fall 2023|By Mickey Butts| PHOTO: NOAH BERGER

Mastering upheaval and systemic transformations

Olaf Groth lecturing to a class.Olaf Groth doesn’t like to make predictions, but he’s nonetheless become adept at helping executives see around corners and navigate the chaos of recent years.

The Great Remobilization book cover.A member of Haas’ professional faculty and a senior adviser at the Institute for Business Innovation, Groth is also chairman and CEO of think tank Cambrian Futures. In a new book, The Great Remobilization: Strategies and Designs for a Smarter World (MIT Press, 2023), he and co-authors Mark Esposito and Terence Tse focus on what they call the Five Cs—COVID; the cognitive economy, crypto, and web3; cybersecurity; climate change; and China—and show leaders how to power human and economic growth by replacing fragile global systems with smarter, more resilient ones.

Berkeley Haas talked with Groth about how executives can turn turmoil into opportunity.

BH: What will the next era of globalization look like?

The globalization everyone keeps talking about is how many bananas get shipped from Argentina to China. And of course that’s important for jobs today. But what we really have to ask is, who controls the flow of any given thing from one place to another? At the end of the day, the people who have the power in what we call the “cognitive economy” can influence these flows. There are traditional flows—of capital, of intellectual property, of people, of goods and services. But then there are also flows of data and genetic material. And that’s not even including the ecological flows of air and energy.

At the end of the day, the people who have the power in what we call the “cognitive economy” can influence these flows.

How do you define the cognitive economy?

In the cognitive economy, cybernetics—essentially smart, digital, command-and-control functions that are currently steered by the Googles and Amazons of this world—is getting injected into everything we do. Take the mobility industry. Electrified, autonomous cars use AI to create applications inside the car, and cars are now tied to a new charging infrastructure around the smart home. You need to design cars like an iPhone: Start with a chip and build everything around that. Our global logistics and supply chains, the movement and tracking of people, carbon, etc. is starting to get that injection of intelligence too.

Your book describes a FLP-IT (forces, logic, phenomena, impact, and triage) model for strategic leadership. How should executives approach the triage step, which requires them to decide what to keep, discard, or build from scratch?

I was at the World Economic Forum meeting in Tianjin and a senior executive in the petrochemicals industry told me that after 30 years of building megafactories in China, his company now needed to throw that out the window and create chains of “nanofactories” across 12 different markets. To solve that challenge, you need to see the new operating logic of your domain then decide which existing assets, positions, and capabilities to draw upon and which to divest.

Keeping Company

Fall 2023|By Nathan Allen| Photo: Gahsoon for iStock/Getty Images

Know your gig workers to retain them

An Uber driver wearing a face mask and hat.When done right, the gig economy can mutually benefit companies and workers. Companies can tap into deep and vast labor pools, and workers can create their own schedules. But such flexibility challenges gig platforms in committing to a service capacity. What incentives, then, can entice workers to work more hours more often?

A recent study co-authored by Assistant Professor Park Sinchaisri and published in Manufacturing & Service Operations Management sought to answer that question.

The researchers utilized data from a U.S.-based ride-hailing company that included 358 days of driving activities and financial incentives for thousands of New York City drivers between 2016 and 2017. Perhaps not surprisingly, they found that drivers work toward their income goals and are less likely to work after meeting them.

More surprisingly, Sinchaisri found that workers who have previously worked longer shifts are more likely to start a new shift or work longer than drivers who have worked less. This finding goes against previous research on taxi drivers, who have more of a “time-targeting behavior.”

Sinchaisri says that gig platforms should ask what specific goals workers have and make targeted adjustments. “Once you know your workers’ goals, you can think of better ways to incentivize them,” he says.

There’s No Place Like Work

Fall 2023|By Laura Counts| ILLUSTRATION: ALEX NABAUM

How place identity enhances engagement

Illustration of man sitting at work desk with sunlight being painted upon him.Post-pandemic workspaces have become increasingly fluid, and companies are trying out hot desks and hoteling spaces as they struggle to entice workers back to the office. But new research suggests that leaders wanting to build employee engagement should think less about rearranging the furniture and more about how employees relate the office space to their own work.

“When people feel a sense of self-esteem and distinctiveness derived from their workspace, we found it enhances their engagement,” says professional faculty member Brandi Pearce. “It also increases collaboration and their commitment to the organization.”

Pearce and colleagues from Stanford and Pepperdine universities studied “place identity,” as they refer to this sense of connection, at a software company transitioning workers at sites worldwide from traditional offices to open-plan innovation centers.

The research, published in Organizational Dynamics, found that whether people accepted or rejected the innovation centers didn’t align with their work functions or professional backgrounds, nor with age, gender, location, or other factors. “What seemed to matter more than the space itself was how people felt the space connected to them personally, positively differentiated them, and reflected a sense of belonging to something meaningful to them,” Pearce says.

“When people feel a sense of self-esteem and distinctiveness derived from their workspace…it enhances their engagement.”

What’s more, workers with a distinctive sense of place identity collaborated more actively with one another and were more engaged and committed to the organization.

So how can leaders cultivate place identity? Whether the setting is physical, hybrid, or virtual, Pearce suggests three best practices:

Broadcast the vision.

No matter the setup, leaders should clearly communicate the purpose of the space and what kinds of work are best done in the various workplaces: brainstorming sessions, workshops, and other collaborative tasks in work offices, for example, and focused time in home offices. To help define virtual workspaces, leaders can state whether video conferences are meant for efficiency or connection.

Model Enthusiasm.

Equally critical to visioning is the way leaders convey a positive attitude about space. In a hybrid setting, leaders can express enthusiasm by holding in-person meetings on in-office days and visibly blocking calendar time during remote-work days for solitary work.

Empower employees.

The researchers found place identity was highest when employees were encouraged to tailor their spaces to suit their needs and preferences. In one location, for example, employees were given resources to co-create furniture and other artifacts, enhancing their personal connection to the office. Remote workers could be given materials to customize their home spaces to create a connection to their team or organization, or—if they do visit the office—to create something with co-workers to bring home.

Home Maker

Fall 2023|By Dylan Walsh| PHOTOS: ISTOCK

How inflation boosts homeownership
image of a polaroid photo of a mother and son inside a home.

Between high inflation, rising interest rates, and general economic uncertainty, it may not feel like the right time to plunge into the housing market. But if past patterns hold true, people who are living through this time may be more inclined to buy a house in the future.

New research co-authored by Professor Ulrike Malmendier and published in the Journal of Finance has shown that people who experience periods of high inflation in their lifetimes are significantly more likely to own a home. This even holds true when people from high-inflation countries immigrate to the U.S.

“People who have lived through a lot of inflation like to hedge themselves by putting money into a real asset,” says Malmendier, who coauthored the paper with Alex Steiny Wellsjo, BA 10 (economics, cognitive science), PhD 20 (economics), of UC San Diego’s Rady School of Management. “If this has been your experience and you’re choosing whether to rent or buy a home, you might opt to buy.”

Building on Malmendier’s prior work demonstrating the long-lasting effect of economic shocks on people’s attitudes and behaviors, the paper is the first to show that personal experience with inflation can drive homeownership both within and across different countries.

The researchers found that European countries with more historical inflation had higher rates of homeownership than those with more stable financial histories. Likewise, within a given country, people who had experienced greater inflation over their lifetimes were more likely to own a home than those who had experienced less.

Numerically, increasing a typical household’s experience with inflation of 2% to inflation of 5.4% increased their likelihood of homeownership from 65% to 75%.

The researchers also collected information on 1.4 million households that had immigrated to the U.S. from a range of high- and low-income countries. Controlling as much as possible for things like relative income and wealth, they again found that past experiences with inflation were tightly coupled with levels of home ownership. Experience with inflation even overshadowed housing market prices when predicting people’s decisions.

Image of a construction site of new homes being built.

“When people come [to the U.S.] from a country with high inflation, it seems that experience really scars them,” Malmendier says. “Even when they’re in a completely different place with different monetary policies, they carry this worry that their money will lose value unless they put it into something like real estate.”

What drives these results is an open question, but Malmendier suspects it might be related to “availability bias,” the psychological phenomenon in which our brains jump to the knowledge or experiences that are most salient to the issue on hand. If people face the choice of locking the value of their money into a tangible asset, they may be swayed by calling to mind a memory of currency values fluctuating wildly.

“If I live through a financial crash, my brain has been reprogrammed, it has been scarred; different neural synapses have formed and been activated,” Malmendier says. “This person you’re talking about is now a different person. The policymaking realm does not put enough thought into this.”

Nonstop Futility

Fall 2023|By Dylan Walsh| Illustration: BRIAN STAUFFER

Searching for a cheaper flight? There’s no secret trick.

Image of a plane crossing the sky with multicolored trails of other planes.Buy on a Tuesday. Search in your browser’s incognito mode. Use a VPN to pretend you live in Suriname.

“There are so many hacks out there for finding cheaper airline tickets,” says Assistant Professor Olivia Natan. “But our data shows many of these beliefs are wrong.”

Natan and colleagues from the University of Chicago, Yale, and the University of Texas at Austin looked deeply into how prices are set at a major U.S. airline. The system she found, which is representative of airlines worldwide, was strikingly at odds with what many economists would expect—and most consumers assume.

Substituting convenience for price

When people search websites like Google Flights or Kayak, a range of different flights from the same airline appear. Travelers tend to balance convenience and cost: The price of one flight might push people to select a slightly less convenient but cheaper flight.

“But airlines don’t consider this kind of substitution,” Natan says. They set the prices of seats on each individual flight on a given route separately, “even though changing the price on one flight will affect the way people think about all their options.”

A small menu of preset prices

Perhaps most surprisingly, airlines also don’t incorporate the prices of their competitors into their automated price-setting. This behavior, Natan explains, is the result of a specific pricing heuristic—or decision-making shortcut—that airlines use called Expected Marginal Seat Revenue-b. The use of this, the researchers show, results in another outcome that consumers may not expect.

Despite how it may appear when searching flights, airlines have a fixed and relatively small number of prices that they assign to tickets on each flight. Unlike other consumer sectors, where pricing can be adjusted down to the penny, airlines operate with large gaps between each possible price—sometimes upwards of $100. They may sell the first 30 economy tickets at the lowest price, then the next 30 tickets at the next possible price, and so on.

“Airline tickets are sold through global distribution systems that make sure a travel agent in Wichita or Miami sees the same price you do on your computer,” Natan says. This system emerged from an industry alliance to facilitate inventory management. Other travel products, like hotel rooms, cruises, and car rentals, do the same. The downside is that airlines are relatively unresponsive to real-time changes in cost, as the next discrete fare is often a significant jump up.

Despite how it may appear when searching flights, airlines have a fixed and relatively small number of prices that they assign to tickets on each flight.

Lack of coordination across departments

One of the strangest discoveries from the research relates to the process airlines use to set their prices. To an economist, Natan explains, there is never a reason that firms would not raise prices if the increase assures an increase in revenue. But the set of possible prices chosen by the pricing team nearly always includes an option that is too low.

“We found they could make more money today by selling fewer tickets at higher prices and not foreclose future opportunities,” she says. “In practice, they choose the menu of prices without using their internal demand predictions.”

Interestingly, the revenue management team corrects much of this underpricing. Before tickets go on sale, this team makes demand forecasts that determine final prices. These forecasts are routinely inflated, reducing the number of underpriced tickets shown to consumers by roughly 60%.

“We find that these prices are a consequence of teams from different departments choosing the best pricing inputs when they are unable to coordinate,” Natan says. Or, airlines might not maximize short-term revenue to build customer loyalty or avoid regulatory scrutiny, she speculates.

Over the next several years, Natan says, airlines may start to adopt more dynamic pricing platforms, and non-business travelers may benefit from these changes. But for now, the hunt for a trick to find lower fares is largely futile. “What I can say is that prices do go up significantly 21, 14, and 7 days before a flight,” Natan says. “Just buy your ticket before then.”

Assoc. Professor Andrew Shogan

Summer 2023|By Staff

Operations research expert

Headshot of the late Associate Professor Andrew W. Shogan.Associate Professor Andrew W. Shogan, 74, an expert in operations research, died on May 30 in Orinda, Calif. Shogan joined Berkeley Haas in 1974 and spent his entire professional career at the school until his retirement in 2007. He was beloved by faculty and staff alike. His passion for teaching and advancing the use of mathematical models to formulate and solve problems arising in business, industry, and government earned him several teaching awards, including the Earl F. Cheit Award for Excellence in Teaching—the highest honor given to faculty by students.

In addition to teaching, Shogan served as associate dean for instruction for 16 years from 1991 to 2007, where he oversaw the growth of all six degree programs and introduced innovations to the MBA program, including the creation of a shared virtual classroom with MBA students from Haas, Darden, and Michigan Ross. In recognition for his contributions to Haas, Shogan earned the Chancellor’s Distinguished Service Award in 2007.

Donations in his memory may be made to the Haas School of Business Undergraduate Program. Visit our giving site and note “in honor of Andrew Shogan.” Read his full obituary.

IN MEMORIAM

Herbert Ems, BS 47
Terry Haws, BS 49
Robert Hake, BS 50
Robert Elder, BS 51
Frank Corona, BS 53
Edward De Matei, BS 56
Beryl Robinson, BS 57
Richard Emerson, BS 59
Will Gassett, BS 60
Robert Buchman, BS 61
Robert Hermanson, BS 63, MBA 65
Barbara Tosse, BS 65
John McCue, MBA 69
Robert Hickey, MBA 77
J.P. Sheehan, MBA 78
Julie Leuvrey, MBA 88
Stockton Rush III, MBA 89
Leonora A. Burke, PhD 90
Susan Kobayashi, MBA 92
Candace Bennyi, BS 94
Beidi Zheng, MBA 08
Daniel Potter, MBA 19
Victor Garlin, Faculty
June A. Cheit, Friend

Michelle Florendo, MBA 10
Founder and Principal, Powered by Decisions LLC

Summer 2023|By Gail Allyn Short| PHOTO: MICHELLE LUO

Headshot of Michelle Florendo, MBA 10.Michelle Florendo has made a career out of teaching people how to make better, faster decisions and to lead with confidence.

“Most people have never been taught a specific process for decision-making, and yet it’s something that we’re expected to do innumerable times a day,” she says.

The self-described “decision engineer” is the founder and principal of Powered by Decisions, a leadership coaching and training firm. Florendo has coached executives at some of the most influential companies, including Microsoft, Google, and Amazon.

Recently, she taught an MBA workshop at Haas focused on addressing emotions associated with making decisions. “Instead of ignoring the emotions, I teach students how to observe and decipher their feelings and how to either manage those emotions or integrate that data into a structured decision process,” she says.

While business schools teach students frameworks for financial decision-making, people don’t usually get instruction for issues not involving the bottom line, she adds.

Another passion of Florendo’s is working with the Berkeley Executive Coaching Institute where she supports professionals in developing coaching skills.

“It felt like coming full circle because the co-founder of the Institute, Lecturer Mark Rittenberg, introduced me to coaching while I was a student at Haas,” Florendo says. “He helped me understand how much I loved it and how good I’d be at it.”

linkedin.com/in/michelleflorendo