Imagined otherness: Why we dehumanize our political opponents

When we believe that members of another group have beliefs about the world that are at odds with what most others believe, we consider them less human.

Democratic donkey emblem and Republican elephant with their backs turned toward each other on an American flag are seen in this multiple exposure illustration photo.
Photo by Jakub Porzycki/NurPhoto via AP

Some of human history’s greatest atrocities—genocide, slavery, ethnic cleanings—are rooted in our ability to dehumanize people from other social, political, or cultural groups.

Whereas prior research has traced dehumanization to the belief that others think or feel less than we do, new research co-authored by Haas professor Sameer Srivastava shows that our tendency to dehumanize can also be influenced by how we think others view important facets of the world. The greater the difference between our perceptions of an outgroup’s worldview and those of a “typical” person, the more we tend to dehumanize them.

“The act of dehumanization appears to be at least in part driven by what we refer to as ‘imagined otherness’: the belief that an outgroup perceives of something that one cares deeply about differently than one assumes most other people do,” Srivastava says.

Measuring the space between us

With Austin van Loon from Duke University and Amir Goldberg from Stanford University, Srivastava used the sociological concept of “schemas” to explore this effect. Broadly speaking, schemas refer to the ways in which people categorize the world, as well as the associations that they have between these categories. For example, a conservative in the U.S. might associate freedom with economic independence and lack of government intervention, while a liberal might associate it with civil liberties and the freedom of expression.

In the first of two pre-registered experiments, the researchers recruited self-identified Republicans and Democrats in the U.S. to report on their schemas related to the concept of “America.” Participants chose four words—from a set of eight—that they thought best defined America. Two of these sets contained positive words (e.g. strong, innovative), two contained neutral words (e.g. constitution, western), and two contained negative words (e.g. dangerous, unequal). After articulating their own associations, participants were instructed to characterize the associations that they thought would be made by a prototypical member of their own political party, a typical member of the opposing party, and a typical person.

The researchers then asked participants to report on the extent to which they blatantly dehumanized members of the opposing party. In the first experiment, the researchers found that self-identified members of one party were more likely to blatantly dehumanize members of the opposing party when they thought that group’s worldview about America was very different from what they ascribed to a typical person.

“Of course, the causal arrow could go also go in the opposite direction: The more one dehumanizes an outgroup, the more one might perceive that outgroup as holding views that diverge from a typical human’s,” Srivastava said.  To get a clearer understanding of causality, the researchers ran a second experimental study.

In this experiment, Republicans and Democrats were randomly shown one of two sets of fabricated results. One set showed that people in the opposing political party viewed America similarly to the “typical” person. The other showed opposing political party members holding very different schemas from those of the “typical” person. The researchers found that dehumanization was significantly stronger in the latter condition, thereby corroborating results from the first experiment. (Participants were informed about the deception in the experimental design at the end of the study.)

Toward a more humane politics

Srivastava notes that a wealth of research in the past decade has looked at what is called “affective polarization”, or how warmly or coldly we view our political opponents. But this new research gets at something different: “When people view the other side as less than human, we should worry about such negative consequences as political violence,” he says. “If we can start to understand where this perception comes from, it gives us one more lever to combat it.”

He described two potential approaches to reducing how much we dehumanize members of the opposite political party. The first is a simple intervention to correct misperceptions that Republicans and Democrats might have about how the schemas of the other group deviate from those that are typically held. There may be differences, of course, but they may not be as large as people believe them to be.

The second idea would be to use the schemas that partisans hold to craft messaging that both resonates with their worldview and helps them humanize the other side. “The method we developed surfaces the terms that are most strongly associated with the tendency to dehumanize or, conversely, humanize the outgroup,” Srivastava says. “This raises the possibility of strategically avoiding—or proactively using—such terms in messaging that aims to tamp down the dangerous tendency to dehumanize people from the other political party.”

Read the paper:

Imagined otherness fuels blatant dehumanization of outgroups
By Austin van Loo, Amir Goldberg, and Sameer Srivastava
Communications Psychology
May 6, 2024

Berkeley Haas dean to step down, remain on faculty 

Ann Harrison will step down as the dean of the Haas School of Business on July 31, 2024, remaining a half-time faculty member. The decision will allow her to spend more time with her New York-based family and focus on her research, she said. 

“It has been an incredible honor and joy for me to serve as dean of Haas,” Harrison said in a note to the Haas community sent this morning. “I am proud of what we have accomplished together.”

Harrison has served as dean of Berkeley Haas since January 2019, the second woman to lead the school. Her deep ties to UC Berkeley—where she earned her bachelor’s in economics and history and served as a professor in the College of Agricultural and Resource Economics for 10 years—have allowed her to make far-reaching changes in a short time, said Ben Hermalin, Executive Vice Chancellor and Provost for UC Berkeley, who announced the news today.

“We thank Dean Harrison for her incredible leadership and numerous accomplishments during her term as the dean,” Hermalin said. “For anyone who has had the pleasure of working with her, Ann is wonderful to partner with. She is full of innovative ideas that go beyond Haas; hence, not only has she made Haas better, but she’s also made the campus better. Her leadership will be sorely missed.”

A sustainability mindset

Harrison said becoming a half-time ladder faculty member will allow her to spend meaningful time with her husband and two daughters, who live in New York, while staying connected to Haas and continuing her research. 

“I will be able to remain at the school I have been truly passionate about since I first set foot here as a freshman at Berkeley in 1977,” said Harrison, a renowned economist who is one of the most highly cited scholars on foreign investment and multinational firms. “I am especially excited to have more time to focus on my research into the gender pay gap and what makes industrial policy work.”

Harrison’s top priority at Haas was to embed a sustainability mindset in all of the school’s programs and operations. This resulted in the creation of a sustainability certificate and a dual master’s degree program in business and climate solutions with the Rausser College of Natural Resources, as well as a summer minor in sustainable business and policy. 

Courtney Chandler, Senior Vice Dean of Haas, said Harrison’s accomplishments have had school-wide impact—from growing the faculty, to fundraising, to growing degree programs, to infusing innovation, sustainability, and inclusion into business education. 

“She believes in Haas’ potential and strives to further strengthen the school’s reputation by setting an ambitious vision for Berkeley Haas,” Chandler said.

During her tenure, Harrison appointed the school’s first-ever chief diversity, equity, and inclusion officer and the first chief sustainability officer. She orchestrated a major diversity, equity, inclusion, justice, and belonging (DEIJB) effort that broadened the profile of the school’s faculty, board, and student body, and created learning opportunities and anti-bias training for the entire Haas community. 

“Grateful for her leadership”

Professor Jennifer Chatman, Associate Dean of Academic Affairs, said Harrison’s leadership over the past five years created cultural changes at Haas that have made the school “more diverse, more harmonious, and more collaborative than ever.” “Dean Harrison’s leadership style has set us up for an immensely bright future, and I am deeply grateful for her leadership,” she said.

people standing in the courtyard during the 125th event
(L-R) Ben Hermalin, Executive Vice Chancellor and Provost for UC Berkeley; UC Berkeley Chancellor-Elect Rich Lyons; Prof. Jennifer Chatman,  Associate Dean of Academic Affairs, Dean Ann Harrison; Prof. Don Moore and Erika Walker, Senior Assistant Dean for Instruction, attending the Berkeley Haas 125h Anniversary Celebration in the Haas courtyard. Photo: Jim Block

Harrison’s focus on innovation and entrepreneurship resulted in a new faculty group and an entrepreneurship hub—slated to open this fall.  Harrison envisions the hub as a central clearing house for students who wish to learn about all entrepreneurship activities across the Berkeley campus. The hub now has a faculty director, as well as an executive director.

In addition, Harrison expanded the school’s degree offerings with the Flex hybrid MBA cohort and worked closely with the Berkeley School of Public Health, the School of Engineering, Biological Sciences, and the School of Law to bolster their joint programs. 

Harrison, a chaired professor at the University of Pennsylvania’s Wharton School before joining Haas, hired 40 new tenure-track faculty during her five-year tenure, 19 of whom are women. She also nearly doubled the number of faculty positions that are funded by Haas or by philanthropic funds. 

Stepped up fundraising

Under Harrison’s leadership, Haas has also significantly stepped up fundraising and raised $236 million since 2019. This includes the largest single gift in the school’s history—$30 million from alumnus Ned Spieker, BS 66, and his wife, Carol, BS 66 to turn the upper-division undergraduate business program into a four-year program.

When naming her “Dean of the Year” in 2023, the publication Poets & Quants called Harrison’s tenure an “unimaginable and nearly breathtaking record of achievement.”

Harrison said she looks forward to the opportunity to teach in the new four-year Spieker Undergraduate Program

“What really motivates me both as a leader and soon-to-be faculty member are the transformational opportunities we provide for our students, staff, faculty, and alumni,” she said. “We provide opportunity for everyone, at a scale that is unequaled among the private schools. What a powerful mission.”

Hermalin will announce details about the appointment of an interim dean shortly. Hermalin said the goal is to begin the search for a permanent dean in early fall 2024, conduct interviews in late fall and/or early spring, and announce the new dean in spring 2025, aiming for a July 1, 2025 start date. The interim dean will likely serve through June 30, 2025, while a national search is underway.

Solène Delecourt selected as ‘Best 40 Under 40 MBA Professor’ by Poets&Quants

A smiling woman with short blond wears a yellow blazer and stands with arms crossed. A badge reads: Poets&Quants Best 40 Under 40 Professors
Assistant Professor Solène Delecourt

Assistant Professor Solène Delecourt, who teaches negotiations to MBA students and studies business inequality, has been named as one of Poets&Quants’ “Best 40 Under 40 MBA Professors” for 2024.

Delecourt was selected from among 1,000 nominations from students, administrators, and faculty members at business schools around the world. The announcement comes just after she was honored with a Cheit Award for Teaching Excellence—the highest teaching honor at Haas—by students in the full-time MBA program. 

“This has been a terrific year for me. I am thrilled to be chosen as one of the 40 under 40 MBA professors,” Delecourt says. “I want to thank my students wholeheartedly for their nominations.” 

Just four years into her academic career, Delecourt is described by her students as a professor who changed their outlook on negotiations for life—a critical skill in our polarized times.

Solène’s strongest message throughout my negotiations course was to create a win/win outcome, and assume we are all on the same side,” said Namit Singal, MBA 24, in his nomination. “I absolutely loved this learning and will take it away for life.” 

Alex Berry, MBA 24, said he was going to switch out of Delecourt’s 8 am class section until he met her. “She brought an energy, vulnerability, and practicality to her classes that should be a model for every MBA professor.” 

Besides her expertise and creative teaching methods, students also praised her sense of humor, positivity, and “infectious energy.” She earned a perfect score on her teaching evaluations—7 out of 7—last fall.

‘In love’ with teaching

In describing her path to becoming a business school professor, Delecourt says she accidentally “fell under the spell of this career path” after starting her PhD at Stanford, and “I am in love with it.” Her goal is for her students to learn while having fun.

“If they don’t have fun, I don’t think they’re going to remember much. At the same time, they need to learn because this is a class, it’s not a party,” she says. “And so for that, I design all of my classes to be packed with action.”

Some of those class activities include an improv-inspired negotiations tournament, and an open mic session where students share stories of a prior experience where negotiation skills could have helped them. She has a curated playlist—Beyoncé is a favorite—with lyrics that reinforce key learnings. 

Delecourt also draws from her research passion to make students aware of power inequities, particularly for women and people of color. Her academic work has been gaining increasing recognition: A co-authored paper published in the journal Nature this year showed that googling for images rather than text amplifies gender biases. It received widespread media attention and won the Best Paper Prize at the 2022 International Conference on Computational Social Science, and was a semi-finalist at the 2021 Wharton People Analytics Competition.

Most of her research is at the intersection of entrepreneurship and gender. She recently ran a field experiment to test whether access to generative AI can boost success for small business owners in Kenya—and found it only helps people who were already high-performers. The paper won the 2024 white paper competition at the Wharton People Analytics Conference. Delecourt’s work has received funding from various sources, including a $250,000 grant from the Alfred P. Sloan Foundation this year. She currently serves as an editorial board member of the journal Organization Science

12th year of “Best 40 Under 40”

This is the 12th year that Poets & Quants has published the “Best 40 Under 40” list with the goal of “identifying and celebrating the most talented young professors currently teaching in MBA programs around the world.” The publication’s staff evaluated each nominee on teaching (weighted 70%) and research (weighted 30%). 

Read the full article for more details.

Our political debates may not be as antagonistic as we think, study shows

image shows a phone screen with speech bubbles filled with *$((*&@($ representing obscenities
Image: AdobeStock

Spend any time scrolling through social media or news sites and it feels like America is a nation in constant argument. Off-hand remarks often spark fierce screaming matches. Partisanship is up, Gallup tells us, while trust in institutions is down.

However, a new study co-authored by Berkeley Haas Assistant Professor Erica R. Bailey suggests this perception may not accurately reflect the nature and frequency of political debates among everyday Americans. In three studies involving nearly 3,000 participants, researchers found most debates occur not with strangers on social media but rather among family and friends. Moreover, participants often felt positive after such discussions

“We have these misperceptions because of algorithmic amplification of negative media and negative interactions on social media coupled with the fact that we tend to really remember negative information,” says Bailey. “It creates this perception that we’re all just out there fighting with strangers.”

In fact, one study with a representative sample of nearly 2,000 Americans showed that people overestimate how frequently others engage in debates—and this misperception is especially pronounced for debates with strangers online. This false perception has psychological costs, the researchers say, fueling increased feelings of hopelessness about the future of America.

“Our findings suggest that Americans may experience a false reality about the landscape of debate which can unnecessarily undermine their hope about the future,” the researchers wrote in the study, published in the journal Scientific Reports and co-authored by Michael W. White, Sheena S. Iyengar, and Modupe Akinola of Columbia Business School.

Difficult and nuanced conversations

Bailey says the genesis of the project was reflecting on her own experience. “When I think about who I talk about hot-button issues with, it’s my colleagues and friends,” she says. “Engaging online feels like a waste of time. Why would I have a difficult and nuanced conversation with someone I don’t know or trust?”

Bailey, who studies authenticity, says online debates often feel artificial, with people less willing to openly share their personal experiences and more often just trying to make a point. But while we have a daily ringside seat to the most heated online debates, we lack line-of-sight into people’s private kitchen-table conversations—and these are harder for researchers to observe, recreate, and measure.

Perceptions of ‘typical’ debates

In their first study, the researchers asked 282 participants to freely recall a recent debate they had witnessed or participated in. About half of the participants described debates they observed online, and recounted that these interactions skewed more negative than positive. Interestingly, the respondents believed these instances were representative of typical debates, highlighting a perception that debates—particularly online—are generally seen as negative.

Personal experiences with debate

The second phase included two studies delving into personal debate experiences. The first involved 215 people in a behavioral science research lab, while the second included 526 individuals recruited online. Participants in both groups were asked about the topics they debated over the past year, who they debated with, and how they felt afterward. They were also asked to choose from a list of twenty common topics—including climate change, gun control, gender identity issues, and reparations for slavery—which ones they had debated.

The results revealed that reproductive rights and vaccines were the most common topics, while other contentious issues, such as policing and immigration, were debated less frequently. Most of the topics were debated by less than half of participants. Contrary to the popular belief of hostile online interactions, participants said the majority of their debates occurred with family, friends, and other close contacts.

In terms of emotional impact, online participants reported that their average post-debate feeling was positive, suggesting that discussions, even on divisive topics, often ended on a constructive note. The lab participants’ feelings were neutral, neither overwhelmingly positive nor negative.

“That was surprising to me, since I was not expecting for people to report feeling positive after a debate,” Bailey says. “That suggests that at least on some topics, people are better at finding a compromise or at least ending on a positive note.”

Measuring misperceptions and their impact

The third study was an investigation into how Americans perceive debates compared to their actual experiences. About 2,000 Americans in a nationally representative sample were randomly assigned to either self-report their own debate experiences or to predict how often others engage in debates.

The results were striking. Across almost all categories, people significantly overestimated the frequency of debates, especially online debates involving strangers (the exception was in-person debates with family members). In addition, this overestimation was strongly linked to a sense of hopelessness about the future of America.


The research highlights a critical gap between perception and reality. “Taken together, these findings suggest that the ‘typical’ debate seems substantively different than two strangers typing at one another from behind their computer screens,” the researchers write. This misperception could be due to the visibility and virality of negative content on social media platforms, where extreme views often get amplified over moderate or conciliatory tones.

Second, the findings suggest that these misperceptions could be contributing to broader societal despair regarding the political climate and the future of democracy in America. By assuming that debates are overwhelmingly negative and frequent, people may feel a sense of futility about political engagement and discourse. (The researchers cautioned that this connection was largely correlational.)

Lastly, the research points to the need for interventions that not only make debates more productive but also adjust public perceptions about political debate. Educating the public about the actual dynamics of debates could help mitigate feelings of hopelessness and encourage more constructive and hopeful engagement with political processes.

Read the paper:

Americans misperceive the frequency and format of political debate
By Erica Bailey, Michael W. White, Sheena S. Iyengar, and Modupe Akinola
Scientific Reports, March 2024

2024 MBA grads told to never stop questioning the status quo

group of graduates in caps and gowns, one taking a selfie
The Full-time and Evening & Weekend MBA classes of 2024 graduated May 17 at the Greek Theatre. All photos: Brittany Hosea-Small.

Under sunny skies, the class of 2024 Berkeley Haas Full-time and Evening & Weekend MBA students were urged to never stop learning, to consider the strength of their character throughout their careers, and to stay connected long after they leave Haas.

Dean Ann Harrison welcomed the crowd of 423 graduating MBA students, along with their families and friends, to the Greek Theatre. She urged students to help each other after they graduate, give back, and draw on their resilience and determination.

“You are not just walking away with an MBA,” she told the graduates. “You are walking away with the business version of a superhero cape—power and influence. Not the kind of power that lets you leap tall buildings in a single bound. No, this is a real-world superpower: the power to change the world—one insightful conversation, one strategic hire, and one ethical decision at a time.” 

graduate walking the stage with his diploma in cap and gown
Photo: Brittany Hosea-Small

Harrison introduced Monica Stevens, the 2024 commencement speaker, describing her as “a person of uncommon distinction and a great citizen of Haas.” Stevens urged graduates to dive into difficult conversations, collect “curiosity partners”—people who challenge you and open you up to new ideas—and be open to unlearning the things that we’ve learned in life.

“Please, repeat after me,” Stevens, who is an executive search consultant with Spencer Stuart and recipient of the Raymond Miles Service Award in 2017 for her work in supporting and improving diversity, equity, and inclusion initiatives at Haas, said. “‘Uncomfortable conversations are not my enemy. They are my secret weapon.’ I hope you take that to heart because, in today’s world, I know it is hard to have uncomfortable conversations about race, politics, gender, religion, identity, or what is the best business school in the world. It is a must-have skill, and guess what? You have that skill.”

woman standing at the podium on stage at commencement
Commencement Speaker Monica Stevens urged students to dive into difficult conversations. Photo: Brittany Hosea-Small

EWMBA student speaker Katherine Zepeda Arreola, a double Bear who immigrated to the United States with her family when she was 7 years old, called the class of 2024 “the best class Haas has ever seen.” Zepeda Arreola, who is heading to work at Apple after graduation, gave a shout out to each of the EWMBA cohorts, including her own—the blue cohort. “Thank you for being an incredible group of people,” she said, before switching to Spanish to thank everyone who supported them during the program. 

Zepeda Arreola emphasized the importance of continuing to build character throughout their careers by showing up on time, doing what you commit to doing, and speaking up when it’s hard. “Not only is our MBA a great accolade; there’s something else that will speak volumes wherever we go: our character…it is what people will remember.”

FTMBA student speaker Xavier Jefferson, a first-generation student who came to Haas to pivot from working as a financial advisor to an investor, told the class to never stop investing in friendships. 

“We’ve laid the foundation for a long-term investment,” he said. “But we must recognize that not every investment will turn out like Nvidia. Some might even crash and burn like FTX. But that doesn’t mean you stop investing, especially after we ascend to those offices with pristine downtown views. Don’t hesitate to text that person you thought about on your morning commute, to press accept on that random FaceTime, to make time when you are in town. I might be cooking.” 

Jefferson’s speech received a standing ovation before all of the students walked the stage, tossed their caps, and headed to the courtyard for a reception. 

Diarra White, MBA 24, who is joining McKinsey after graduation, said the day was bittersweet, but she’s ready for the next chapter. When asked for a phrase to describe her Haas experience, White said, “full of love.”

two women grads in cap and gown smiling
Photo: Brittany Hosea-Small.

EWMBA commencement award winners:

  • Academic Achievement Award: Rajit Johri
  • Question the Status Quo: Joselyn Baety
  • Confidence Without Attitude: Emeka Ugwu
  • Students Always: Anmol Aggarwal
  • Beyond Yourself: Marissa Maliwanag
  • Berkeley Leader Award, given to the student who embodies all four of Haas’ Defining Leadership Principles: Khoa Dao 
  • Cheit Award for Excellence in Teaching (evening program): Park Sinchaisri, who teaches in the Operations and Information Technology Management group.
  • Cheit Award (weekend program): Flavio Feferman, who teaches the Seminar in International Business: Brazil.
  • Cheit Award, Graduate Student Instructor (GSI): Patrick Richard Drown

FTMBA commencement award winners:

  • The Outstanding Academic Achievement Award went to Albert Deng, who will be joining AWS at Amazon after graduating.
  • Question the Status Quo: Emani Holyfield and Lizzie Hoerauf
  • Confidence Without Attitude: Kelsie Smithson
  • Students Always: Whitner Chase
  • Beyond Yourself: Caroline Patricia Jimenez 
  • Berkeley Leader Award for embodying all four Defining Leadership Principles: Anupama Tej

Berkeley Haas 2024 undergraduate class urged to invest in relationships, ‘stay connected to each other’

two men in graduation cap and gowns shaking hands
(L-R) Graduates Yassen Tarig Abdelfatah and Jacob Williams. Photo: Katrina Koski

Seek mentors of all ages, engage with discomfort, and invest in relationships were parting words delivered during the Berkeley Haas Undergraduate Program spring 2024 commencement ceremony.

“Become a master relationship builder,” said Commencement Speaker Jasvinder (Jas) Khaira, BS 04, a senior managing director and founding partner of the Tactical Opportunities Group at Blackstone. “Seek out mentors early in your career, and contribute to the relationships by adding value to them. Be a mentor to others, no matter your age or title. Those relationships will give you context when you hit the inevitable lows in life, and they will remind you of purpose when you are hitting your highs.”

Courtney Chandler, senior assistant dean and chief strategy & operating officer at Haas, welcomed about 500 graduating students in the class of 2024, along with family and friends who gathered at the Greek Theatre.

(Watch commencement video below)

Erika Walker, senior assistant dean for instruction, congratulated students for completing their studies at the No. 2 undergraduate business school in the United States. Forty-three percent of the 2024 graduates are women, 47% earned a dual degree, and 22% are the first in their families to go to college, she noted. 

“We are so proud of you, as are your parents, mentors, and loved ones who supported you along the way,” she said, calling out all of the family members who flew from around the world to attend commencement. “Let’s give them a round of applause.” 

Walker added that no matter where life takes you, a Berkeley Haas degree will open doors.

“Stay connected to each other, help each other succeed,” Walker said. “You are now part of a global network of more than 43,000 and more than half a million Berkeley alumni.” 

three women wearing graduation gowns and caps
2024 graduates walking toward the stage to receive diplomas at the Greek. Photo: Kim Girard

Khaira shared advice, gleaned from his career and personal life, including thoughts on the toll that 9/11 took on his perception of safety as an Indian man “wearing a turban and a beard.” Calling his father after the Twin Towers fell, Khaira said he told him he wanted to run away. His father asked him where he would go.

“I told him, ‘I don’t know. Maybe India?’ And the next moment was a pivotal part of my life that I won’t forget. He responded, ‘There is nowhere to go. Even India, of course, has its own religious discrimination.’”

That’s when Khaira said he realized “this wasn’t going to be an easy fix. There was nowhere to run.”

“As you graduate from Haas and start your career people will disagree with you, you will feel disrespected, you will deal with conflict,” he said. “There is no gain in running away from it. There is no value in responding with rage or ignoring it. Coming to my own terms with discomfort has been one of the most important life skills I’ve had to wrestle with. How do I gain perspective by using empathy? Does this person really want to hurt me, or are they insecure? Can I successfully move forward knowing I control nothing but can still influence everything?”

three people at commencement, one wearing a cap
Left-right: Katrina Koski, director of inclusion & belonging at Haas, Saikat Chaudhuri, faculty director of the M.E.T. Program, and Emma Daftary, assistant dean of undergraduate programs. Photo: Katrina Koski

Emma Daftary, assistant dean of the Berkeley Haas Undergraduate Programs, presented awards to students and faculty, including:

  • Kevin Liao, Departmental Citation, awarded to the student with the most outstanding academic achievement in the field of business. A graduate of the Global Management Program (GMP), Liao is heading to J.P. Morgan.
  • Question the Status Quo, Chen Dai: Dai is an entrepreneur, engineer, and the first international student from China to graduate from the M.E.T. program at Berkeley Haas.
  • Confidence without Attitude, Shivum Berry: Berry built a yo-yo company at age 14 and went on to create a course at Berkeley on building an e-commerce business.
  • Students Always, Sakura Kappel: A transfer and reentry student raised by a single mother in the Philippines, Kappel “exemplifies a student who likes to question established norms and explore diverse perspectives, even if it may ruffle feathers.”
  • Beyond Yourself, Norma Garcia Galvan: A first-generation student, Galvan values community building, mentorship, and uplifting marginalized communities, which stems from her upbringing in an immigrant Mexican household.
  • Cheit Award for Excellence in Teaching for the Undergraduate Program: Haas Lecturer Mohammed Nadeem, who teaches marketing.
  • Outstanding Graduate Student Instructor: Kunal Cholera (his second win as a GSI).

Celebrating her 22nd birthday, undergraduate student speaker Julianna De Paula shared the anxiety she felt before leaving her family in Brazil to study at Berkeley. “As soon as I stepped foot on this campus, all of the anxiety went away. After meeting my roommates, classmates, and professors, I finally realized that I’d found a new home very far from my own,” she said.

De Paula, who will join L’Oreal as a marketing management trainee after commencement, said it’s the sense of community and belonging at Haas that she will miss most, including “the friendships forged over group projects, the mentorships of our professors, and the shared triumphs and challenges that have united us as a class.” 

Summer Hua, the Haas Business Student Association (HBSA) president for the 2023-24 school year, and a first-generation international student, thanked her professors and her HBSA team, the “unsung heroes advocating for student voices” and “friends who have turned into family.” 

four women, two wearing commencement cap and gowns
Graduates gathered in the courtyard after the commencement ceremony. Photo: Kim Girard

After students tossed caps, they headed to a post-commencement reception in the courtyard as the sun broke through the morning fog. Asked to describe her time at Haas in one word, graduate Rachel Sanchez said “friends.”


EWMBA students explore business in South Africa

Group of students in South Africa
EWMBA students participating in the Seminar in International Business (SIB) in South Africa, an annual Berkeley Haas Evening & Weekend MBA Program course.  

One day last March, I gathered with my fellow EWMBA students inside of a 20-story building overlooking Johannesberg to learn about the world’s seventh largest coal mining company.

Our group also toured Nelson Mandela’s red-brick “matchbox” in the Soweto heat and spent time absorbing city politics, noshing on the local cuisine and markets, and visiting small businesses—all part of the Seminar in International Business (SIB) in South Africa, an annual Berkeley Haas Evening & Weekend MBA Program course.  

SIB South Africa builds upon the relationships of professors Mark Rittenburg and Ingrid Gavshon, who have deep connections to South Africa through decades of work around coaching, communication, and media in the country, and Lecturer Janine Lee, EWMBA 14, who previously attended the trip as a student, the SIB faculty team built a curriculum to push students to become more global-aware leaders and communicators.

While labeled as a business class, business was one many windows we were able to peer into while visiting South Africa. 

Part of our class pre-assignment focused on South Africa’s history and politics. We discussed Nelson Mandela’s rise, the years of apartheid, the country’s democratic transition, and its current economy. Learning about its history reminded me that apartheid was not a relic of a forgotten past but indelible in the townships we drove past and part of what drives South Africa’s entrepreneurs toward change. 

Through the network of our professors, we had a unique week, highlighted by the hospitality of their friends and professional colleagues in intimate settings that helped us better understand companies. We visited ABSA, a banking conglomerate based in Johannesburg, and SASOL, one of Africa’s major energy companies, where we had a chance to speak to some of the senior leaders. 

Outside of traditional corporations, we also visited multiple non-profits in South Africa, including iHub, Harambee, and Rise Above Development, learning about the aspirations of South African youth. A highlight was a chance to collaborate on a crisis management role-play exercise with the students at iHub, giving them a glimpse of how things could work in their future careers. Between rounds of Nando’s chicken, a South African classic, we continued many conversations as part of an informal meet and greet, discussing careers, skill development, and passions. It was a lesson in hope, shared humanity, and, once again, perspectives you often won’t find in a standard business school class. 

a group of students sitting in a circle working on a project.
MBA students working on a project in South Africa. Photo: Ingrid Gavshon

Our most unique visit was with the deputy mayor of Cape Town, Alderman Eddie Andrews. A city the size of Boston that prides itself as one of the most beautiful places in the world, we got an inner glimpse into the workings of Cape Town. A former rugby player turned politician, Andrews was kind, patient, and enthusiastically answered more than an hour of questions, touching on everything from structure, sustainability, funding, national politics, and more. His mission to set an example of good governance for South Africa inspired us.

Layering on the many ways we interacted with different sectors of the South African economy, the class also allowed us to experience South Africa as tourists, from the grasslands of Kruger National Park to the iconic mountains of Coastal Cape Town. We took solemn tours of Mandela’s prison on Robben Island and the Apartheid Museum, where we spoke to Mandela’s former jailer. They all contributed to our growing connection and understanding of the country.

It’s hard to talk about SIB without mentioning the people. As with any other Haas class, having diverse experiences added dimension. As EWMBA students, we all come from different backgrounds with different motivations for the trip. Our industries span from technology, healthcare, real estate, and education to jobs in sustainability, sales, and clinical research. This spectrum was foundational to our visits, yielding new questions at every site that drew upon students’ unique curiosities.

We went on excursions and dined together, shared jokes while passing snacks on our bus, and spent time reflecting on the week’s fun, stimulating, and complex experiences. Our celebration dinner included emotional toasts, superlatives, and Polaroid memories. As part of the course, our faculty team prompted us to write a letter about our dreams and aspirations for the trip, which encouraged shared vulnerability that pushed many of us to the edge of our comfort zones.

Toward the end of our trip, many of us agreed that SIB had shifted from a class and transcended into something more abstract—an experience, a journey, an academic version of catharsis. 

Reflecting upon the best parts of SIB, I was reminded of one of the Berkeley Haas core Defining Leadership Principles: Beyond Yourself. In South Africa, we were forced to challenge our privilege consistently. There was nuance in everything there, from starting and investing in a company to advising young people who come from very different upbringings. In all of this, we saw ways to better ourselves, better our perspectives, and grow an inch closer to the ethos of leadership we saw as a symbol of Haas.

For many of us, it was our first time visiting South Africa. Thanks to this experience with Haas, it may not be our last.

Haas Voices: Tsadiku Obolu, BS 24, on the power of therapy

Haas Voices is a first-person series that highlights the lived experiences of members of the Berkeley Haas community. Here, Tsadiku Obolu, who is graduating from the undergraduate Management, Entrepreneurship & Technology (M.E.T.) program this week, shares the wisdom he gained while working on his mental health.

man wearing commencement sash standing next to Berkeley Haas sign
Tsadiku Obolu is graduating from the Management, Entrepreneurship & Technology (M.E.T.) program this week.

While serving as the senior advisor for the Haas Undergraduate Black Business Association, or HUBBA, I typically ended each of our meetings with some ‘senior advice,’ or words of wisdom.

Some of that advice included ‘Know what you don’t want as much as what you do want,’ and ‘You don’t become a leader to be acknowledged by everyone. You are a leader when everyone acknowledges you.’

I was only able to give this advice because I learned it in therapy.

It’s strange to find myself talking about mental health therapy as a Black man. In our culture, men are already looked down upon for being vulnerable and aren’t given the space to talk about their mental health. On top of that, Black men are seen by many as hyper-masculine and are often forced to hide their emotions, so they don’t seem weak.

I started therapy 10 months ago because I had difficulties relaxing and was having issues with sleep and focus. I am a very deep thinker and a hard worker. This deep thinking has helped me to achieve high goals academically, which got me admitted into the highly competitive M.E.T. program four years ago (after my mom convinced me to apply!). But it also had a downside: I couldn’t stop fixating on my thoughts.

Since starting therapy, I’ve become a convert. Not only have I found it incredibly helpful to have someone who helps me work through my problems—the sessions also opened up a new way of thinking for me. My ability to deal with problems in a constructive way has increased tremendously. I started to look at the world differently. I think of therapy like the gym. If you want to train your body, go to the gym. But if you want to train your mind, go to therapy.

man sitting on a wall wearing commencement sash with campanille in back
“One of the greatest lessons I have learned in therapy, and at Berkeley, is the great power of vulnerability.”


One of the greatest lessons I have learned in therapy, and at Berkeley, is the great power of vulnerability. In being truly vulnerable and speaking my truth, I believe that I brought the people into my life who were meant to be there. I attracted the right circle of friends and pushed out the people who weren’t supposed to be there. It was only when I began being true to myself that I was able to create that community. I found true friends, and I accomplished more than I ever could have imagined.

Some of those accomplishments included being the first-ever Black person in my consulting club—a club that now has seven Black members. I recruited members by engaging with the the Afro Floor (short for the African American Theme Program, a community at Cal that enables students to exist in Black spaces, where they can learn from Black/African theorists, scholars, and organizers), and Black Wednesday, spaces that consulting clubs typically don’t enter because their members don’t come from these communities.

One of my close friends, UC Berkeley student Marcus Aina, and I also founded HUBBA’s first consulting fellowship for Black students on campus, which provides access to previously unavailable skills and resources to help them apply and make it into competitive consulting or professional clubs.

Lastly, therapy helped me redefine how I view success. Success goes far beyond career, money, or any particular job.

I believe that my success is defined by who I am, not where I will work after I graduate (though I am thrilled to be heading to Google). My beliefs are more aligned now with one of my favorite Japanese manga shows Jujutsu Kaisen. ‘Are you the strongest because you’re Satoru Gojo? Or Are you Satoru Gojo because you’re the strongest?

he asked. To me, that means you are not defined by the job or accolade you get; you are defined by the person you are to get it. Being the best version of yourself brings the achievements. You are not your best version because of what you achieved.

I believe everyone should get a therapist. I have helped people at UC Berkeley, friends, and even family connect with therapists. It can be difficult to take that first step, to make the phone call to your doctor and talk about your needs. But as someone who has been in therapy for the last 10 months, I couldn’t be more happy with how much I have grown.

Reflecting on my time at UC Berkeley, true success is measured by the positive impact you have on others and the world as a whole. My time at Berkeley was not successful because of a job I got. It was successful because of the people I was able to impact along the way.

The poet Rumi once said, ‘You are not a drop in the ocean. You are the entire ocean in a drop.’ To that, I say that when you impact a person’s life, you are not impacting a single drop. You are impacting an entire ocean.

Stripe co-founder and CEO Patrick Collison on “prizing the small details”

A man speaks into a microphone on a stage while a woman and man listen.
Professors Jennifer Chatman (left) and Sameer Srivastava (center), co-directors of the Berkeley Center for Workplace Culture & Innovation, interview Stripe CEO Patrick Collison.

Patrick Collison and his brother John conceived of financial services company Stripe as something that they thought should already exist. 

On the way back from a UC Berkeley-hosted startup event in 2009, John, who is president of the company, suggested that they turn their idea for an “easy way to move money online” into a reality by creating their first prototype. Now, Stripe is used by millions of businesses across almost 50 countries, from startups to global enterprises like Ford and Amazon, having reached a $1 trillion in total payment volume. 

Co-founder and CEO Patrick Collison shared his journey founding Stripe and the company’s mission to “grow the GDP of the internet” at a recent Dean’s Speaker Series, co-hosted by the Berkeley Center for Workplace Culture and Innovation. Professors Jennifer Chatman and Sameer Srivastava interviewed Collison in a fireside chat format.

Born and raised in rural Ireland, Collison grew up without a consistent internet connection, only reading about it in books. At age 13, he made his first pitch to his parents for satellite internet. It was from here that he discovered programming, planting the first seeds for one of the most successful software-as-a-service companies today. 

But the journey from startup to Fortune and Global 500 wasn’t always smooth. Between difficulty finding growth to feeling like he was misallocating time, Collison reflected that the first few years were a time of trial and error. He noted, however, that if the idea and the market are good, startups can actually be fairly resilient as management learns along the way.

“I think it’s much better to be right than to be consistent. And I think somehow getting yourself into the psychological frame where that’s OK, and you can swiftly recognize, ‘well, I tried this, it’s really not working, let’s do something else,’” Collison said. “As long as you get into that mindset, I think a lot of the actual errors themselves are recoverable.” 

With the success of the company dependent on handling people’s money, Collison likewise stressed the importance of ensuring a meticulous and diligent atmosphere at Stripe. 

“There’s this culture at Stripe of just really prizing the small details. And we talk a lot about craftsmanship and rigor and abstractions that can endure over decades and sort of really getting those right. So I would say precision is pretty deeply embedded,” he said. 

Stripe is also known for its early adoption of a writing-oriented culture. An avid reader and self-described “misanthropic introvert,” Collison said this came about partially as an accident. But he likewise reflected on its benefits, citing written work as valuable for its ability to be reflected and improved upon. 

In 2020, the company launched Stripe Climate, which allows users to direct a portion of their revenue toward scaling carbon removal technologies, leading to the implementation of the second-ever large-scale advanced market commitment (AMC) for carbon removal.

The company’s mission to do good hasn’t stopped there. Believing access to the internet is crucial for global development, Collison stressed the role Stripe has on aglobal scale. Citing his own experience witnessing the rapid expansion of Ireland’s economy, he stressed the “moral importance” of economic growth for parts of the world that have been left behind. . 

“I think the internet is one of the most important technologies ever created with respect to the enablement of global development,” he said. “Stripe’s mission is to grow the GDP of the internet.”


Read the full transcript 

– Good afternoon. It doesn’t seem like it’s on. Is it good? Good afternoon. Welcome to our Dean’s Speaker Series, co-hosted by the Berkeley Center for Workplace Culture and Innovation. My name is Jenny Chapman. I’m the associate dean here at Haas. Dean Harrison is actually traveling on school business, kind of around the world right now. She apologizes that she can’t be here, but we are here, and I’m so absolutely thrilled to introduce our guest today, Patrick Collison. Patrick has been an entrepreneur, I’m guessing since the day you were born. He created iPhone apps with his brother John and his teams, founding Auctomatic while at MIT, and co-founding his biggest venture Stripe, which we’re going to talk a lot about. Stripe was born when Patrick and John looked for a payment platform but couldn’t find all of the features they thought would be important. And Stripe debuted in 2010 and grew exponentially because the product is really simple for businesses to implement. Of course, the back end is anything but simple, but it’s easy on the front end for customers. Through Patrick’s leadership, Stripe has reached, listen to this, $1 trillion in total payment volume. So it’s really becoming a dominant methodology. And today—

– You can’t assume the causality, though, there. You can’t say, like, because of my leadership. It could be despite my leadership.

– I’m sure that that’s correct, but we will talk about the attribution, I’m sure. You will deflect it, and we will heap it on. So today, millions of businesses, from hypergrowth startups to global enterprises like Ford and Amazon, use Stripe to accept payments and payouts, manage complex business online. Patrick, we were back in our green room here, and Patrick was telling us about his biomedical research foundation, the Arc Institute, that he co-founded in 2021. Fascinating, fascinating work. Through the Arc Institute, Patrick and his co-founders are pioneering new model research in partnership with Stanford, UC San Francisco, and UC Berkeley, and hopes to enable passionate biomedical investigations to study and address complex diseases, which gives us all great comfort to know that brilliant minds are researching some of the most difficult health challenges that we face. So Patrick, we’re incredibly grateful to have you here today, to impart your learnings on our student body.

– No, thanks for having me. And it’s a particular honor to be here because the first time I tried to come here, you guys rejected me. So it’s… No, look, I might have rejected me as well.

– So did you land at your safety school, MIT?

– My first ever trip to America was to the Bay Area to… And I visited Stanford and Berkeley, and those are my first, literally, kind of two experiences of the U.S., and I just assumed all of the U.S. is like this. And so then, I, yes, decided to apply to college here, but I couldn’t get further than the East Coast.

– Oh my gosh. Well, that was a miss on our part. I can’t say it would be the first or last one, but… Anyway, let me do two more housekeeping things, and then, we can properly welcome you. The first housekeeping issue is: You notice that you have note cards on your chairs, and a pencil. And it’s not for keeping your golf score. But please, if you have questions, please note them on the card. We have collectors, Sarah and Audrey, who will be collecting them throughout the session and bringing them up here. And at around 1:15, 1:10/1:15, we’re going to start answering questions from the audience. So please, be sure to capture those questions. And second, I want to introduce my colleague, Sameer Srivastava, my partner in crime. We are the co-founders of the Berkeley Center for Workplace Culture and Innovation. And many of you probably have had Sameer for the power and politics class. So Sameer, welcome too. So let’s give now a proper welcome to Patrick if we might. Thank you so much for coming up. So let’s start with a kind of softball question, which is, if you could walk us through your kind of career progression, I think it would be of great interest to our students.

– Oh gosh. Alright, well you already heard an important detail in this, but, so I grew up in very rural Ireland, and our house was kind of far from the phone exchange, so it’s more detailed maybe than the career than you want, but you can push fast-forward at any any point. But just the relevant kind of consequence of that was, we couldn’t really get a proper internet connection. And so, I first learned about the internet by reading books and borrowed from the library, and to think, “Wow, this internet thing sounds great.” And there was no TikTok or anything. And then, actually, the first pitch I ever wrote was to my parents when I was 13, trying to convince them to get this kind of pre-Starlink satellite internet connection from Germany, and very, very graciously, and I don’t know, forbearing exceeded, and we got it, and it was 100 euros a month or something, which was a big deal. So once we got that, then, I discovered programming, and kind of fell down that rabbit hole. And then, when I went to MIT, and maybe you guys have had kind of versions of this experience, but I considered myself pretty good at math and physics and sort of science and things like that when I was in high school. And so, MIT had three different intro kind of freshman physics classes. And I thought, with great ambition and virtue, that like I’d go take the hard one, and I did, and it was hard. And they had this kind of particular midterm, and that, I guess they use this kind of weed out, I don’t know, the something… And I remember the average score on that midterm was like, a 43 or something. And I was feeling, initially, I don’t know, well kind of mixed feelings, but somewhat proud I’d scored like a 70 or something like that. And then, I saw that this… I don’t know if this is good for one’s psychological well-being, and maybe now this policy has been reconsidered in the intervening years, but at the time, they published everyone’s score publicly. And then, I saw that this guy, Yufei Zhao, had gotten like a 97. And that was like a big moment in my life where, to be clear, I’ve never interacted with Yufei Zhao, I don’t think he’s heard of me.

– But you certainly remember his name, don’t you?

– He is large in my life. And I thought, well, “If Yufei Zhao exists and can be so spectacularly better than me at physics, well, maybe I shouldn’t become a physicist. Comparative advantage, Ricardo, the whole thing. So I did some soul-searching, and by the way, I looked him up, and he’s done very well now in math and physics. So, I think we… And he now trains MIT Putnam team, and they’re doing… Anyway, so he found his thing.

– He didn’t found Stripe.

– Well, look, I think he’s not doing… I think Yufei Zhao has self-actualized with tremendous effectiveness.

– You both have.

– But anyways, so… But I done all this programming in high school, and so… And then, right around the time of that midterm, this was fall of 2009. Sorry, fall of 2006, excuse me. Reddit was purchased by Conde Nast for I think $12 million. And I knew the Reddit guys a little bit because YC started out in Cambridge, and they were based there in Cambridge, and they were just like normal people, or so I thought, and the idea that they’d just sold like a website, like anyone can make a website, for $12 million, just there, was a big kind of shift in my perspective. And so, I thought, “Well, not cut out to be a physicist, maybe this startup thing could be interesting.” And I really liked programming. And so, my brother and I, we decided to start a company. It did OK. It was acquired for a reasonably small amount. Went back to school. And something we learned over the course of that first company was… Cloud computing was just starting back then. I think EC2 launched in ’07, maybe ’08. And it was now getting incredibly easy to just launch a website, and you could do that in an afternoon. You didn’t have to call someone up and rent a server. But whenever you wanted to move money, it was kind of jumping back in time a century. You’d go to a bank and fill out paperwork, and the forms were in Latin—or so it felt. And so, it was just this kind of weird dichotomy, where certain aspects of setting up a business were becoming kind of so streamlined. And then other parts were, yeah, were so… There was such a high activation energy barrier and kind of so much inhibition, and we thought something like Stripe must exist, and we were Googling for it. Like, there must be, like… How could there not be an easy way to move money online? Like, it’s not an obscure need. But we eventually concluded there wasn’t. And so, we’re walking back from dinner, not that far from here, a restaurant in San Francisco, and John turned to me… We’d come out here, actually we come out here for a startup event at Berkeley. You guys hosted YC startup school in 2009. And we were feeling very inspired. And so, after dinner, John, we’re walking back, John said to me, “Well, we should just build a prototype of this Stripe thing. You know, it can’t be that hard.” Here we are.

– Wow, that’s great.

– Great, so we wanted to ask you also about the early days of Stripe, ’cause every startup faces challenges and hurdles. So, could you describe for us, like, one big challenge or hurdle that you encountered in the early days of Stripe, and how you overcame it?

– Well, I had breakfast this morning with another startup founder, and we were kind of reminiscing about or discussing the fact that people will sometimes ask us now, I mean, she’s been working on our company for, I don’t know, five or six years now. And people will sometimes ask, like, “Is it still fun?” And we were kind of making fun of this question because the early stages of the company are never fun. And so, is it still fun? Like, which period was fun here? So, look, the early days of Stripe, like, in hindsight, it’s now, like many maybe intense experiences in life, you look back on them with some kind of fondness, but when you’re living them, I mean, you don’t know the outcome. I mean, they’re just stressful. I remember very vividly just how intent, intently, and intensively we worked. And I don’t know if we kind of had to, but we felt like we had to, and we did. Like, we started out down in Palo Alto, and we hired this guy who lived in San Francisco, and he ended up deciding to move from San Francisco to Palo Alto because the last Caltrain left Palo Alto to go north at 11 p.m., and he felt guilty leaving the office early every evening. And that’s, like, again, maybe that was… We were kind of misallocating our time or something, but just as a descriptive matter, that’s how it played out. And then, of course, there are all sorts of undulations and tribulations. Like, I remember our first serious outage very vividly where people are using Stripe to move money, and if Stripe is down, their business is down. So we felt this very intense responsibility, and a rack blew up at a data center, and Stripe therefore was unavailable. And we had a kind of… We didn’t have proper redundancy at the time. And I was paged at 2 a.m., and very unusually I’d left… I mean, Stripe was five people at the time, and very unusually, I’d left my laptop at the office, so I had to get on my bike, pedal to the office, start trying to fix things. It took six hours. Eventually, 8 a.m., 10 a.m., it’s back online. I remember feeling so horrifically dejected because I realized, as Stripe recovered, that we hadn’t received a single complaint. Nobody had even noticed. Stripe was that inconsequential in the world. And then, of course, subsequent to that, we had production issues that were… In fact, there was no shortage of complaints. And you’re taught to be kind of careful what you wish for. But I would say overall that… And by the way, I think this is not… I don’t think Stripe was in any way an unusual experience here. Like, I don’t think it’s in any way unusual where the experience of the first five years were… It was fulfilling, but, yeah, it was just like difficult AF. And I remember Jensen recently saying publicly, Jensen Huang from NVIDIA, that, if he’d known what starting NVIDIA would be like, even knowing the outcome today, the hottest company in the world, whatever, that if he’d known in the beginning what it would actually take, that he wouldn’t have started it. And I think, even when you condition on success, you get sort of a surprising number of responses like that.

– So we’ve been—

– I’m sorry, I’m really encouraging you guys to start a company. It’s great. Such a motivational fireside chat here. But look, actually, OK, if I knew what it would take, I would still start Stripe. There.

– You’ve heard it here first.

– Maybe NVIDIA was just harder or something, and I’m just a wimp, but…

– Yeah. Maybe he was having a bad day. So we’ve been really intentional here at the Haas School at creating a deliberate culture, which our students know well. We have four defining leader principles. One of my favorites is confidence without attitude, which is why I think our students are so open to learning and not overconfident. But I’m wondering about your intentionality in designing the culture at Stripe, and what you did initially, how you’ve scaled the company. I think now you have something like 7,000 employees. What looks different now? How is the culture doing? How are you thinking about it? We would be super interested to know.

– Well, just, you mentioned kind of the culture, the values here. And actually, we did notice pretty early on, and I won’t mention kind of any other schools, but just, we noticed that Berkeley students were more humble. And that was something that… But gee, you can’t let that go to your heads. It’d be self-defeating. So you can’t be proud of that. But yeah, I don’t know if it’s the Irish thing or something, but somehow… I mean, Ireland has kind of a hypertrophic pernicious version, I think, of humility, where we start to get resentful of anything that’s successful. Like U2 or any other tremendous Irish export, we take a very dim view of those things. But anyway, so we, early on… I don’t know. Well, partly because we knew that Stripe, even if it worked, would take a long time, just ’cause it’s an infrastructure business. With Snapchat or TikTok or something, everyone can just kind of decide overnight, we’re going to adopt it, it’s going to become super popular, within two years it’s an overnight success, whatever. If you look at the internet, or if you look at… Take a company like Amazon, kind of companies that are operating more at the sort of infrastructure level. Like Amazon, within its first couple of years, was not growing 100% year over year or something like that. Amazon, within four years, was growing at about 30 points a year. And what’s remarkable about Amazon is just the durability with which they’ve sustained that growth, but the kind of the rate itself is not particularly noteworthy. And similarly, if you take the internet, the internet has grown at a compounded rate of around 30% to 40% year over year. But in no year after the first two, I think, did the internet double year over year. Again, it was just this remarkably sustained growth over the course of, now, more than four decades. And so, anyway, we kind of knew that Stripe would… Again, even if it was going to work, would probably have roughly that kind of character. And so, yeah, we wanted to figure out a sort of a cultural orientation that we thought would kind of befit that, and that that requires recognizing that we’re not here to build cars, we’re here to build roads, and it’s the kind of personality not of someone who wants to build some hyper-successful app, but the kind of person who would like to build a TCP stack. And that’s not everyone, and that’s fine. We need cars for the roads. And so, there’s kind of a diversity of different skills required. And again, it is very hard to separate that which is adapted for Stripe and that which is just kind of personal preference or something. But because Stripe’s domain is really complicated, and where the details really matter. Like, if we make a mistake, just one mistake, there’s a very good chance that that’s, like somebody’s paycheck is wrong or something. It’s even in a single instance… There’s this, I think, a culture at Stripe of just really prizing the small details. And we talk a lot about craftsmanship and rigor and abstractions that can endure over decades and sort of really getting those right. So I would say precision is pretty deeply embedded.

– So could you talk a little bit about your own leadership journey during that process? It’s one thing to be the leader of a small startup, another to be running an organization of the size and scale that Stripe is now. And thinking, in particular, about this idea of rigor or precision, how do you really try to embody that and reinforce it through your own leadership?

– Well, the good news about startups is, as far as I can tell, if the initial idea is good, and if kind of the market’s good, like, kind of those core characteristics, and if you’re willing to recognize your mistakes, the startups… So startups I think are actually quite resilient, and they can endure a lot of managerial malfeasance as you learn along the way. And I definitely didn’t come to Stripe with any kind of enlightened leadership expertise or sort of genetic muscle memory or something. Like, Stripe didn’t have any managers until we were 70 or 80 people. And that’s not a best practice. If we were doing it all again, I would definitely kind of invert colors on that one. And also, there’s lots of other things that I think in hindsight were ill-advised and mildly unhelpful but empirically survivable. And so, I think at a meta level, the question is, yeah, much more sort of the rate of adaptation, the rate of learning. And John and I, we’re… Stripe conducted layoffs in 2022, where… During the pandemic. I just said a moment ago that the internet, Amazon, whatever, didn’t grow that quickly. During the pandemic, it was such a crazy time that even though, again, Stripe broadly has that character, we roughly doubled in 2020 and 2021. And so, kind of our forecast, how big we would be and what we would need to sustain the service and everything got pretty out of whack. And so, in 2022, we were trying to kind of rectify this, obviously acknowledging a misprediction on our part and significant mistake. And John and I had this conversation, where we decided, imagine that we’re sort of marauding private equity raiders who’ve just purchased Stripe, and we’re horrified at the decisions the prior management has made. And the want and errors and mistakes and sort of grievous instances of mismanagement that have been committed. And somehow, I think it’s much better to be right than to be consistent. And I think somehow getting yourself into the psychological frame where that’s OK, and you can swiftly recognize, well, I tried this, it’s really not working, let’s do something else. I think, as long as you get into that mindset, I think a lot of the actual errors themselves are recoverable.

– Yeah. Better to be right. We agree with that. So…

– But it sounds like a… It’s easy to say. I think a lot of people, and to be clear, even myself, like, I think we all feel surprisingly strong kind of psychological pull to kind of intertemporal internal consistency.

– Well, there are huge biases. Actually, one of the deep experts in what’s called the escalation of commitment cycle, Barry Staw, was a professor here for many years, and it’s a very, very treacherous bias. That consistency, people really worry about having an external image of consistency, and even maintaining consistency internally, because in some ways consistency describes the essence of who you are.

– Yeah, and look, I mean, presumably there is some set of things about which one ought to be consistent, right? And so, it’s maybe wrong to toss consistency overboard wholesale.

– Right.

– But tying your self-conception and identity to specific management practices seems like maybe over-constraining the action space.

– Yeah. Well, I mean, the countervailing force is an experimental mindset, right? Where you’re actually discarding ideas that aren’t working because they’re not working.

– Yeah. And again, maybe the fact that we kind of came from the middle of nowhere in Ireland, like, it was… One thing that is, I think, helpful, a lot of different cultures around the world have kind of some self-conception of grandeur, right? The French people, English people, say Americans, one could occasionally accuse them of that.

– What?

– One thing that’s great about Ireland is, we never have delusions of grandeur. And Ireland never thought of itself as, like, the best country in the world by objective criteria. And very fond of it, to be clear. And so, anyway, it wasn’t that hard for us to think, “Well, we know nothing about this domain, and we should assume that 70% of the things we try will turn out, ex post factor, would be mistakes.”

– Yeah. Yeah, yeah. Well, an interesting issue. So switching topics a little bit, there’s a lot of discussion about… Well, we used to think about hiring people for culture fit. In fact, my dissertation was on culture fit and understanding all about culture fit. And in addition to finding people who can do the job, you want to find people who resonate with the culture that you’ve created. But people are now talking about culture add, and ensuring that you’re not just fueling a kind of homogeneous mindset in an organization. And so, I’m just interested to find out where Stripe is on this balance.

– Well, I think this question’s really interesting at the meta level, where, “How do we have more variegated and kind of heterogeneous cultures across an industry and across a society around the world so that people can find the place where, yeah, that that place is me, right?” And actually, one of the things that I really like about the internet… Like, Stripe’s mission is to increase the GDP of the internet. There’s sort of a fundamental question of like, “Why should you be excited about that?” Like, kind of, who cares? And I think part of it is, that enables increased access to goods generally, where, for most people in most parts of the world, it’s pretty difficult for them to benefit from the set of goods and services that, say, we here in the Bay Area might be able to purchase. And again, growing up in Ireland, there were so many magazines or newspapers or whatever we would get, and there’d be little fine print, “Offer not applicable in the Republic of Ireland,” where it was printed for the U.K., but they hadn’t figured out the shipping mechanics for Ireland or something. So something I think about the, just about this, kind of this global extension, global access. But maybe a second order aspect of the internet that personally appeals a great deal to me is, I think we want a… I think a richer society, not in the kind of pecuniary financial sense, but in kind of a… In the second sense of the word, is one where there’s a greater array and more complexity of goods and services, and that variety is in more abundance. And if you can aggregate more demand via the internet, well, then it can make sense to serve some very narrow niches, right? And part of what I love about Stripe is, I’ll stumble upon so many businesses where I think, wow, like, I would never have thought that that could even be a business, right? You know, people, a marketplace for sort of user designed and user-created action figures, right? Or CRM for Boy Scout troops. And these things would never make sense if you just had a village or you just had a town. It only makes sense where you can aggregate sort of the entirety of the internet’s demand. So anyway, I think that this also, with respect to cultures and if one can only work in one of 10 businesses, well, they’ll probably all… Like, by necessity, they’ll probably all have something approximating the same kind of culture just by virtue… Like, there can’t be that much self-selection going on if there’s only 10 places. And I love finding organizations with just very unusual and places where the central limit theorem doesn’t apply. And I visited the folks at Jane Street not that long ago, and I really think Jane Street would not be for most people. I mean, it probably wouldn’t be for me, but like, for the people at Jane Street, it seems awesome, and they stay there so long. Right? And my wife’s a scientist, and as you get a sense for the cultures of different departments at a university, or even across universities, you realize, well, some of these have very unusual cultures. And again, probably not even for most scientists in that area, but right for a little group of people who can affiliate. So anyway, just to your kind of point about culture add, I think figuring out mechanisms by which we can enable more of that structural diversity kind of across the board. I think that’s really helpful.

– So turning to unique cultures, I want to come back to Stripe. And one of the cultural tenets that you have talked about as being, “Continually paranoid at the prospect that we might be forgetting something important.” So I’m wondering if you could give us an example of that tenant in practice, but also, how do you keep it from going too far, from being too paranoid?

– Can you be too paranoid? What do you think? Well, if one can be too paranoid, then we might have to reconsider some things. So… The thing that makes me so paranoid, and maybe this is kind of more idiosyncratic to Stripe, is again, just the… Like, we handle around $1 trillion a year, that works out to around 1% of global GDP. And again, there’s just kind of basic point that, if Stripe is unavailable, that’s a lot of people and a lot of businesses and a lot of activity that isn’t happening. And during the pandemic, DoorDash, Instacart, Zoom, and Amazon, and so many of what kind of felt like load-bearing pillars of society, they were handling their transactions with Stripe. And so, we feel this extremely… I don’t know, solemn kind of custodial responsibility to be able to provide uninterrupted service to them, the way that they ought to expect. And so, it’s less a competitive paranoia, and more paranoia that we’ll screw something up with respect to our obligations to them. And again, I don’t know if you could take that too seriously, but for us, it’s very weighty.

– So I have a question. I used to teach a case about John Reed, who decades ago was the CEO of Citigroup, and he was one of the first to use a kind of metaphor of the back office being like a factory. You use a metaphor of front office, back office, in finance being more like a bicycle, which I find appealing. I’m a cyclist. So what does that actually mean, and how does that influence how you make decisions and how roles are thought about within Stripe?

– Well, I’ve forgotten I said that, so thank you for… It’s a good metaphor. But… The thing we spend a lot of time thinking about is necessarily in organizations you… Or maybe necessarily is a strong word, but the bureaucracies haven’t worked that well. So it appears necessary with current organizational practices to have some kind of a hierarchy. And I don’t have a better idea. So let’s just kind of take that as a premise. That necessarily involves some logarithmic game of Chinese whispers and information loss sort of through transmission. And so, the picture that the people making the most important decisions may have, might be meaningfully divergent from that which is actually true. And so, the thing I’m always wondering about is, just, “How do I know what’s actually true?” And not just how do I know, but how do leaders generally across Stripe know what’s actually true? And so, we built our own internal project management software. And it’s less because we want to be able to kind of customize the animations. It’s more that we want, like… Because it is so important that we know what reality is saying that, we want to be able to kind of figure out the optimal way of surfacing that context. And I mean, it’s true to some extent in every organization, but I think it’s especially true in knowledge work and in the creation of… Like, software is an interesting thing, where there’s mining, where maybe there’s just some kind of linear elasticity between the number of people extracting the rock from the ground and how much rock is produced in the economic value, whatever. It’s very kind of tailor-en. And then, you have movie making or novel writing, where, if you’re a publishing house, you can’t just kind of measure your likely prospective success on the basis of just number of writers, right? Like, it’s so sensitive to the specific efficacy of every individual person. I think creating software is sort of, in an interesting way, halfway between mining and novel writing, where look, there is just… There is some scaling in the amount of work and one person could not build all of Facebook, or choose your service, but it’s definitely not linear. And for us at Stripe, even though decisions have to get made, the work is not being done by the decision-makers. The software engineers and the designers and everybody involved in… The partnerships people, whatever. In the creation of the product, they’re our authors. They’re the people actually creating Stripe, and everyone else is in some sense playing a supporting role. And so, I think it’s important to have that kind of inverted mental model in mind. And it’s not sort of a feel good thing, it’s just, it’s a deep truth. Like, I don’t know how many support staff work behind J.K. Rowling to enable the books to get published. But J.K. Rowling is the one doing the writing.

– Yeah, right.

– So I’m going to turn to another facet of the culture at Stripe, which has to do—

– Can we talk about J.K. Rowling, or is she canceled? Alright, OK.

– Not yet.

– We’ll let it slide this time. So—

– We’re at a business school.

– Yes, exactly. So the other facet of the Stripe culture I want to talk about is the writing dimension. And, of course, it’s becoming more pervasive now, but my sense is you were one of the early adopters of a writing culture. So tell us a little bit about where that comes from, and then, how you reinforce it.

– It’s kind of funny. I know what you mean. It’s kind of funny to consider oneself an early adopter of writing culture for true to form tablets. What do I say? Well, partly I think it comes from… We were just kind of misanthropic introverts in the beginning and we, even when there’s only four or five of us working on Stripe, we would just communicate a lot in written form because it’s kind of less oppressive than having to talk to each other. So part of it was just that kind of predisposition of early people. And to be fair, if I must include myself. Like, John, my co-founder is much more extroverted and charming, and usually, he’s kind of… It’s rare that I’m wheeled out for public engagements.

– He’s the front man.

– You can see why. So if John didn’t exist, it’s unclear whether Stripe would have any customers. But I do like writing, and I like reading. I think it’s like a… I found very… Bruno Latour has this piece about… And he overcomplicates it because you have to for that kind of work. But he has this piece about kind of immutable, I guess, mobiles since he’s French. And he kind of makes this point that the printing press is maybe correctly associated with the advent of the scientific revolution. But maybe the sort of simplistic sense, in which we might perceive the causality there as, “OK, we have the printing press, we can distribute more stuff, and now just people have more information, whatever.” They come to more insight. He makes the point that before the printing press, manuscripts were necessarily copied by hand. And in the act of copying by hand, obviously there’s the prospect of the introduction of error. And so that means, when you kind of encounter or confront some observation where there’s a disparity between that claimed by the work or by the theory or whatever, and what is it you see, you can’t really tell. Is it because the theory is wrong, or is it because there was some boring mistake made along the way, right? And it’s kind of when knowledge became more rigid that it became easier to break in a way that is conducive to the rejection of false theories and inadequate explanations. I found that very thought-provoking. And I think there is something to that. And obviously, this also gets the difference between oral cultures and literary cultures, where, I guess back to this idea of assuming that 70% of what we believe is wrong, if we don’t write it down, it’s going to be harder to remember what specifically we thought and what specifically we believed because our minds will play subtle tricks on us. And so, I think part of the value in writing things down is, our past selves look stupider. And that’s actually very adaptive because we’re like, “Oh wait, we had these beliefs, and just, clearly these two are not true.” And I think, yeah, that robustness through time makes it easier to find our flaws.

– I was going to say, as a sociologist at a business school, I’ve talked to lots of CEOs. This is the first time someone has brought up Bruno Latour in a response to a question. So very impressive.

– Yeah. I’m going to skip around here ’cause we want to get to the audience questions. So actually, Sameer and I have a podcast because, like, who doesn’t? And our second episode just dropped today, and it’s about… CEOs have been, lots of managers have been asking us about work schedules and remote work and hybrid work and what’s working. So since we don’t know the answer, we’re going to ask you. So I understand that Stripe’s remote workforce increased from about 20% pre-Covid to almost 40% now. Is that about right? Yeah. So I mean, how has this influenced the company? What differences do you notice? Is it what you’re expecting for the long term?

– Well, I think the right answer is probably quite scale dependent and like, with Stripe now being 7,000 or 8,000 people, we can’t all fit in the same room regardless, no matter how draconian our in-office policy, right? And furthermore, we serve businesses and employ people all around the world. And so, we’re necessarily somewhat remote in that sense. Like, there is no universe in which we’re not having lots of Zoom meetings, just because of the globally distributed nature. And then, so the question is more something around the exact nature of the interactions we want people to have in the course of their day, but not, again, whether they’re conducting a lot of work that is distant from their colleagues. And so, I think for a large organization for whom that’s the case, there are considerable benefits to in-person work, just for boring reasons… I mean, everyone, this becomes such a religious debate, but I think there’s… A bunch of the kind of precepts are, I think, fairly uncontroversial. Like, there are some people who are really effective and really enjoy working in their cave. I think I would probably be one of those people, and sadly, I’m not in a role where that makes sense. But some people are, and that’s great. Other people, they get really bored, and they go, they get cabin fever, and they really want to be around other people. And just like, those people exist as well. And society probably has some mechanism for the provision of employment for both categories. It’s probably a significant efficiency gain to have more options for the kind of, the cave dwellers, the people who just want to sort of sit in the room and do the work by themselves. Again, like me. And then I think there… You have to think about it kind of longitudinally, where there’s a question of skill and culture and knowledge transmission. And so, I think some of the analyses that look at kind of short-term efficacy, they… I mean, that’s interesting, but I think you have to take… Ideally, you have to take a kind of a full life cycle view. And I think that sort of the cohorted change over a workforce. And Berkeley has a pretty strong culture, as I understand it. And they’re like, if Berkeley went remote, maybe Berkeley would be fine like next week or next month. But the idea of like four, 20 generations of Berkeley students being remote, I have to think that culture would at least be different, right? So yeah, I think all those considerations apply, but maybe relevantly for this room, I don’t know, I do notice that the 10-person, the 20-person, the 50-person companies, for whom being in room together is an option, the ones that exercise that option really seem to do better. And I think we all even intuitively kind of know it, where… I often ask parents, like, if your kid was considering two different jobs, one is kind of fully in person, resolutely five days a week, and one is kind of loosey goosey or fully remote or something, which, with your kid’s best interest in mind, which would you advise them to take? And no parent that I’ve asked has ever hesitated in answering that question.

– That’s right. OK, so, yeah.

– So I have the honor of doing the audience questions as well as my own. So—

– Austin, you want to introduce yourself?

– Sure, yeah. So I’m Austin Schoff, I’m a second-year MBA, I’m also a member of the Dean’s Speaker Series board. I think the first question we want to start with is the future of money movement. What do you think will happen? Will it be more real-time payments? Will it be more crypto type transactions? Will it still be T+2, and we’ll be stuck using Swift for eternity? What do you think is the future of money transactions and money movement?

– I think the short answer to your question, like, to each specific sub-question you asked, I think the answer to each one is yes, except maybe the T+2. But so, first off, the U.S. is actually one of the places in which payments are changing the slowest, where across most other… Not most. Many other major markets around the world, there’s been enormous changes over the last 10 years or so. So obviously, UPI in India. Everyone knows WePay and Alipay in China. But those are kind of famous ones. But like, Pix was launched in Brazil in 2020, and within two years, the majority of the Brazilian adult population was a weekly active user on Pix. It’s kind of UPI for Brazil. There’s Swish and TWINT in Sweden and Switzerland, respectively. And a whole host of schemes like this across in… Malaysia has its own. Japan is now finally starting to change pretty rapidly. So it’s happening, is the short answer. The Ron Paul GIF. And then, crypto, I think that… I mean, there’s kind of a fundamental question for crypto, like, these different lenses of analysis of store of value or some kind of risk hedge or kind of are talking like a means of exchange. But as a means of exchange, I think you should probably further disaggregate between stable coins and like, crypto crypto. I think the stable coin thing is happening, and the absolute numbers are sold reasonably small, but not that small. I think the outstanding tether volume is now, like, in the order of a $100 billion or so, like, it’s not nothing. And then, given the existence of stable coins, it’s not totally clear to me why you would ever use Bitcoin or some other kind of less convenient currency for a medium exchange. And Swift will still be a useful technology for interbank settlement, as it was initially designed. Or forfeiture was initially designed. And T+2, it’ll probably shrink, but you do have to… I mean it’s interesting to look at with FedNow in the U.S., this kind of new real-time payment scheme in the U.S. that has only kind of partially rolled out support, but we’re already starting to see that having instantaneous transactions… What about scams? What about fraud? What kind of oversight is possible? So it’s not a totally free lunch. And Bitcoin, of course, acolytes not unjustly, because for certain use cases this is important, but they often celebrate the fact that transactions are instant and irreversible. We also see some of the downsides of that with respect to other activities. But it’s all happening.

– Next question I want to hit on, how do you deliver constructive feedback while maintaining trust, especially given that a mistake in your organization could be the loss of a couple billion dollars depending on scale?

– I think people really want to… I think they really want to know what is… What is their interlocutor’s authentic view of them? And I think loss of trust doesn’t come from constructive feedback but comes from a divergence between what’s true and what you’re saying is true. And so, I would almost kind of invert it where it’s like, well, if you’ve constructive feedback and you’re not telling them, I think you’re really undermining trust. And, look, this is… I don’t know if it’s possible to teach giving good feedback. I haven’t heard of it being taught well anywhere. Maybe it is, I’m not saying it’s not. But I think it would be a very valuable skill to teach if, in fact, it can be taught well, and some of the people at Stripe… There’s, in fact, I think, even a causal relationship, a causal positive relationship, where the people at Stripe with whom I feel the greatest trust are, to a significant extent, those who give me the most critical feedback. And maybe just even kind of knowing… Like, maybe that fact should just be like on a billboard. Not about me, but just that these things, in fact, can go together.

– Could you talk a little bit about Stripe Climate and how we should think about your commitment to carbon removal as part of Stripe’s long-term goals?

– Yeah, so… If you look at the IPCC forecasts of what’s going to happen to the Earth’s climate over the course of the 21st century, basically, we’re going to significantly overshoot any reasonable target. Two, two and a half degrees, whatever. Unless we remove a significant amount of CO2 from the atmosphere, because the problem where, even if we fully decarbonize the economy, all the CO2 molecules, they don’t know about that. Like, they’re still there. And so, there’s this kind of overshoot and overhang, and we were looking at these IPCC reports a few years ago, and all companies are sort of announcing their sort of fancy climate whatever. And many of those are good and come from a good place, but not all of them are, and a lot of companies are pursuing kind of carbon offsets that we think are… Like, are just fundamentally kind of, almost necessarily fraudulent. Like, I think they’re fraudulent, they almost couldn’t not be, even if you were trying, where you’re kind of paying for counterfactuals and you’re like, “OK, well, I will not cut down this forest, please pay me.” But it’s like, were, are you going to cut down that forest? Like, how could anyone even know that, right? So anyway, we’re reflecting on those IPCC reports, and then kind of thinking about corporate programs in the context of climate generally. And I mean, because of this kind of precision rigor thing, we hate doing something that’s… Inauthentic is not quite the right word, but, if we say something, we want it to be literally true. And doing something kind of just for show really kind of rubs us the wrong way. So anyway, we noticed that no company in the world as of 2018 had ever purchased commercial carbon removal. So removal is totally different to offsets. Removal is like, I will give someone some money, and they’re going to have to bring back some actual CO2 molecules. But there’s this kind of, this proof of work involved, and more importantly, the molecules are no longer in the atmosphere. So no company had bought from any of these companies today. There were, or back then, there were, I think, only two companies even in operation. We thought, “Well, this will have to become a sector.” Again, the IPCC reports show you that. Like, they say we’re only not screwed if we remove a lot of CO2. And so, we thought maybe it’ll be helpful if we kind of… I mean it’s not like Stripe is Microsoft or IBM or something. Like, we’re not the most blue chip, legitimate, or legitimizing buyer you could have, but we’re something at least, and so, maybe it’d be helpful to these companies if we started to purchase from them. So we started to buy from them in 2018. Our first transaction was for $1 million of CO2. And kind of based on that, and learning more about the sector, we were very fortunate to have some really terrific people join. And they cooked up this really incredible AMC, the second-ever large-scale AMC. So AMC stands for advanced [market] commitment. And the idea is, you pre-commit to purchase something, something that doesn’t currently exist, as this was first pioneered for vaccines where there are all sorts of conditions we want to vaccinate people for, but like, the vaccines literally don’t exist. Of course, the vaccine manufacturer, the scientists or whatever, there’s market risk for them where it’s like, well, if I invent it, will anyone buy it? And so, this is a way to try to kind of bridge that gap. Worked quite successfully there. Gavi was the program. And so, we decided, “Hey, let’s do the same thing for carbon removal, where we want more of these companies to exist. We’ll pre-commit upfront to purchase $1 billion of carbon removal, at any price, from whoever will come along and sell it to us.” And so, we assembled a coalition that includes Meta, Alphabet, McKinsey, JPMorgan, a host of other companies, but Stripe committed the largest amount to it. And gosh, we’ve now, I think, purchased from on the order of 40 companies or so. And the stat that I’m proudest of is that, in most cases, we are the company’s first-ever customer. And so, we’re not like coming along to somebody who, we’re their thousandth customer, it’s already validated. Kind of, we’re through frontier, this organization kind of sticking our reputation on, “Hey, we think this technology is legitimate, we think it has promise, we’re going to contract with you today, and hopefully you can now use that contract to sell to others, and so forth.” So anyway, it’s early days. Most of the CO2 is still in the atmosphere, so it would be premature to declare any kind of victory. But some of the companies are now actually removing it, and yeah, we’ll see how it goes.

– How do you think technologies like Stripe can help businesses in developing markets, maybe even in places where internet connectivity is not as strong as it could be? What do you think the future is for the developing world?

– I think the… Well, I think the internet access problem is pretty quickly being solved, in that… Like, over Thanksgiving, I went to Brazil, and I was on a little boat on the Amazon, and I had perfect 3G reception. Across most… Like, India thanks to Reliance Jio, data is becoming super cheap in the most populous country in the world. And there’s kind of versions of this story playing out in so many places. So I don’t worry too much about the provision of internet problem. I think the… Look, I think the internet is… Is one of the most important technologies ever created with respect to the enablement of global development. And so, I was born in Ireland in 1988, and when my parents who were born in Ireland, Ireland was a kind of, was a deeply impoverished theocracy, and the Catholic Church kind of ruled with an iron fist, and we were a very kind of mercantilist socialist, closed little enclave. And there was a great deal of interest in sort of, how could Ireland be the… How could things in Ireland be working so badly? We’re right there next to England, why is Ireland so bad? And it turns out that it was bad policy. And some enlightened people like T.K. Whitaker and others, they proposed that, “hey, if we reformed and reconfigured ourselves in a kind of more free market direction, that good things could follow. And there was some propitious timing, where the EU came along, and we joined it, and American multinationals set up operations in Ireland. We benefited from that and so forth. But hey, point is, between when I was born in ’88 and when I left for college in 2006, Ireland had, I think, the fastest economic growth of any country in the world. And you can’t grow up around that and kind of fail to internalize the, like, the moral importance of economic growth. And it’s kind of avant garde, here in the U.S., the Bay Area, rich places, just sort of degrowth and the ills of capitalism, whatever. And for places that are already extraordinarily prosperous, I understand how it might be difficult to perceive the underlying imperative there. But having kind of seen some of the kind of… The longitudinal difference, it’s… And I’m sure many of you have kind of versions of this from your lives. The criticality is very apparent. And so, anyway, Stripe’s mission is to grow the GDP of the internet. And we think about this a lot with respect to those emerging markets where… There’s only one technology that we’ve ever found to enable impoverished places to become, or at least to get on the trajectory to kind of full developed world status. And that is a free market economy connected and integrated with the rest of the world. And Stripe’s obviously not going to solve that, but if we can play a very small role in enabling those transitions, we’ll feel good about that.

– Amazing.

– Fantastic. Are you done?

– We have one final question.

– OK, one final.

– Are there any founders that you strive to emulate? And then, conversely, are there any founders who give you the ick?

– We won’t tell.

– It’s not recorded or anything.

– Exactly, not being livestreamed. So… Look, it’s hard to single out individual founders. I think that, I mean, which, look, it’s kind of a bland answer, but also true. I mean, I’m kind of partial to… I mean, we culturally know a lot about the present day founders, right? I think it’s kind of interesting that the founders of kind of generations past, and like, not that many generations past, are so much less culturally conspicuous. And so, sorry, this is now going to become an infomercial, but there’s a book Stripe Press published called “The Big Score” about the semiconductor industry, primarily in Silicon Valley, in the ’70s and the ’80s. And those characters and firms like National Semiconductor, and so on, they’re kind of forgotten today. But they were incredibly impressive. Or Cypress, these sorts of businesses. And so, I found it fun to learn from them and to see kind of what’s similar, what’s different. And then, I don’t know, I really enjoy kind of founder-like personalities from non-startup domains, and just kind of, again, both the sort of the compare and the contrast. And so, a guy who really inspired me growing up was Ed Walsh, who started the University of Limerick when he was 31. And nobody… Limerick is a very small city in Ireland, and nobody at the time really thought that Limerick even deserved a university. And he couldn’t persuade anyone to kind of let Limerick have a university from Day One. And so, it was a national institute of higher education. My dad was actually in the first year of students there. But then, eventually acquired kind of full university status. But like, I don’t know, he was a 31-year-old, who before that was living in the U.S. and decided like, screw it, I think Limerick should have a university. And over the course of several decades, really realized that vision in an extraordinarily impressive way. So, I don’t, I like finding those personalities from the nontechnology domain.

– Yeah. Well, thank you Austin. Those were terrific questions. Patrick, a whirlwind of insight and things… Yeah. Citations—

– That was so disorganized that I’m having trouble even summarizing it.

– No, no, no. Well, you began with Ireland, and you ended with Ireland. I think it’s completely appropriate. We are so grateful for coming to share your thinking. We hope you will come again sometime soon. But let’s offer Patrick our deepest thanks for coming out.

– Thank you very much.

– Fantastic. And thank you all for coming. We really appreciate you attending. We hope you got a good lunch and lots of mushrooms, I think. We’ll see you again soon. Thanks everybody.

– Thank you. Of course, that was fun.

– Yeah, that was amazing. That was so fun.

UC LAUNCH Demo Day founders pitch innovative startups

large group of students, some holding large checks at a competition.
The 2024 LAUNCH Demo Day participants. Photo: Jim Block

Startup founders at UC LAUNCH Demo Day last week pitched ideas ranging from improving package delivery to crafting better athletic supplements to expediting the building permit process. 

Each year, 20 startups from across the UC system are are chosen from more than 100 applicants. The chosen startups founders are paired with entrepreneurs and mentors, and led through an intense three-month Lean Startup-focused curriculum. 

The program finishes with Demo Day, when teams pitch to judges for cash prizes in front of an audience. This years Demo Day judges included Noah Doyle, managing director of Javelin Venture Partners, Hina Dixit, a partner with M12, Kira Noodleman, a partner at Bee Partners, and David Bloom, a principal at the House Fund.

The top three teams that pitched on Demo Day:

First place: Doorstep AI:  The startup, cofounded by Rishabh Goel, BS/BA 22, (a graduate of the concurrent Robinson Life Science, Business, and Entrepreneurship program/business program), is working to simplify the last 500 feet of package delivery/pickup—particularly deliveries to apartments and multiple tenant dwellings. Doorstep AI,  which offers a visual guidance system to aid in package drop-offs, is kicking off a pilot in New York City.

man standing on stage holding a microphone
Rishabh Goel, BS/BA 22, pitches startup Photo: Jim Block

Second place: OptiGenix: The startup offers biologically tailored supplements for athletes; the two founders—Jai Williams, BS 23, a high jumper, and Gabe Abbes, BS 24, a distance runner—discovered that they were taking the same supplements, though their sports demanded different kinds of strength: Williams needed more power, while Abbes required prolonged energy.  Through genetic and quarterly blood testing, the startup aims to personalize supplement packages to help athletes meet their goals. 

two students holding microphones on stage
Jai Williams, BS 23, a high jumper, and Gabe Abbes, BS 24, a distance runner, presenting at LAUNCH. Photo: Jim Block

Third place: Citmit (UC San Diego & UC Berkeley founders) Citmit is working to expedite the building permitting process by up to six months, using AI tools to evaluate/accelerate documentation checks. The San Diego based startup is initially focused on accessory dwelling units (ADUs) such as mother-in-law units and cottages, as those are the most in-demand/problematic. Driven by its AI component, Citmit operates as a user-friendly chat box.

New collaboration lets business and journalism students take classes across disciplines

UC Berkeley’s Graduate School of Journalism and the Haas School of Business—with support from Bloomberg News—have launched an initiative to enable journalism and business students to take classes across the two disciplines. The schools are pursuing a formal joint certificate in Business Journalism, with the goal of strengthening reporting in a field that is multifaceted, complex, and pertinent to everyday lives.

“All stories are business stories — whether you’re covering city hall, labor, the environment or education,” said Berkeley Journalism Dean Geeta Anand. “We’re teaching students how to hold power accountable and usually power lies where the money rests — in the corporations that dominate our country. We are diversifying the storytellers and giving them the tools they need to cover business responsibly, knowledgeably and robustly.”

Dean Ann E. Harrison, Anand’s counterpart at Berkeley Haas, emphasized the benefits of crossing disciplines. “In order to cover business, journalists need to understand how business operates and how money moves through the economy. And business leaders can benefit from having a deeper understanding of the media,” Harrison said. “This is a win-win for students at both schools.”

man wearing a suit teaching in a classroom
Bloomberg Senior Executive Editor Tom Giles teaches “Covering Silicon Valley.”

The Berkeley initiative kicked off with a class taught by Bloomberg Global Technology senior executive editor Tom Giles on “Covering Silicon Valley” in collaboration with Bloomberg News. The class seeks to provide a “foundation for reporting on a broad range of business topics, from IPOs and market swings to employment gains and trade flows,” emphasizing the Bay Area’s tech industry and players.

“Understanding how money is used to build businesses, create jobs, amass wealth and, too often, widen inequality has never been more urgent,” Giles said. “Our aim is to give journalists the tools they need to follow money, expose the misuse of it, and tell the story of capitalism clearly, unflinchingly and compellingly.”

Berkeley students are the first in the nation to use the just-released Bloomberg Guide to Business Journalism, which provides students and professionals with the essential tools for reporting on companies, industries, financial markets, economies, banks and government policies anywhere in the world. The book illustrates how to chronicle capitalism for different audiences — from general consumers of business news to market specialists — and how to present compelling stories across print, web, video, and audio formats.

Friends with health benefits: How the buddy system pays off when pursuing goals

Two women wearing leggings sit on the floor of a gym stretching.
Image: AdobeStock

Weekly targets, annual resolutions, five-year plans—all of them so troublingly elusive. With best intentions, most of us fail to stick with the goals we set.

Next time, consider pursuing them with a friend.

New field research by Assistant Professor Rachel Gershon, published in Management Science, suggests that pursuing our goals with friends may make them more attainable. Gershon, along with Cynthia Cryder of Washington University and Katy Milkman of the University of Pennsylvania, specifically looked at gym attendance and found that going with a friend—even with the hurdles of coordinating two schedules—increased visits by 35%.

“Despite adding the friction of working with another person, we saw people becoming more motivated and more likely to go,” Gershon says. “This illuminates how social incentives, which aren’t always taken into consideration, can help people overcome other barriers that stand in their way.”

The experiment recruited two groups of participants for a “Gym Bonus Month,” which lasted four weeks, from February 1 to February 28. Both groups paired up with a friend and were offered a $1 Amazon gift card for each visit to the gym. One group received this bonus every time they went to the gym, regardless of their friend’s activity; the other group only received the dollar if the two of them went together.

As noted, those who received payment only when they visited the gym with their friends doubled how often they went together, and increased their overall gym visits by 35%. Gershon and her colleagues concluded that the logistical costs of coordinating with someone else were eclipsed by two benefits. First, people enjoyed their visits more when the event was social, which made future visits more likely. Second, they felt a greater sense of accountability when meeting their friend at the gym.

“Our study identifies two types of accountability,” Gershon says. “People feel responsible to their friends, as they wanted them to get the reward, but they may also have reputational concerns that their friends would think less of them if they didn’t follow through.”

Social benefits

Although this might seem intuitive, when Gershon and her colleagues surveyed people about which of the two conditions they would prefer to be part of, the majority—more than 80%—said they would rather not have to coordinate their visits with a friend. While unsurprising in some ways, Gershon says, this suggests that people might readily see the drawbacks of coordinated visits but not recognize the potential benefits, from increasing motivation to creating stronger social bonds.

The researchers also found evidence that, when looking across both partners in a pair, this social attendance of the gym seemed to provide the greatest benefit for those who exercised less. Specifically, among the two friends, the one who exercised more frequently prior to the study saw a bump in how often he or she visited the gym. But the partner who exercised less frequently prior to the study saw an even larger bump in visits, suggesting these kinds of social incentives may be especially effective for distinct groups of people.

Beyond the context of this experiment, the findings illustrate how building a social dimension into desired behaviors can promote follow-through. Companies that want to increase employee engagement with skills training, for instance, might consider using a joint-incentive program. This could boost participation while simultaneously fortifying interpersonal bonds in the workplace.

The findings also present implications for another area that Gershon studies: referrals. Many places offer a free month of membership or some other incentive if you recruit a friend. “There are all sorts of contexts where people are trying to start a new hobby, a new exercise routine, and companies can encourage them through social networks,” she says. “This work shows that referrals may be a way for companies to not only engage additional customers, but to also increase the motivation of current customers.”

The paper:

Friends with Health Benefits: A Field Experiment
Rachel Gershon, Cynthia Cryder, and Katherine L. Milkman
Management Science, April 2024

Dean’s Speaker Series: PG&E CEO Patti Poppe on ‘her hardest job yet’

three women on a panel with large screen behind them
(left to right) Dean Ann Harrison with Madhu Gupta and Paolo Gutierrez, both MBA 24, and Patti Poppe, CEO of PG&E. Photo: Katelyn Tucker

Patti Poppe, current CEO of PG&E and the first female chief executive to have moved from one Fortune 500 company to another, shared her extensive career journey at a recent Dean’s Speaker Series talk. 

Long before she was leading California’s largest energy corporation to reduce its wildfire risk, Poppe got her start in engineering and production planning at General Motors. After 15 years of traveling around the world to learn various manufacturing techniques, she made the transition to energy by taking a job at DTE Energy in Michigan. From there, she went on to work in operations at CMS Energy, where she became the company’s first female CEO in 2016. 

(Watch the DSS interview with Patti Poppe)

Poppe shared that, for a large portion of her career, she never imagined being a CEO. Having taken on challenging roles and working hands-on in the energy field as a front line supervisor, she was originally set on being a plant manager. In fact, it wasn’t until her own supervisor told her that she needed to aim “bigger” that she considered pursuing a career as an executive. 

“I often say there’s two kinds of careers. There’s one that’s like a destination in mind, and there’s one that’s full of interesting assignments,” Poppe said. “Imagine a soccer field, and you have the goals on one end. You’re here at this goal, and you want to get to that goal. If you’re really clear about what that goal is, and if it’s CEO of a Fortune 500 company, the shortest path is a straight line. But it rules out a lot of interesting assignments because, as I was coming up the ranks, I needed to do very important things to prepare me to compete to be the CEO.” 

She noted that this direct experience in the industry has been crucial for her to not only be able to lead successfully but gain credibility and trust among teams. But even with all of her industry and leadership experience, Poppe described PG&E as her hardest job yet.

Taking over as CEO amid PG&E’s 2021 crisis following the Dixie Fire, Poppe was faced with the challenge of rebuilding employee and customer trust in the face of negative press and feedback. By employing her own philosophy of “leading with love,” she emphasized community and invested in the workers who had stayed with the company through its darkest times. 

“The team had been under a tremendous stress…and needed healing, so I knew love was an essential ingredient,” Poppe said. “A utility is a uniquely human kind of company. People often say we’re an engineering company or an energy company. I say we’re a people company, we are people serving people.”

With love as the “essential ingredient,” Poppe adapted a tool she learned while working in the automotive industry: lean manufacturing. She has since made this methodology—which brings visibility to company problems and helps individuals take ownership of their work—to her playbook to improve PG&E’s safety and efficiency. In the face of climate change, she noted that the company’s current goals are to invest in infrastructure that will be able to withstand future conditions, in addition to lowering energy costs for customers. 

Poppe was interviewed by MBA students Paolo Gutierrez and Madhu Gupta, both MBA 24.

Read the full transcript: 

– [Dean Ann Harrison] Good afternoon, everyone. I’m Ann Harrison. I’m the dean at the Haas School of Business. Welcome to this afternoon’s Dean’s Speaker Series. We are so fortunate today to have Patti Poppe join us. She is one of 52 women Fortune 500 CEOs. This is just so incredibly exciting. Patti began her career by using her engineering degree in production planning and engineering roles at General Motors. As she rose through the ranks at General Motors, she adopted her philosophy of lean management influenced by her time on the company’s global task team, where she traveled around the world to learn lean manufacturing techniques. She started working in energy in 2005, starting at DTE Energy in Michigan, and then she became the first female CEO of CMS Energy Corporation, which supplies electricity and gas to nearly 70% of Michigan’s residents. By the way, I had this incredible opportunity to hear her speak yesterday at a rival school called, I think it’s called Stanford. Yeah. And she told us that she feels much more comfortable in a hard hat than she does in a business suit, which is hard to believe. But she was really amazing talking about being out there in the field. So Michigan, 70% of the residents. As I was saying, through all these roles, Patti developed a track record of supporting renewable energy development and implementing a strong safety culture. It should come as no surprise that, after all this foresight and determination, that led to her appointment as CEO of PG&E—after PG&E had had all those incredible crises in 2021, she was brought in. Incredible story. Patti’s current company goals are to strengthen trust in PG&E by improving safety and embracing technology to put the company on a course toward cleaner energy. I was delighted to learn yesterday that Patti has her very own defining leadership principle, leading with love, and I’m sure she’ll talk about that today. Thank you so much, Patti, for taking the time out of your incredibly busy schedule to come and speak with our students today. Some quick housekeeping before we start: You should all have a note card on your seat. If you have a question now or anytime during the event, please write the question on the card. Please be sure to include your name and the program you’re in, and my colleagues will collect them for the Q&A portion of the fireside chat. So I’m now going to turn over today’s Q&A to Paolo Gutierrez and Madhu Gupta, and they will moderate today’s discussion. Thank you so much.

– [Interviewer] Hello, everyone. Thank you so much for being here, and thank you Patti for joining us today. We were just talking to Patti in the back, and she is so much fun. So we’re going to have a great, great hour with her. We want to start the conversation today talking a little bit about your journey, which Dean Ann Harrison just talked about. So you had a fun and fulfilling career in the automotive industry when you were working for GM, and then you decided to go into the energy industry. What prompted you to make that change, and how did you align that with your passion and your interests?

– [Patti Poppe] It’s a great question. I wish I had this really sophisticated answer to give to you, but I would say, and my husband by the way, and my mother-in-law is here. The original Pat Poppe is here. I have the privilege of having the same name as my mother-in-law and my husband, Eric. And just one other introduction, Laurae Campbell is here, who is a Cal grad, so give it up for Cal in my office every day. But my husband and I both worked for GM, and he still does, actually. But at that time, we had been moving around a lot, and we were about to move to Korea, and I had a friend of mine who had left GM and went to DTE Energy, and he just asked me if I would think about DTE, and I didn’t even know what they did. I was like, “What do they do? No, I’m moving to Korea.” Next thing we know, I got a job offer from DTE, and it gave us an opportunity to… We were moving around a lot, and we had young children. We had two daughters who were in, I guess third grade, and we decided to take a decision for the family and moved back to Michigan and plant what we thought were permanent roots there. Life unfolds in different ways. We didn’t know, at the time, that that was going to be such a consequential decision in our lives, but it was truly made for family at the time. And then, it turned out to be a great professional move, and I can’t imagine not having made that decision back then.

– [Interviewer] So many of us here are graduating in about a month, which is really sad. And with that comes big career pivots. So were there moments in your transition where you were questioned, or maybe you were questioning yourself? And how did you navigate those situations and kind of building that credibility in winning over others’ trust?

– [Patti] So many times, so many times. But I do think that, and this is a really important thing as you embark on your careers and continue your careers to really be able to find it in yourself to believe in yourself. And I remember this moment, my first day in an assembly plant. These are big factories. And here I was, this girl with a ponytail and my blue jeans. And walking down the aisle, I didn’t know where I was or what I was doing. And these guys pulled up in this golf cart and they said to me, “What are you doing here?” And I was like, now just freeze-frame for a moment. Like, in my mind I’m thinking, “I have no idea. Like how do I get to column number B80?” I had no idea what I was doing, but if I had said that, I mean, I would’ve lost all respect from these people. So instead, out of nowhere, I blame it on my high school math teacher. I feel like she infused me with confidence. And so, I just look at these guys, and I said, “I got a job to do. Don’t you have a job to do? Don’t you think we should get back to work?” And these guys go, “Oh, you want a ride?” I go, “Yes, I do. Can you please take me to B80?” And I just think about, like, don’t count yourself out. You walk in the room, every person in that room is wondering what they’re doing there. I can assure you, all of us have these questions about what’s happening. We don’t know as much as we pretend to do. And you just have to be honest with yourself, and it gives you permission, then, to actually admit when you don’t know and to ask for help and get support from people that you’re working with that do know more than you. No one’s going to expect you. They’re going to know you’re smart. I mean, you went to Cal, you went to Haas, they’re going to know you’re smart. But they’re going to expect you to want to learn more and learn from them. And so, one of the best ways to overcome not knowing is by being curious and learning from those that actually do know more than you do and let them teach you.

– [Interviewer] We were talking in the back how you’re one of two two-time female CEOs, which is amazing. But also, it means we have a lot of work to do. We’re curious to know, you went from a plant manager, you always loved working in the field, which is, it’s a tough place to be in. How did you kind of know that you were going to be in that CEO track, and then, that you wanted to be a CEO?

– [Patti] I was just thinking about this. There was a large part of my career I never would’ve imagined being a CEO. My singular focus was to be a plant manager. That was my dream. I had a great plant manager who I loved dearly, who made my life better because he was such a great leader, and I wanted to do the same for others. And so, all of a sudden, I was awfully close to that goal, and I was with one of our vice presidents, I remember, and he said, “Patti, what are your career goals?” And I said, “I want to be a plant manager.” And he said, “I have bad news for you.” I was like, “Oh, oh no, really?” He’s like, “You gotta think higher.” I was like, “Uh-oh, what do you mean?” I said, “I want to be a plant manager.” He’s like, “No, no, you’re too young. Like you’re going to be plant manager like in a year. You need a bigger goal.” And a blessing, at the time, I was in business school. And so, it gave me a time to reflect and imagine something beyond being a plant manager. And that was the first time I ever said out loud to anyone, like, “Maybe I’d like to be a CEO someday.” And I have to tell you, it’s really important at some juncture to get clear with yourself about what you do want from your career. Being a CEO is the most amazing job, but it comes with a lifestyle that you have to not think that you can skirt. I did really hard jobs to get prepared to do this very hard job. And so, being willing to make those choices, I often say there’s two kinds of careers. There’s one that’s like a destination in mind, and there’s one that’s full of interesting assignments. And I’ll just tell this real quick. When you have a destination in mind, it helps weed out choices. Somebody actually just said this today, and so, I’m going to use his story. Imagine a soccer field, and you have the goals on one end. You’re here at this goal, and you want to get to that goal. If you’re really clear about what that goal is, and if it’s CEO of a Fortune 500 company, the shortest path is a straight line. But it rules out a lot of interesting assignments because I needed to, as I was coming up the ranks, I needed to do very important things to prepare me to compete to be the CEO. Nobody ever promised me a CEO job, but to compete for that, and frankly, it happened sooner than we expected. The person I was succeeding got sick. And so, my HR person came to me and said, “You ready?” I was like, “Shouldn’t Dan do it?” He’s like, “No, you should do it, you do the job.” I wouldn’t say I knew I was ready, but I had prepared, and I had taken the tough assignments to get me prepared. But you can also have a very rewarding and fulfilling career doing interesting assignments. But it’s really important to know which you really want. And so, what I watch a lot of young people do, they make a mistake of choosing their own career paths and choosing these interesting assignments. And they may or not prepare you to compete for the job you really want. And if you all of a sudden find out you just spent the last 10 years doing stuff that isn’t getting you to where you want to go, you’ll be disappointed. So, doing interesting assignments, I had this friend Janet, who always had the most interesting jobs, but she got to this point in her career and she wanted to advance, and she didn’t have the requisite experiences, and she was disappointed. Now, if I might, my husband had no interest in being the big boss and managing a bunch of people. That was never his interest. He wanted to solve the toughest problems. And so, he always chose the roles that had the toughest problems, but that wasn’t necessarily going to lead him to be CEO of General Motors. He didn’t want that. And so, he was never disappointed with that choice. He was fulfilled by his choice of doing really interesting work all the time. I just don’t want you to make the mistake of thinking you’re on a destination path, but you’re actually setting yourself up for these kinds of interesting assignments. So my best advice on that is, study the people who have the job. If you have a destination in mind, first of all, be honest with yourself about that. Don’t apologize. Not everybody wants that job. If you are wired that you want that job, have that in mind. Then, study the people who have that job or similar jobs. and prepare like they did. Take the tough assignments, do those hard jobs that aren’t glamorous and aren’t going to get you on the cover of a magazine. They’re going to prepare you to compete for that top job that you’re really after.

– [Patti] Thank you. That’s really helpful advice for all of us graduating. I want to pivot a little bit to talking about PG&E. So you came to PG&E in 2021, and when you made that decision, you had the big task of fixing the company’s culture and operations. And in one of the interviews or speeches that I watched as I was preparing for this, you said that Larry Culp, the CEO of GE, called you the day after it was announced to say, you’re the only one with a harder job than me in America now. Which is—

– [Patti] That is a true story.

– [Interviewer] Very scary. Part of your strategy in tackling this challenge was bringing in the lean management methodologies and also your philosophy of leading with love. Why did you choose these two, and how did you get the stakeholders you coming in as a new CEO to believe in that and to take that culture and run with it?

– [Patti] Yeah, it’s such a great question. I remember thinking earlier in my career, I would look at these CEOs and wonder, “How do they know what to do?” And then I became one, I’m like, “Oh no, now I do actually need to know what to do.” But when I took the PG&E job, I did have the benefit of experience. And so, when I talk about preparing for these tough jobs, I had been the CEO of another utility. It happened to be a really wonderful utility that was performing very well but had had its own turnaround. And I had been present for it and actually led our customer trust transformation. We were lowest in customer satisfaction. And actually, in my time, we became No. 1, and I knew what that took, and I knew how to rebuild trust, and I had experienced really challenging turnarounds also at General Motors. And so, I actually knew what to do. And it’s a little uncharacteristic for me ’cause I consider myself a more participative leader. I like to engage the team in deciding the path. But we were in a crisis. We had just come out of bankruptcy. We literally had had four CEOs in the matter of a year. The team had been under a tremendous stress and catastrophe and needed healing. So I knew love was an essential ingredient. In business today, I think that’s too often we dehumanize it and turn work into a work-pay transactional relationship, and even companies as transactions, with our customers. A utility is a uniquely human kind of company. People often say we’re an engineering company or an energy company. I say we’re a people company, we are people serving people. The only difference between my utility and every other utility in America is the people who work there. We all have pipes and wires and customers. At PG&E, the only difference is the people who are there. And so, tapping into the human spirit of the people who work at PG&E and regaining their confidence in the face of a lot of negative press, a lot of negative feedback, people who had stayed at this company through our darkest days needed to believe in themselves and believe in what we were up to. So love was essential, but then let’s get some tools. Lean manufacturing is a wonderful system that I had deployed, I learned in automotive, but deployed in the utility for the 15 years or 20 years before I joined PG&E and had developed a playbook that worked to make problems visible, to bring out the best ideas, to help people own their work and their business. And we had a very important body of work to deploy. And that was our wildfire mitigation plan in 2021. We were still reeling from a series of significant fires and our bankruptcy, and an essential ingredient in the legal construct here in California is a wildfire mitigation plan. And so, I knew wildfire mitigation plan is the most important thing. And teaching lean, we can do those two things in the same way. So every time we went to the wildfire mitigation plan review, we were learning lean and doing the plan, doing the work, learning lean every time. In fact, I just had a meeting with my team today reminding us that every meeting we are in has two purposes: Number One, to teach our performance playbook; and Number Two, to do the work so that we can have a sustainable management system that teaches people at all parts of the company from the front to the back what it means to deliver excellence and improve our work every single day. And it’s working, I’m happy to report. We have reduced our wildfire risk by 94%. That is not a make-believe number. That is calculated by the risk exposure that we have. And the remaining 6% we’re improving every day and is backed up by our situational awareness, which includes, I have over 80 former firefighters who work for PG&E who help us mitigate our risk every day and respond when an ignition occurs. Cal Fire and the state of California have dramatically invested in their capabilities. We have 1,500 weather stations across our service area that’s from basically Oregon down to Santa Barbara and Bakersfield. Those weather stations have real-time data that communicates, we’ve divided the entire service area into 2-kilometer blocks. Real time, every minute of every day, we know the temperature, the wind speeds, the moisture levels. If there’s a tree in strike distance to the line, we know what color that tree is, we know how many feet it is from the line. We know the angle to the hill. We know the last time we inspected those. And we have a huge data engine that uses artificial intelligence to prevent the risk in every one of those 2-kilometer blocks. And we take operating measures and actions every single day, every hour of every day to make sure that an ignition, if it occurs, because electric equipment in fact does spark by design, we make sure that it’s not going to cause a catastrophic wildfire. That was delivered through our lean operating system.

– [Interviewer] That’s incredible.

– [Patti] Thank you from the PG&E plants in the audience.

– [Interviewer] So you are facing, day in and day out, the effects of climate change with wildfires, pressure on the grid. And as natural disasters continue to get worse, that’s putting pressure on your operations, which oftentimes means investing in better technology, better operations, safety management, and can lead to rise in prices. I think many of us here are going to be facing similar challenges as we grow in our careers and think about how do we make certain decisions. So how do you think about affordability in the utility sector while maintaining that commitment to investing in safety and sustainability? And how do you get the leaders in your company to follow your lead?

– [Patti] Well, first and foremost, it’s always about our customers, and we have to be willing to put our expertise to work, to make decisions on behalf of the people that we serve. And when we make a decision to make an investment, I’m going to make a pitch for the investor-owned utility model here for a minute. So if any of you have studied it or have questions about it, let me just tell you my perspective about this. The original formation of an investor-owned utility model was when we were building out this electric infrastructure for the first time because we were powering America and the world. And we needed to figure out how to get the most power to the most people at the lowest cost. And so, the investor-owned utility model emerged as a winning model because it spread the costs of the build out of that infrastructure over more people and more years by attracting capital from the capital markets and not expecting all customers to pay upfront for the build out of that infrastructure. And over time, as that investment and use of then, that product grew, the unit price declined. So in the original days we were building out infrastructure, and every year the unit price of electricity was going down. Well, now we’ve reached the stage that we have to replace that infrastructure for two reasons: its age, and two, our changing climate conditions. Our infrastructure was not designed to withstand the extreme drought, wind, floods, this is a worldwide problem. And so we have to, at this juncture in our nation, invest in that infrastructure, and then make it safe under future climate conditions, not today’s climate conditions, and all the while reducing carbon emissions so that we can thwart the speed and pace of climate change. Now, here’s the great news. A lot of people are worried about this. They think it’s just going to be too expensive. Well, one of the best things is the confluence of decarbonizing through electrification. While we are building out this new infrastructure, actually, we’ll grow load just like we did way back when growing load while we’re making these investments, thereby lowering the unit cost of energy as we go forward if we do it right. But annual expenses and maintenance, continuing to only do maintenance, it’s like owning a car. You can’t continue to Band-Aid the problem. There’s a point that you reach where it’s more expensive to continue trying to maintain the car than to invest in a new car payment to spread out the cost of that new car over time. It’s the same idea with our infrastructure of all kinds, bridges, roads, but particularly the electric grid. And the benefit the electric grid has is new demand. Electric vehicles, building electrification, decarbonizing our economy can in fact be done at a way that it lowers household spend on energy. Electricity is a more efficient fuel than gasoline, and we can then transition from natural gas to electrification. We’re going to be proving all this out here in California first. PG&E is at the heartbeat and the forefront of delivering this future and showing that it is possible. And thankfully, California is not going to get weak need about this. It’s going to be a major issue politically across the nation. And fortunately, California will stand our ground. And PG&E is essential to that clean energy transition, decarbonizing our economy at the lowest societal costs. And I could not be more excited to lead the team at PG&E to make that happen.

– [Interviewer] That’s incredibly helpful context, Patti. Thank you. Before we shift gears to talk about the future of energy, let’s discuss some of the challenges that PG&E is facing today. As we all know, decarbonization has been a major goal for PG&E. What is the biggest hurdle you see to achieving your goals, and how do you hope to combat these challenges?

– [Patti] That is a great question, too. I’d say there’s two big hurdles. One is our willingness to believe as a society that it’s possible. And that’s, again, why I’m excited about California. I think there’s a lot of people who want it to be true but don’t know the path. And we get to show the path, we get to show the world that it is in fact possible. And I had dinner just not too long ago with the Secretary of Energy, Jennifer Granholm, she and I go way back. It’s a very interesting twist of fate that she was governor of Michigan, and we passed really important energy legislation when she was there and I was at running a utility. And so, we go way back, but she and I were having this conversation that there’s a whole lot of people who talk about this subject, and there’s only a handful who are actually going to do something about it. PG&E gets to do something about it. You need us to do something about this. So my biggest concern is that people will back off, or get afraid, or it’ll become too politicized, and we won’t make the important investments in the infrastructure so that it’s possible. And then two, there’s going to be a lot of behavior change. We’re going to need everybody’s help to make this change. In fact, we’re mapping out our net-zero plans for the state and for when we get real and we’re like, “OK, what are we going to do to meet San Jose’s net-zero 2030 goal?” That’s a million people are going to have to have electric heat. How are we going to do that? That’s a big human behavior, actual challenge. We’re going to have to convince people that it’s in their best interest to switch fuels and to drive an electric car. And 2030, hello. Tik tok, that’s six years from now. So, all that to say, we have a lot of work to do, and so, do we—time is not on our side, but really I think when any great innovation happened and when we built this grid out in the first place, people had to have faith that building this infrastructure was going to be worth it. And I don’t know about you, but saving the planet feels like a pretty darn good reason to make a change. And so, we’re all in.

– [Interviewer] Absolutely. I couldn’t agree more. Now, like in any industry, utilities too needs to adapt their business model and their strategy to evolving customer preferences. And we are interested in how you are navigating such shifts. Specifically, what is your view on decentralized energy generation and microgrids, and what is the subsequent impact to your business model?

– [Patti] Yeah, well I think we have the benefit of the distributed energy resources that exist in our system, but we today are blind to them. And so, they are not optimized. Our energy system today is not optimized. We’ve got big bulk power and distribution equipment and transmission equipment that is designed for that big bulk model of delivering the highest volume at the lowest cost. It’s like the big Walmart of energy. The grid is just a big centralized system by design. Plugging in all the distributed resources has been done so far very much to the benefit of the individual at that premise. We now need to fully leverage the benefit of those distributed resources. And the only way to do that is by complementing them with storage, both bulk storage and localized storage. And if we can store that energy that’s produced, we have too much energy produced in the middle of the day today in California, it’s way more than we need. And so, adding more generation capacity at noon is a waste of money. We need to add storage resources. If we’re going to invest in something when we look at the system as a whole, invest in the storage resources so you can store that energy at noon and then start to spread out supply and demand and start managing demand for the first time ever. We didn’t have devices until now. The energy grid has been a demand taker just by definition. By definition, the grid that we’ve all lived with all our lives has been built for peak demand plus, say, 15%. We’re now at plus 22%. So peak plus 22. In California, it’s about five days a year that we come close to that peak. Every other day of the year, we have way more power, and the whole system is way bigger than it needs to be. We have the chance with increasing demand to more fully utilize those existing resources, actually optimize demand in the form of EVs. First dynamic load we’ve ever had. Air conditioning comes on when it’s hot, lights come on when it’s dark. There’s not a lot of choice to that. Refrigerators run all the time. Those are the three biggest users of electricity today. And then factories. Run when the factories run. We have the opportunity to charge cars at the right time and then discharge those cars on the peak. Today, on our roads in PG&E service area, we have 6,000 megawatts of capacity in the form of vehicles. That is three of my Diablo Canyon Power Plants of capacity driving around the roads today. If we could only turn that power around to the grid, they’re not designed for that today. But the newest EVs, the Ford Lightning, the Cadillac LYRIQ, some of the other Cadillac products, or the GM products coming out, are bidirectional. That’s going to be both a supply and a demand on the grid, but we’re going to have to optimize all those resources and optimize the grid. And I just think that’s going to take the most innovation that this industry has seen in our lifetimes.

– [Interviewer] Thank you for sharing your perspective on this topic. Now, not so long ago you mentioned that PG&E is in the people business, and I loved that. So just to talk a little bit more about that, I think one of the bigger responsibilities we have today in the transition to clean energy is to make sure we bring everyone along. Now, of course, lower-income communities may not have the same access to programs, incentives, or resources perpetuating maybe energy poverty and environmental injustice. How do you as a leader, and PG&E as an organization, empower vulnerable populations and make sure they’re not left behind in this transition?

– [Patti] This is one of the things that we spend a lot of time on. Another pitch for the investor-owned utility model, our obligation to serve, which is the law is actually a privilege. It’s a privilege to serve and assure that no one is left behind. If we had, whether it’s small local companies that don’t have the scale or profit maximizing companies that are purely motivated for maximizing profits without an obligation and a privilege to serve, you can imagine that people would be left behind. So when we advocate for the right kind of pricing for distributed energy and specifically rooftop solar, when we are advocating for the right price, this is why we are doing that. I think, a lot of times, we get painted with a brush that we’re anti-solar, we are anti-solar, we are anti-no-one-left-behind. We are anti-cost shifts. Today, there’s a $34 a month cost shift from people who don’t have solar to people who do. So people who don’t have solar, most likely apartment dwellers, people who can’t afford the upfront cost to invest in distributed solar. They are getting left behind, and we are fighting hard to make sure that doesn’t happen. And the CPUC made an important proposed decision in the last week to add a flat rate to the bill to more accurately distribute the costs, not new costs, but the existing costs to people equally so that anybody who uses the grid should pay for the maintenance of the grid and pay their full freight. We would’ve argued that might have been more, should have been applied, but it’s a good starting point to try and get the cost allocated properly so that no one is left behind.

– [Interviewer] Thank you. It’s really encouraging to hear PG&E’s efforts toward a more fair and just transition. Looking ahead, of course the world overall is changing at such a rapid pace, and for businesses to tackle climate change effectively, it needs to be a concerted effort that requires collaboration. However, one might argue that the energy ecosystem is not set up for collaboration, starting with the fact that we have such a fragmented power grid. So I’m curious, Patti, how do you see collaboration between public, private, and cross-sector entities evolving as we continue to put pressure on our grid?

– [Patti] It is one of the most important ingredients. You’re completely right about that. When I knew I was coming out to PG&E and started imagining my time at PG&E, I was so excited about the access to the innovation and technology that exists here and the privilege to serve the Bay Area and Silicon Valley. I mean, any utility in America would be proud and excited to serve the customers that we get to serve. And so, I started engaging in the innovation ecosystem here. And I got very resounding feedback. And it was this, “Patti, PG&E is killing us death by pilot.” They would say, “Wait, how many pilots do we have to do?” Like, it’s crazy. We’re a little company, we can’t afford to do all these projects to prove ourselves. We don’t have the funding to do that, so we took a completely fresh look at how innovation can plug into our system. And what we realized is that often people have a solution, and they’re hunting for the problem as opposed to having a problem and finding the right solution. So we came at it to say, my team looked at our 10-year strategy and our clean energy plan, and they came up with 70 problem statements that defined the gap from where we are today to where we want to be in 10 years that we can’t solve by ourselves. And we held an innovation summit last year, and we invited the world to come help us solve these very specific 70 problem statements in a variety of areas. Wildfire was one, but 24/7 decarbonized energy was another one, how to transition the gas system was another area, full utilization of EVs. And so, we put out all these problem statements. Three thousand people joined us that day, which I was so stunned and excited. We limited the in-person to 300, and that filled up in like a day. And Elon Musk spoke at our event, which people really felt like that was the big news that he makes news everywhere he goes, which was fine with me ’cause we wanted to make news that day. But the real news, what actually happened that day that was so important in addition to all of these innovators getting access to PG&E and being able to realize, “Here are the problems that need to be solved” and matching their technologies, their ideas to the problems that we had, we made an announcement with Schneider Electric and Microsoft that we were launching the first distributed energy resource management system on the cloud with these incredible technical partners and would be the first company in the world to be able to optimize all these distributed resources. That was actually the news that mattered that day. And since then, we had 300 submissions and 60 finalists, and we’re narrowing down to 50 to figure out how to partner with each of these technologies that are ready to scale. And we’re not going to invest in the companies, but we’re going to be their No. 1 customer, which every startup needs both. They need seed capital, but then, they need a great customer. And so, it’s a really great role for PG&E to play.

– [Interviewer] Awesome, thank you. And now, as our final question. Given the context in which we’re living in with the shift toward sustainable energy systems, the need for resilience in the face of climate change, and of course, the imperative to address equity along the process. I’m sure you see both innovation and setbacks on a daily basis. So with that, what keeps you up at night? What keeps you going, and what are you most excited about as you think about the future?

– [Patti] Well, there’s no doubt safety is what keeps me up at night, the safety of my workforce, and the safety of the communities that we serve. And so, we put a lot of effort around that. And I think about it all the time, and we have systems that have dramatically improved the safety. But of course, I think about it all the time. What was the second one?

– [Interviewer] What keeps you going?

– [Patti] Oh yeah, what keeps me going? Oh, the people of PG&E that I have the privilege of working with and the customers that we serve. I mean, I just love what we’re doing. We know that we are changing and changing that culture and leading with love has been such a galvanizing force for us. And it’s been just a real challenge, but a lot of fun. And then, I’m excited about being able to deliver on this clean energy transition for the world. I truly believe that we are at ground zero here in the Bay Area in California to show the world that it is possible. And there’s a lot of people who have been working at it for a long time, and maybe they’re getting tired, and there’s a lot of opposition that’s drumming up, and we just can’t lose our faith. And I am thrilled to be able to be at the place where we’re going to do something about the world’s existential challenge.

– [Interviewer] Thank you so much.

– [Ann] Thank you so much, Patti. Thank you so much also for being willing to take questions from the audience. So the first question that I have here is, “What sacrifices have you had to make in your personal life? Do you ever question or wonder if prioritizing your career is worth it?”

– [Patti] So I get this question often in a variety of forms. I’m not going to let my husband answer it, by the way, but I will give you my version of the answer. And we were talking about this in the green room a little bit. I subscribe to a Japanese philosophy called Ikigai, and if you haven’t seen it, study it, because I wish I had studied it in my early days. But yeah, I’ve made choices in my career that have been very demanding on my time. But the four elements of Ikigai is, first, you obviously want to do work that you can sustain your family. So you want to get paid for that work. I think a lot of people, and especially many of you at this juncture in your life and in your career, please don’t stop at the place that pays you the most. You will surely miss by just focusing on getting paid for what you do. You want to get paid for what you do, but it doesn’t matter whether it’s the most, what you want to combine it with are three other elements. So yes, get paid for what you do, but do something that you’re good at. Do something you love, and those two things might not be the same. You can often be really good at something, and maybe you don’t love it, but that will parlay into and open doors for you to do what you love, and then do something that the world needs. And so, for me, I can look at my career in all my years. I was always doing something that I got paid for but that I was good at, and I learned new things and discovered new things. But I had the privilege of loving being in an operating environment, seeing the daily heartbeat, seeing what we could deliver, just really doing something important and knowing at the end of the day that we did it. And then, especially now at this point in my career, to do what the world needs means that my minutes at work and my minutes at home have full value all the time. I’m fulfilled in all my minutes. And what a blessing that is. And I would wish that for each and every one of you that you find your path, and it’s not going to be anybody else’s definition of that path for you, only, and you have to study yourself. What do you love? What do you do in your discretionary time when no one has asked you to do it? What kind of articles are you clipping? Which podcasts are you drawn to? Pay attention to that, know that about yourself, know what you love, bias your career choices to that which you love and that what you can be good at. And then, please promise me you’ll find something that the world needs, and you’ll throw yourself at it. You’re too smart and too talented to not make a difference in this world. And so, I really have high hopes that you, too, can live the blessing of a career that I have had that has not felt like a sacrifice but has felt like a continual opportunity to grow and learn and make a difference.

– [Ann] Thank you so much for that. Absolutely wonderful advice. This question, you mentioned a career of interesting assignments. Can you speak to some of your more interesting or assignments that may not have seemed so at the time?

– [Patti] Oh, that’s really good. Yeah, I can think of one in particular that comes to mind. First line supervisor. It was interesting, that’s for sure. I tell people it was the second-hardest job I’ve ever had. The job I have is the hardest job I’ve ever had. But second-hardest job was first line supervisor. And I had a career choice. I had an opportunity for a promotion, and a company car, and daylight hours, and all these things, get out of my boots and get into a suit, and maybe that would be good. And I had a boss who pulled me aside and said, “Patti, wait, wait, wait. You haven’t been a first line supervisor yet, and if you want to be a plant manager on that soccer field, you’ll have gone around a key experience.” And he said, “And someday you’ll be standing in front of a room full of people that you are leading, and they will know you didn’t do it. And you might get the job somehow, but you won’t be good at it.” Plant manager. I was like, “Oh, dang it.” So I turned down the company car, and I took the second shift trim shop supervisor job. It really sucked. But I learned so much about people, and about leading, and the union tricked me and all these things. I learned so much. And so, yes, it was very interesting, and no, there were moments I did not love that darn job. But I look back now, and it was a key pivot point. And so, don’t take the easy route. Take the tough jobs where you’re going to learn the core business that you’re in. Understand that whatever business you are in there is a core business about it. Building cars at General Motors was core business. And now, in a utility, having operational experience and understanding what it’s like to lead people, I just stood yesterday in front of a group of first line supervisors who had just graduated from a yearlong development program, and I could swap stories with them. Do you think that gives me credibility as their CEO to be able to talk shop with these guys? Yes, it does. And when I say guys, it was men and women, gender neutral there. But I think that, sometimes, you take the tough job on the pathway to a destination because you have to learn the business, and you need to know how it works and why it works on the ground floor, so you can lead it well.

– [Ann] Thank you for that. How do you handle the daily stress, the wildfires, the CPUC, the unions, the shareholders, the employees, the budget?

– [Patti] There is joy in the journey. No, I do have coping mechanisms. One of the things, this did happen, I was probably six months into this role, and the big difference about this role versus all the roles I had had before was truly the life and death aspects of it. And how, in the early days when I had just arrived here, how uncontrolled it felt, and the risk of another catastrophic wildfire was real. And it was scary. And I was about six months in, and I just was trying to come to terms with the, as I called it, the death and destruction of all of it. This isn’t like a normal quarterly earnings update CEO job. And it occurred to me, it was more military, and we have a four-star admiral on our board. And so, I thought, “Why hadn’t I called Mark?” So, I called Admiral Ferguson, and I said, “Mark, what am I supposed to do with this, all this destruction and risk?” And he said this, he said, “Oh, Patti darn it, I should have given you this talk earlier. I give it to all my young commanders.” I’m like, “Good, I’m not young, but please give me the talk.” So he gave me the talk, and the talk went like this. Two key elements. Number one, the standard is not perfection. He said, “do you know it is safer today because you are there. And because we were implementing this lean operating system and creating visibility to the key wildfire mitigation elements, and we were making progress every day and we had brought order.” I knew I had brought order to what felt like disorder. I knew it was better. It didn’t have to be perfect, it just had to be continually improving. That was a big relief. And then, he said, “Every great mission in history,” and he had studied all great military missions, and he had studied them all, he said, “had one key thread. They had a leader who refused to give up. You cannot give up. You will have setbacks, things will go wrong, bad things will happen.” And there are things that have happened on my watch that I would definitely wish had not happened. “But the standard is not perfection. The standard is progress, and you have to be tenacious, as we say, we cannot give up.” And I don’t know what it was about that talk, but it took the weight of the world off my shoulders. And he also said, he said, “In that environment, when you know you’re making a difference, and you don’t give up, that’s when real leaders thrive.” I thought, “OK, this is me thriving. I am thriving.” And I had to remind myself that I was thriving. And some days are harder to thrive than others, but you just have to believe that you matter, and I have to believe that we can do it.

– [Ann] Wow. Thank you so much. That’s great advice. So this question, and I think you already answered it, so you feel free to skip to the next one if you’d like. “How do you prepare PG&E for the massive infrastructure investments in the future while still delivering satisfactory returns to shareholders?”

– [Patti] Oh, I don’t think I’ve answered this. Let me answer this one because I think this is a really commonly misunderstood feature of investor-owned utilities. Our customers deserve better service. And again, like I said, we get to spread the cost of that service out over time by attracting capital from the markets. But one of the things I didn’t mention about our investors, who are the investors? Our investors, and investors in a utility, are not like high-rolling, fat cat profit-driving, maximum return investors. These are pension funds, teachers, firefighters, police. They turn over, they’re nest egg to a fidelity, or a J.P. Morgan, or whomever, American Funds, and they choose us to invest in, and then we shepherd their dollars by investing in this infrastructure and promising a reasonable return, not a maximum return. it’s a regulated return. We have oversight. People decide what is that return here California, we have formulas that determine what that return is. So there’s no shenanigans associated with it. It’s formulaic, and it’s designed on a reasonable return for the risk of investing in this infrastructure and doing the work. And it’s on a very actual small portion of the elements of a customer’s bill. Only about 10% of the bill is actually our profits. And so, that return to that investment community, those moms and pops, I am unapologetic about keeping our promise to those investors. They’ve entrusted to us their life savings. Of course, we’re going to provide a return that we promised, and at the same time, improve the service to our customers by making the right infrastructure investment choices and reducing the cost of doing that, improving our performance with our lean operating system and our performance management playbook. We reduced costs out of our business in a dramatic way. We’re starting to set ourselves apart from other utilities, and our ability to extract cost out of the system and accelerate our investment and make the system safer, faster. And so, there, for me, there’s no land where there’s a conflict between delivering for customers and delivering for investors or shareholders. The system is designed to deliver for both. It’s actually a unique place in the world where you can have win-win. And I find it very fascinating, there’s a lot of people who are trying to make this into a win-lose discussion. It’s not win-lose. I don’t have to pick one or the other. I can pick both every single day and know that we’re doing right by both.

– [Ann] Thank you so much for that. This is the last question. “Do you find that you have leveraged your non-PG&E and field experience as the CEO of PG&E and how have you done that?”

– [Patti] I think so because I love the work that we do, and I love being with our crews who do that work. And so, I love going out to our power plants, and our hydro facilities, our distribution teams, our gas teams, our electric teams. It’s my happy days when I get to go out and be with the team in the field. And I think it does two things. It gives me credibility with our team, so they can, I would say, for the first time in a while, trust the leadership of the company and be willing to adopt a change in their culture because they can trust their leader again. And so, because I think, in fact, my board chair when I took this, or when he was talking to me about joining the company, and I asked him, “Is this like a financial turnaround? The company just went bankrupt, is this like going to be a lot of bankers and spreadsheet turnaround, or is this like a fundamental culture and safety turnaround? Because if it’s a finance turnaround, I’m actually not interested. If it’s an operational turnaround, and if we get to change the way we do our work, and if we need to, and the case is that we need to build a safety culture, then I’m in.” And he assured me it was an operational and cultural turnaround, and he was right. The money follows. When we perform, the money follows. But I just think that the idea that I can do this kind of work, and my team knows that I love the work that we do for the sake of the work and serving our neighbors, our friends, and our families, I think I get a lot of street cred with the team because of my true demonstrated experience and passion for what they do.

– [Ann] Thank you so much for that. So there are going to be refreshments at the back, but first, I just want to thank you so much for coming here to Berkeley Haas.

– [Patti] Thank you for having me at Berkeley Haas.

– [Ann] Yeah, we’re just so impressed.

– [Speaker] Working? Can you hear me? Before you guys go for the refreshments, Patti did want to take a selfie.

– [Patti] Thank you. Thank you.

– [Speaker] Everybody in the back, kind of like…

– [Patti] Come on. Come to the middle. Come to the middle. We’re going to do an aussie. Come to the middle. Get right in here. You stand in front of me. Stand in front of me. I didn’t want you to fall off the stage. OK. Everybody ready? Say Berkeley Haas.

– [All] Berkeley Haas.

– [Patti] Thank you so much. Go there. That’s right.

Arnaud Paquet, MBA 24, wins top campus sustainability award

man wearing a suit jacket with arms crossed
Arnaud Paquet, MBA 24

For Arnaud Paquet, MBA 24, winning a top annual UC Berkeley sustainability award was the culmination of two years of climate leadership and sustainability initiatives on campus.

Paquet, one of four winners honored last month by the UC Berkeley Chancellor’s Advisory Committee on Sustainability (CACS), received an impressive 16 nominations—including recommendations from former Berkeley Haas Dean Laura Tyson, Professor Severin Borenstein, who is faculty director of the Energy Institute at Haas, and Danner Doud-Martin, director of Haas Campus Sustainability.

Paquet has been “instrumental around everything at Haas that pertains to sustainability,” Doud-Martin said. “He is everywhere. He is always connecting with people, always talking to people. Everyone knows Arnaud.” 

“He is everywhere. He is always connecting with people, always talking to people. Everyone knows Arnaud.” – Danner Doud-Martin

Proof point: When Paquet attended the annual ClimateCAP conference two years ago as a Haas fellow, Doud-Martin said the organizers ran a contest to see who could track the most connections made during the conference on their phones. “He won the whole thing,” Doud-Martin said. 

Paquet, who grew up in Brussels and holds bachelor’s and master’s degrees in energy engineering, has spent his career working on the transition from fossil fuels to clean energy. He came to Haas planning to make new connections and go deeper into solving climate change. 

One of his first moves was to join the Berkeley Energy & Resources Collaborative, (BERC), the largest on-campus organization that unites students, alumni, faculty, and industry leaders seeking to turn research toward solving energy and environmental problems. He quickly dove in, helping to organize their annual Energy Summit. Then, he took on the role of co-president, winning the Chancellor’s award, in part, for his work with BERC, which is entirely student-run and spans 11 colleges and 28 departments across UC Berkeley.

“BERC is special because it’s campuswide,” he said. “You can’t assume that climate change can be solved only through business. It’s going to be a cross-functional problem to solve. And so you need all disciplines—business policy, law, engineering, and so on.”

Paquet also spearheaded the inaugural Women in Climate event at UC Berkeley to create a platform for underrepresented members in BERC and the industry. Borenstein said Paquet showed a strong commitment to diversity by launching the conference, “giving diverse voices a platform in the climate crisis.”

seven people standing with Chancellor Carol Christ who is wearing a large scarf
Arnaud Paquet, third from left, with UC Berkeley Chancellor Carol Christ, received the top UC Berkeley sustainability award last month, awarded by the Chancellor’s Advisory Committee on Sustainability (CACS).

Paquet, along with Angelina Donhoff, MBA 24, became the first co-vice president of Sustainability for the Haas MBA Association (MBAA). The pair, both members of the Haas Sustainability Task Force, helped create the new VP role by empowering fellow MBA students to vote for the change. 

Now, they are working with Doud-Martin on a grant-funded pilot program studying the climate cost of airline travel—using an MBA course that requires students to travel to Denmark as a study subject. Arnaud plans to write recommendations addressing the challenge of sourcing high-quality carbon offsets for air travel and the risk of greenwashing.  

He also served as a researcher and co-author for former Dean Tyson and venture capital firm Angeleno Group in a forthcoming article on innovations in climate finance for the California Management Review.

A startup plan

Outside of Haas, Paquet has worked for multiple Bay Area climate-focused startups, including Twelve and Granular Energy, the latter of which he still works part-time as a business development lead. After graduation, he plans to join a startup tackling the challenge of decarbonizing the hard-to-abate sectors, which account for a third of global carbon emissions. 

He said he’s enjoyed much of what makes Haas a unique place. “We have a lot of folks coming to Haas who are mission-driven and want to have a positive impact. And you will see a lot of students either starting their own company or going into climate tech, sustainability, and impact investing,” Paquet said. 

“It’s an exciting time for Haas. The school is launching a new MBA/MCS (master of climate solutions) degree with the Rausser College of Natural Resources and Haas is hosting ClimateCAP next year. I feel like UC Berkeley really prepared me well for what’s next, and I’m grateful for it.”

How instincts lead us astray in deciding how to boost our chance of success

Image: AdobeStock

Say you’ve got an important presentation on Monday that could make the difference in whether a project gets green-lit or not. Would you spend a few extra hours prepping for it over the weekend to make sure it goes well, or blow it off and go out with friends? Now say the presentation has a low chance for success anyway—would that change your willingness to put in the hours?

If you’re like most people, it would, according to new research by Haas Associate Professor Ellen Evers, doctoral student William Ryan, and Stephen Baum, PhD 23, of the Olin School of Business (Ryan and Baum served as co-lead authors). They found that in all kinds of different situations, people underinvest time and resources to improve their chances when success is already unlikely, and yet overinvest in situations where that are likely going to be successful anyway.

“We make these improvement decisions on a daily basis,” Evers says. “Passing or failing a test, making sure we get a job, making a new friend. When you think about it, they are everywhere.”

Weighing chances of success

On a more consequential level, a doctor might have to decide how much time to invest in saving a dying patient, or a government official could face a decision on how much money to invest in preventing a terrorist attack. “There’s always a trade off between how much we’re willing to invest to maximize our chances for success.”

On a strict percentage basis, the initial chances for success shouldn’t factor into one’s decision on investing extra resources. Whether increasing from a 10 to 20% chance of success or an 80 to 90% chance, you still improve your chances by 10%. The researchers chalk up the disconnect to an emotional response: the fear of future regret. “If you already have a small chance of succeeding and you fail, then it’s easy to say, it wouldn’t have mattered anyway,” Evers says. “But if you had a 95% chance and you don’t make it, you’re going to be like, wow, it’s really my fault.”

The results point to the importance of taking the power of emotions into account when considering a decision, and—counterintuitively perhaps—putting emotions aside the most when stakes are highest.

In the first set of experiments in the paper, forthcoming in Psychological Science, the researchers asked people in the lab and online how much they would pay to increase their chances in a lottery of winning $10 by 10%. In all circumstances, the correct answer should be $1. And yet, they found systematically that people would pay as little as 50 cents when their initial chances were only 10%, and as much as $3 when starting with 80%.

Focus on the gain

Interestingly, the researchers could make this effect go away entirely by framing the situation to focus on the gain rather than the loss. After all, if you start with 10% and increase to 20%, you are doubling your chances to win; whereas if you increase from 80% to 90% you are only increasing your chance to win by 1/8. “It shows that people naturally focus on how much of the loss is their fault,” Evers says.

On the other hand, they could increase people’s willingness to overinvest in these decisions by ratcheting up the emotional intensity. In another experiment, they presented people with the option to buy a pill that could reduce their risk of getting a seasonal cold, once again offering situations in which the initial likelihood of getting the cold was high or low. Once again, they found that people were more willing to pay for the medicine when chances of getting the cold were already low—around $15 compared to $10.

But they also found people were willing to pay a premium when symptoms of the theoretical cold were more intense. Again, the researchers say, the finding emphasizes the power of regret, since if you get sick for a week, the consequences are higher than if you get sick for a day, causing people to invest more heavily. While that might make sense from an emotional standpoint, Ryan notes, it means people are more likely to make mistakes in valuing probability when the consequences are highest. “Sometimes we think people make mistakes because they don’t care enough and are not paying attention,” he says. “But this is just the opposite of that—they actually care too much.”

Experts do no better

Nor are people better at making these decisions when they have more expertise. In another experiment they asked actual doctors whether they would be more willing to invest time to improve a patient’s chance for survival from 10 to 20% or from 80 to 89%. Even though the first scenario was objectively better—representing a 10% increase compared to 9%—they found that more than half the doctors chose the second. Even when the researchers skewed the scenario more heavily, 45% of doctors still preferred improving the 2nd patient’s chances of survival by just 5% (from 80% to 85%) instead of improving the first patient’s chances of survival by 10%.

“It’s really important that doctors as a group are good at making these kinds of decisions,” says Ryan, the lead author on the paper. “If every doctor in the healthcare system did this, then fewer patients would survive overall.” At the same time, they speculate, the emotional costs of losing a patient are so high, doctors repeatedly learn the wrong lesson. “If they have a 10% chance of survival and pass away anyway, you never know if helping them more would have mattered,” Evers says. “But if a patient had a high chance of survival and they pass away, you are going to carry that for the rest of your life.”

One way of getting around that kind of distorted thinking is to think of these decisions in the aggregate—for example, investing in extra effort to save 10 extra patients for every 100, rather than increasing one patient’s chances for survival by 10%. Another strategy is to try and remove emotions from the situation as much as you can to minimize distortions. “If you want people to make better investments, then the worst thing you can do is say, ‘This is really important,’” Evers says. Since we all win some and lose some, reminding ourselves that it’s not all our fault can help lessen feelings of regret when things don’t work out—and help us achieve better rates of success over time.

The paper:

By William H. Ryan, Stephen M. Baum, and Elle R. K. Evers
Psychological Science, 2024

Dean’s Speaker Series: Richard Thaler, David Leonhardt discuss future of the American economy 

two men sitting on a stage one holding a microphone
NY Times writer David Leonhardt and Economist Richard Thaler. Photo: Katelyn Tucker

Pulitzer Prize-winning journalist David Leonhardt believes that the American Dream has dimmed over time, but can rise again if the U.S. changes its policies.

With nearly 25 years of experience reporting on economics for The New York Times, including serving as Washington bureau chief and starting the publication’s “The Upshot” section, Leonhardt spent years writing about the American economy. That formed the topic of his new book, Ours Was the Shining Future: The Story of the American Dream.

Leonhardt sat down with Richard Thaler, former president of the American Economic Association and the 2017 recipient of the Nobel Memorial Prize in Economic Sciences,to discuss the history of the American economy and the drive behind Ours Was the Shining Future at a recent Dean’s Speaker Series talk, co-sponsored by the O’Donnell Center for Behavioral Economics.

Much of what he tells in the book is not a happy story. “The problem is…. that living standards have been really rising so slowly for many, many people at the same time that living standards at the very top are rising,” Leonhardt said.  (Watch the video below)

The 1940s through the 1960s were times when society was geared politically and economically toward improving the living standards of most Americans, including those who didn’t have a college education—through labor unions and higher taxes for the rich to invest in public goods like roads and education, he said.

But “over the last 50 years, our society has really moved away from that,” he said, instead taking an individualistic approach that has not worked out for most Americans.  “Part of what I worry about is that many of the ideas that we would come up with for helping lower-income workers to make a good living are basically versions of redistribution,” he said. “I don’t think that tends to be what people want.”  

Describing unions as “grassroots foot soldiers” against a politically powered economy, Leonhardt contends that a strong labor movement is necessary to get us back to improving American society. He discussed the idea of developing new kinds of unions in the scope of current political and economic conditions.

While his book may not recount the happiest history, Leonhardt clarified that the future can still be bright. “I tried to emphasize ours was the shining future—and can be again,” he said. 

Read the full transcript: 

– Good afternoon. My name is Ulrike Malmendier, and I’m a professor here at the Haas School of Business, and I’m also the faculty director of the new O’Donnell Center of Behavioral Economics. And it’s my pleasure to welcome you here; it’s in the name of our dean, Ann Harrison. I’m truly delighted to introduce our two guests, David Leonhardt and Richard Thaler. Neither of them really needs an introduction. In fact, many of you New York Times readers have David’s flagship newsletter in the morning in your inbox every day. David has been at The New York Times for almost 25 years, since 1999, writing on business, economics for the magazine, opinion columnist in the spare time, founding “The Upshot” section, running the “Washington Bureau,” what did I forget? Oh, winning a Pulitzer Prize on the way. So, an amazing career as a journalist, and I’m fortunate enough to have crossed paths with him more than 20 years ago when he, with me just being fresh out of graduate school, took an interest in my own first behavioral economics research, which was on people signing up for gym memberships, paying steep monthly fees, and then rarely showing up at the gym. Discussing that research with David was not only really helpful for forming the research ideas; I also learned, from David, the power of storytelling, of using examples, personal experiences to convey a deeper concept. That’s something academic training tries to drill out of you, I have to admit. But now that I’m, for example, we just talked about it, involved in policy and convincing politicians to do the right thing, I am recognizing it as so powerful. So, all you future leaders here in the room, take note. David, also, while talking with him, actually gave us the title for our very first paper, I don’t know whether you remember. We’d called it something like “Time Inconsistency, Contract Design, and Health Club Attendance.” And then, David wrote a column, an economic column, which had the headline, “How much does it cost not to go to the gym?” And with his permission, we told the American Economic Review that we are renaming it into “Paying Not to Go to the Gym,” which was, of course, a much better title. We’re here today because David has just written his first book, “Ours Is the Shining Future.” It’s the story of the American Dream, which has been named one of the best books of the year by The Atlantic, The Financial Times, and The New Republic. The book starts from him telling the story of his own family, and then, examining the history of the American economy as it has evolved over the decades, examining the forces that have been driving the rising inequality and led to stagnation and lack of progress for many Americans. As we distill his argument, we see that David still thinks and argues that capitalism works better than any alternative we know of, but only a certain type of capitalism: one that’s softened by government intervention for the common good. And he urges us to recognize and foster the power of grassroots movements to instill humanity and opportunity for… Now, putting a more human face on economics is, of course, what our second guest, Richard Thaler is known for. And what won him the 2017 Nobel Prize in economic sciences. It is thanks to Richard that economics, which at times fell into the trap of pursuing analysis based on and enchanted by mathematical rigor more than driven by uncovering the truth about human behavior. It is thanks to him that we have learned again that we are a social science that deals with messy human behavior. And he has ushered these theories of behavioral economics into the mainstream with “Nudge,” his 2009 global bestseller he wrote with Cass Sunstein. I’ve known Richard even a few years longer than I’ve known David. Ever since here, at Berkeley Haas, I was fortunate enough to attend his behavioral economic summer camp in the big room down there, in the F building. Ever since then, he has been an invaluable source of inspiration and mentoring for me and for generations of behavioral economists. I view Richard as the true founder of our field, which includes, by the way, introducing us to Danny Kahneman, whom I also met for the first time at the very same famous behavioral economics summer camp, and who very sadly passed away last week. Kahneman was an academic giant, and introducing his and Amos Tversky’s work to economics was a game changer. In fact, in a time where a lot of psychology evidence in behavioral science is under fire for lack of robustness, as courageously exposed by our very own Haas colleague, Leif Nelson and his team. Richard had pointed us to rigorous psychology research, which we economists can build on, and which is here to last. So, I would like to add a really heartfelt thank you for those gifts to economic science, to a generation of behavioral economists, including myself. Like David, Richard is an amazing storyteller. Just Google “Beer on the Beach,” and you will see the type of narrative, which in my view is what he won the Nobel Prize for. So, we are in for quite a treat here, listening to their conversation right now. Just quickly, before we get going, you should all have note cards on your seat. If you have any questions that come to your mind, which would enrich our conversation afterward, write them down during the event and pass them on. My colleagues, Sarah and Carrie, will be collecting them. And then, the last 20 minutes, I will be able to ask a few of those questions to our two speakers. And with that, I now turn it over to David and Richard. Welcome.

– Thank you very much, Ulrike. And so, I’m going to steal a line from Malcolm Gladwell, who, when he and I did an event like this for I think my book “Misbehaving,” he began by saying how we had met in a hotel bar. And I’m going to say that David reminded me Sunday night, when we had dinner that he and I met in a hotel bedroom. And you know that, in Berkeley, that doesn’t raise as many eyebrows as it might otherwise. But the story is, and we just worked out that David and Ulrike met at the same American Economics Association meeting 20 years ago, 2004. David and I were supposed to talk about economics and have a coffee. And I said, “David, are you a sports fan?” And he said, “Yes.” And I said, “Why are we sitting here when we could be watching a football game?” And David, Sunday night remembered what the football game was, Titans-Ravens. So, since then, David and I have bonded over sports and many other things and have become great friends. So, here’s David’s book, and the title is “Ours Was the Shining Future,” note the tense there. So, why the past tense—and are we doomed?

– We are not doomed. Ulrike, thank you for that wonderful introduction. Thank you Richard, and thank you all for coming. Actually, first, this is from another era. I first learned about Haas when my first job in journalism was stuffing envelopes and opening envelopes for “Businessweek’s” business school survey.

– Oh!

– And so I would-

– Don’t get me started, I had that ruined business education.

– I was very low level—I was very low level. But I remember Haas students liking Haas when I opened those mini surveys. So the line, “Mine is the shining future,” is a line of an immigrant named Mary Anton who moved to the United States from Russia. And she has that line in her memoir. She’s looking up at the Boston Public Library and thinking about the antisemitism that she’s escaped in Russia and made it to the United States. And she describes, she says, “Mine is the shining future.” And, in the book that coins the phrase the “American Dream” in 1931, it ends by telling her story. And so, I knew when I was writing this book that I wouldn’t name it, I’m not good at naming things. My wife came up with the names for our children. I think Ulrike mentioned this.

– We about “The Upshot.”

Yeah, so exactly, so, when we were starting “The Upshot” at The New York Times, I said to people, “There is no way I will come up with the name for this.” So I offered a bottle of champagne to whoever on the staff did, and someone did. And so, I let Random House and my agent come up with the name of it, and they did. Random House first suggested, “Ours Is the Shining Future.” And my agent thought that was a touch too optimistic. And so, she suggested “Ours Was the Shining Future.” And Random House loved the switch. I will confess that, though I love the title, it is, there is, I do think, “Ours Is the Shining Future” is too positive. But when I’ve gone around and talked about it, I tried to emphasize ours was the shining future and can be again. So we are not doomed.

– Yeah, yeah. Yeah, I don’t see that.

– No, it is, that is much of the argument of the conclusion. But yes. But look, much of the story I tell about the last 50 years is not a happy story. I mean, the first chart in the book is that, in 1980, the United States had a normal life expectancy for a rich country. Pretty similar to Western Europe and Canada. Little bit below average if you look, but right in the, kind of the heart of it. And starting in the early ’80s, we departed from the life expectancy line of every other rich country in the world. And for the last 15 years, the United States has had the lowest life expectancy of any country in the world. And it’s not particularly close anymore. And it’s driven overwhelmingly by trends among working-class people. And that’s not a happy story.

– No, and you have another chart showing a type of inequality that doesn’t get as much attention, which is, there’s a difference between rich and poor in terms of life expectancy. That’s quite sharp.

– Yeah, when you look at life expectancy for college graduates, the line actually looks pretty similar to lines for other countries. Whereas, and when you look at life expectancy for working-class Americans, even before COVID, for much of the decade before COVID, had almost completely stagnated. And people often say, “Well, is it X?” And the answer is yes and no. Is it guns? Yes. Is it opioids? Yes. Is it COVID? Yes. Is it car accidents? Yes. But it’s not any one of those things. It’s the combination of working-class life in the United States, that is Anne Case and Angus Deaton, that they’re known for “Deaths of Despair,” but their research is actually broader than that, and kind of looks at just how much, by many measures, life for Americans without a four-year college degree has really stagnated.

– So, the inequality has been a popular topic in economic circles, especially in recent years. Sort of two themes, one that I’ll call the French theme of Piketty and Berkeley’s own Saez and Zucman stresses the rise of the 1% or the 10th of 1%. So, all the billionaires, and then we’ll call it the “Chetty theme,” Raj Chetty and his army of researchers that are stressing the difficulty of, say, going from the bottom quintile to the second quintile. Your book is more about the latter, right?

– Yes.

– And so, what’s your take on, what you’ve learned about that and why is it that it’s harder than it was when I was a kid, or when you were a kid, for the people at the bottom to move up?

– I think I do focus more on what you’re calling the “Chetty” part of the story. But I also think the French part of the story is important. And a lot of the data that I use in the book comes from Saez and Zucman and Piketty. I think that the, what’s going on with mobility and opportunity for the bottom half is more important in part just ’cause the bottom half has many more people in it than the top 0.01%.

– Right.

– Right? And so, it just affects many more people’s lives. And I think if we had a society where, and we briefly had this in the late ’90s, if we had a society where the rich were getting a lot richer and inequality was rising, but living standards for most people were also rising, I think Americans would be mostly OK with that. I think the problem is the combination: that living standards have been really rising so slowly for many, many people at the same time that living standards at the very top are rising. And I do think there’s a relationship between that. I mean, I think the very, very rich have more control over our political process as a result of that. But I don’t think that’s the dominant explanation. I mean, what I try to argue is that as a society, we had a society in the ’40s and the ’50s and the ’60s for all of the terrible problems. We had a society that was very much geared politically and economically toward improving the living standards of most Americans, including Americans who didn’t have a college education. And that took the form of labor unions, which I know we’re going to talk about. It took the form of a political system that taxed rich people quite highly, that invested lots of money in things like roads and colleges. The University of California system came out of those years, and there really was an enormous emphasis to use the resources of our society to improve most people’s lives. There was also, and this is relevant for a business school, there was a culture in corporate America that seemed more invested in this country and in communities and that was a little bit less self-seeking. And I talk about some of the executives like that in the book. And I think, over the last 50 years, our society has really moved away from that, and imagined that a kind of laissez-faire individualistic approach could work well for everybody. Which I don’t think was a crazy theory, I just don’t think it’s worked out.

– So, there are, you sent me an email recently saying, “I know there are three things you’re going to disagree with me about, unions, immigration, and trade with China.” And so, we’ll talk about those because they’ll be interesting conversations. But so, you think Trump basically had it right?

– I do not think Trump had it right.

– OK, so-

– I would hope I have a long record of journalism that justifies that statement.

– Oh, OK. So, alright. So that was a joke, of course.

– Yeah, yeah, yeah, yeah.

– So let’s start with unions. You tell several stories, including the workers in the Pullman train cars of how unions helped pull the bottom end up, so elaborate a little on that and what you think the, what the benefits are, and why is it that they have decreased in power and influence?

– Let me just start by saying, I’m aware that unions are flawed institutions. I’ve been in a union.

– So, noted.

– I’ve been in a union at The New York Times, if you asked me to list, I don’t have much of a temper. If you asked me to list the five times I’ve been silently angriest in my life, one of them would be when I went to my union representative at The New York Times to explain that my infant child needed neurosurgery, and there were no neurosurgeons in the union-covered plan. And I kid you not, my union representative said to me, “Have you considered calling a neurologist and asking if they also do surgery?” And you know, this most vulnerable moment of my life, I don’t know whether it was a bad attempt at a joke or a serious bad suggestion, but this was someone who at that point had power over me. Right? And was in many ways a monopoly. ‘Cause this was my health insurance plan. So I understand the way that people can be frustrated with unions, and I’m now a manager at The New York Times, and sometimes, the union stands in the way of change that I think is important. So I get that unions are flawed. I think the issue is that corporations are flawed as well. And when you have flawed corporations that are not checked by flawed unions, you have a really high inequality economy. And so, what I try to tell in the book is, if you look at the economy of the United States in the late-19th century and 19 aughts and teens and twenties, we had a tremendously high inequality economy without labor unions. And then, we had the enormous growth of labor unions, and we had this incredible rise in pay for working class people. And then labor unions started shrinking. And the time series works out almost perfectly that it is also the case that inequality starts rising. And it’s not, this isn’t simply time series evidence. There’s research by Henry Farber and Ilyana Kuziemko and Suresh Naidu and others that really look at similar workers and see that a unionized worker tends to make about 10% to 20% more than an otherwise similar worker. It doesn’t tend to come out of economic growth in most cases. It comes out of corporate profits and executive pay. It is redistribution, which I understand why many executives and investors may not like that, but I think it’s better for most people. I think without unions, corporations just tend to have too much of a power advantage in the negotiation. If I’m the boss and you’re the worker and I underpay you, it’s really hard for you to quit, right? ‘Cause you have a family. And so, I just think, I understand unions have flaws. I understand why they can drive people totally nuts, but I think we now have more than a century of evidence that when you have an economy without unions, many, many people end up earning relatively low salaries. And it’s very problematic

– So I mean, one question to ask is, “Is there another way?” So I have my own, I’m organizing a conference, a couple months back in Chicago. And because of some union rule, you know what a poster session is? Have you ever-

– Yes.

– Yeah, so, the poster sessions are at academic conferences. Typically grad students and junior faculty who can’t get on the program are given an opportunity to stand in front of a board where they’ve posted up some slides and talk about their research. It turns out, because of some union rule, it costs like $1,000 per board to put up. And so, we can’t have a poster session, which is damaging to the young scholars who, as Ulrike knows, I am always on their side. So, that’s a trivial version that we could tell thousands of these stories. Is there a way of giving power to the people without having the work rules that make organizations less efficient?

– I’ll half answer and then I’ll ask you a question. Most of the time that Richard and I have spent together, it’s me asking the questions.

– Yeah.

– So I can’t help myself. There’s another recent paper by actually some of the same researchers whose names I just mentioned, in which they look at workers relative preference between what they call redistribution and predistribution or market wages and post-government benefit wages. And basically, what they find, and I’m slightly overgeneralizing, but not by much here, is that everyone wants higher market wages for themselves. I think because of ideas involving dignity and respect.  So, what rich people want, rich, particularly rich progressives, is they want a system where they make a lot of money; and then, they get to redistribute it through taxes and benefits. And what poor people and working class people want is a system where not, where they’re getting money through government benefits, but where they actually, their market wages are higher. And so, part of what I worry about is that many of the ideas that we would come up with for helping lower-income workers make good livings are basically versions of redistribution. Where New York Times journalists and MBAs and tenured professors get to make more money. And then we get to-

– Yay.

– Yay, we get to give it to people through taxes. And so, I don’t think that tends to be what people want. I don’t think it’s as healthy in a whole bunch of ways. So I guess my question to someone who is more skeptical of unions would be, “Do you think I’m wrong to be so negative about the economic trends for less advantaged people over this era when unions have been shrinking? And do you see some other way that we can have mass prosperity without a meaningful labor movement?”

– Well, I’ll respond by asking my next question as a way of answering that, which is many people admire the economies in Scandinavia, like, Denmark and Sweden, maybe even Germany. But we’ll let Ulrike opine on that if she wants. So people in Copenhagen seem to have good lives and are happy, but the distribution of income is much less skewed. So is there a way of achieving that? If I could plunk you and your family and social network into Copenhagen or Stockholm, do you think you’d be happier? And would that be a better model?

– Well, I think it’s, I mean, much of Western Europe does have stronger unions than the United States does, right? With both the advantages and disadvantages. So, it’s not simply a case of them having a larger, or a government system in which they redistribute income that way.

– Well, they have higher taxes and social network.

– Yeah.

– A social safety net as well. So unions are a part, I agree.

– Unions are a part of it. And I think, and look, I think unions are important both because of, I don’t think unions are the full answer to be clear, but I think it’s really hard to imagine us having an economy that delivers prosperity to more people without stronger unions, both because of what they get directly for workers in negotiations. Look, I was just, I’ve said a couple critical things about the union at The New York Times. The union at The New York Times just won pretty significant wage increases for its members. I am confident, as much as I like the people who run The New York Times, that they wouldn’t have given them that size of wage increase without the union having the threat of a strike. And I would say the same thing about GM and Ford. And so, not only do I think unions bring direct benefits to workers, but I also think they end up often serving as kind of grassroots foot soldiers in a society and an economy where more people have political power. So you mentioned Pullman, one of the heroes of my book is A. Philip Randolph. I think many people think of A. Philip Randolph, if they think of him today as a civil rights leader. And he was a civil rights leader. He’s the original organizer of the March on Washington. It’s a story I tell in the book. It was originally planned for 1941. He faced down FDR over integrating wartime factories. So he canceled the March on Washington in 1941. That’s what it was called, the March on Washington. And they rescheduled it 22 years later. And A. Philip Randolph was the first speaker at it. He was the elder statesman at that point. And it’s not a coincidence that the labor union that A. Philip Randolph built with these low-wage women and men who worked on Pullman trains basically became the seeds of the civil rights movement. That is often the way that these movements happen. And so, I think that labor unions are really important in multiple ways. I don’t think we should try to recreate the unions of the past. I think we need new kinds of unions. And I also think that for all their excesses, there are often ways for corporations to push back against those excesses. So the union at The New York Times not only has asked for higher wages, but it’s asked for a bunch of other things that the management said “no” to, right? And so, sometimes, what unions ask for don’t have to become policy.

– Yeah, I’m sure, the fact that The New York Times is mostly digital now is bad for the union.

– Yeah.

– Since there were lots of jobs making a paper.

– Yeah. And just to say, I don’t mean this to say it means that I’m right about this. I say it more as a piece of self-criticism. The process of working on this book made me think that, during my 20 plus years as an economics reporter, I hadn’t written enough about the importance of labor unions. So maybe that version of that old version of me was right. And you’re right. I think it’s a really hard and important question.

– Yeah, look, I’m asking the questions, so I’m not answering them. So, for once in 20 years, we get to switch roles. So, OK. Along with unions, the other second evil menace in your book are immigrants. Of course, we are the children of immigrants, and probably 90% of the people in this room are as well or are actual immigrants like Ulrike. So, of course, you’re pro-immigration, but you have some thoughts about immigration. You know, there are low- and high-skill immigrants, and I think California represents the value both provide. I mean, Silicon Valley would not exist if it were not for thousands of immigrant engineers and tech startup founders and so forth. And the rest of the state couldn’t exist. If you go anywhere where there are people working, they’re speaking Spanish. So it’s a state that doesn’t exist without immigrants.

– Yeah.

– And it’s the most prosperous state in the country. And it would be a prosperous country if it were a separate country. So, since you’re not anti-immigrant, what are the tweaks you would prefer?

– No, and I do have more criticisms of the way our immigration system works than many people with whom I agree on many other things. So, I think California’s an interesting case. I’m mostly not going to talk about California, but it’s, right, it is a very prosperous economy. It’s also a very unequal economy, right? Where all kinds of things like, homelessness and poverty, right? So it’s not a perfect economy by any means. Not that you were suggesting it was. So, I think, I have two basic criticisms in my book of the dominant political tribes in the United States. So far we’ve been talking about my criticisms of conservatives. And it’s not just conservatives, it’s many economists, right?

– Yeah.

– Yeah.

– Chicago school.

– Chicago school economists.

– They’re the other villain in this.

– And as I said, I think some of the arguments that people made in the 1970s about how to fix the American economy, ’cause it had real problems, were legitimate arguments. But I also think they made a set of predictions about what would happen if we had a lower tax, less regulation, less unionized economy where corporations were allowed to grow really large. They made specific predictions about how this won’t just be good for affluent people, it’ll be good for everybody. And I think those predictions have not come to pass. And so, part of what I’m saying is, “Let’s look at that economic system and be honest about what it is delivered for most Americans.” My second set of criticism is that I think, in the United States, as in parts of Europe and other countries, the center left party in our country, the Democratic Party has really moved away from the views and values of working-class people and often actually become disdainful of those views.

– You call ’em the Brahmin Left.

– The Brahmin Left, which is a Piketty line that I give him credit for. And I think it’s a great line. And look, this is where I, and I’m guessing many of you, spend my life, right? Like, highly educated coastal suburbs. And part of the reason I focus so much on immigration is that I think it’s actually a signature example of how relatively privileged progressive Americans have moved away from the views and the values and even the interests of less privileged Americans. And so, the main story I tell in the book is the story of the 1965 immigration law. And it’s really important to go back and look at that law and the people who are advocating for it: LBJ, Ted Kennedy, Robert Kennedy, a lot of moderate Republicans back when they existed. And what they said was, they said, “We’re getting rid of our old racist system of immigration.” They didn’t use the word racist, but that’s what they meant. Where basically all slots were reserved for Western Europe, and we’re replacing it with a system in which it will be first come, first serve. They specifically promised, specifically, repeatedly, that it would not lead to a large increase in the volume of immigration. This is one of the things that I actually found most enjoyable from a kind of academic process of reading this old work at the Library of Congress. Again and again, Ted Kennedy and LBJ’s cabinet secretary said, “Don’t you worry, we’re not increasing the amount of immigration, we promise we’re not increasing the amount of blue collar immigration.” The example RFK used is, he said, “We are not bringing more ditch diggers to this country.” Because they understood that most Americans were not in favor of a massive increase in immigration. They were completely wrong about what their own law would do. I don’t think they lied, I just don’t think they thought about it very carefully. And the fact is, we have had an enormous increase in immigration. And so, now what happens is that many people on the left and the pro-business right as well, they say, “Well, that’s OK because immigration has no costs for anyone. It is a free lunch, it is great for the immigrants, and it doesn’t have any wage costs for anyone else.” And I think most Americans look at that, and they don’t believe it. And I think we can dig into the data about whether immigration has costs or not. I think it has some costs for lower-wage workers, and I think many people fundamentally understand this. Why did doctors make it so hard for immigrant doctors to come into this country and compete with them? Well, if immigration didn’t actually have any wage costs.

– You mean the MD cartel you’re referring to? Yes, yeah.

– Yes, the MD cartel says, “You can’t be a doctor in this country unless you’ve done your residency here.” That’s a ludicrous rule, right? If you… Because we’re saying that you can’t get good medical training in India or Australia or Britain. Sure, seems like you should be able to. And, but doctors understand, right? That having a lot of people come in and compete probably creates wage pressure for them. And so, I tell the story of immigration because I don’t think Americans, including many recent immigrants who were uncomfortable with really high levels of immigration, with an immigration system that doesn’t work, with high levels of illegal immigration. I don’t think they’re bad people. I don’t think they’re racists. Some of them are, but I don’t think it’s inherently racist to be skeptical of immigration. And we’ve ended up with a situation in which our left of center party, particularly elites in it, look at those people and say, “No, no, no, no, no. You are wrong to have those views. You’re ignorant. You are hateful. You need to understand that more immigration is better for everyone including you.” And I think that’s really debatable. And I also think that a lot of Americans look at that party and say, “No thanks, you’re disdainful of me.”

– OK, I think, I’m going to give you a pass on China and free trade in order to get you into trouble on something else. You had a piece recently on the SAT.

– I did.

– And there are basically three policies that are around. One is the old policy that you had to submit test scores if you wanted to get accepted to an elite college or university. Dartmouth, among others, has recently instituted that. Then there are the second policy that University of Chicago and many others have, which is it’s test optional. And then, University of California, where you’re forbidden from disclosing your SAT score. I don’t know whether you can whisper it in an interview, you guys might know, put it, tattoo it but so give us your brief take on why you think the old system there is the right one.

– So if we were trying to fill an orchestra and we discovered some kind of test that helped us predict how good a violin player you would be, would we dismiss that test? If we were trying to fill a basketball team, I am a huge basketball fan. It’s possible, I was at a dinner last night where I was sneaking looks at Caitlin Clark versus Angel Reese on the side of the dinner. If we had a basketball team and there was a test we could give the players that would tell us how good they would be at shooting, would we want to look at that test in order to decide who should play on our basketball team? Of course we would. And we wouldn’t spend any time agonizing over it. For years, the research showed that the best way to understand how good a student someone would be was to combine their high school grades and their SAT, that both were better than one alone. Over time, that is still the case, but over time, it has become clear: the SAT is better than grades in part because of high school grade inflation. Berkeley cannot fill its college ranks with everybody who gets A’s, you don’t have room for everybody who still gets A’s. And so, even though that is the case, many colleges have decided that they are not willing to either. You don’t have to submit scores, or, as the University of California does, they will not accept scores. It is also the case that when you poll Americans, more than 75% of Americans, including more than 75% of every major racial group, Black, Latino, Asian, and white, say that college test score, that standardized test scores, should play a role in college admissions. And so, this to me, it’s not quite as important as immigration, but this to me is another example in which the Brahmin Left has gotten on the other side of what I think the empirical evidence shows; and that, if we want a world where we are admitting the students who are likely to do best in college, the SAT and ACT help us discover that. And yes, they have class gaps. Yes, they have racial gaps because we live in a deeply unequal society in which everything has class and racial gaps. But, and this is a point that Raj Chetty makes, the class and racial gaps on the SAT are nearly identical to the class and the racial gaps on the NAEP. Now, I’m guessing many of you don’t even know what the NAEP is. The NAEP isn’t just a low-stakes test; it is a no-stakes test. It is a test that third and eighth graders take that has no bearing on the student’s future. It doesn’t even determine whether you get into honors algebra. It does determine how schools are graded, right? So, when you hear the nation’s report card, and you hear which states are doing better, that’s all the NAEP. But it doesn’t matter for students. So, no one ever takes NAEP test prep. People don’t go to Stanley Kaplan for the NAEP because it has no impact on their lives. The racial and class gaps on NAEP scores are nearly identical to the racial and class gaps on SAT scores. And so, yes, the SAT is picking up inequality, but if colleges use it right, they can actually use it to identify lower-income kids and underrepresented minorities who are going to thrive there. And I kind of don’t understand the idea that there is this useful, important information that we’re scared of looking at.

– Well, I agree with you. And let’s turn it over to Ulrike and the audience.

– Excellent, well, thanks so much for a really fascinating discussion. Particularly your discussion about unions striking a court, so lots of questions about that. To comment briefly on the German unions, they make my life very hard right now when I have to fly to Berlin and I land in Frankfurt and my Lufthansa flight doesn’t go because they are on strike. I tried to take a train. Well, it turns out the train is also on strike, and I’m stuck in some airport hotel. So the unions, for that reason; and because my Italian husband is smiling about the trains in Italy going smoothly and everything working, and in Germany, everything breaking down. So that is a problem. But more seriously, the kind of two issues. One is, in some sense, “What are the union negotiations driven by?” You had this heartbreaking example of your personal case where the person clearly wasn’t trying to maximize your welfare, quite to the opposite, at least in Germany, the discussion is right now about career concerns of people who want to be elected to be a union leader and might exaggerate in their demands for populism reasons, basically. So in terms of the design, I think there’s a lot to be done. There’s also the question, and that’s the traditional old question about unions. That they are an instrument to help the people who are in the “in-group” to get higher wages. What about the people who don’t have a job, right? Might they be harming them if the outlandish demands of The New York Times union had to be agreed upon, which you said that they weren’t in the end, would that mean, we might not have a New York Times anymore; or we have The New York Times because it would be so much? So this in-group, out-group question and the question, so, you in your book and in your discussion right now, we’re a lot focusing about unions and wages and how they’ve correlationally seem to have helped the lower deciles and quintiles. I would love for you, and one question goes in that direction to bring it together with the loss of manufacturing jobs or generally industry restructuring and certain jobs and companies from the traditional mining to much broader jobs disappearing. So if that’s our concern, that people don’t have a job at all anymore, hence no income, if it’s not about how low it is and rising it, but just allowing people to make a livable income and have prosperity across all regions of the U.S., how do you see the way forward here? And actually, maybe we can bridge it a little bit to behavioral economics in a second; and well, I’m happy to step in, but hear your thoughts about that. Do you see, is it contrast there, as maybe the unions being a positive force on the wage increases, conditional on being, having a job, but possibly to the detriment of those who are outside?

– So, I’ve been now going around to many campuses talking about my book, and one of the things, a question I occasionally get is, “You talk about all these problems of capitalism, but you treat them as manageable. Maybe capitalism itself is the problem, and we should instead just reject capitalism.” And I say, “The problem with that idea is that there has never been a noncapitalist society that has delivered really good living standards for large numbers of people.” Like none, right? And this is a somewhat indirect way in answering this, I’m sorry, Ulrike, but I actually feel this comes from the other political side, but I actually feel somewhat similar about unions, which is for all the problems with unions, I really struggle to find an economy that has delivered mass prosperity to huge numbers of people without a really important labor union presence. And so, while I agree with many of the problems with unions and think they need to be checked and think that public sector unions can be particularly problematic because they’re not always ways to check them, I would actually be quite happy if we could find some example of a society and an economy that delivered mass prosperity and had really healthy wages for people who are less fortunate than I am that didn’t have unions. ‘Cause I see all their problems, but I really struggle to find such an example and the examples where capitalism, where living standards tend to be best to me are almost always capitalist economies where you have a pretty meaningful government and labor presence. And to the second part of your question about jobs, I do think that unions can sometimes sacrifice jobs for the sake of wages. I think, in the United States today, we don’t really have a jobs problem. We have a good jobs problem. And so, if some of the tradeoff is that we’re going to end up eliminating some lower-paying work and creating some more good-paying work, that’s a trade off I’d be willing to take.

– Yeah, so let’s actually, let’s continue on that, and let’s leave the poor unions just for a second out of here, even though there’s so many questions about them. But will that happen? Why is it not yet happening? So I’m asking myself that question if I look at U.S. data, I am asking myself that question tenfold when I look at German data or any other population, which is much more dramatically shrinking, partly because they’re even less of an immigrant country than the U.S. We have this huge lack of hours worked to increase productivity, and yet, I don’t see wages for lower-level jobs and training of people who land in lower-level jobs and efforts put into making sure that they get an education, so that they don’t land in these lower-level jobs, increasing as much as it would be good for aggregate productivity. That could be a way out of this problem you guys were discussing about, “How do we get people not just to get money redistributed, but to earn a higher wage. Why is that not happening?”

– I think it has a, I was just talking about the United States, not Germany. I think it has a huge amount to do with bargaining power, that it is still the case that it is very hard for workers to be able to negotiate for really good wages when they are each on their own, right? As opposed to being collectively together.

– Yeah. But I mean, even before they land on that job. So I am born into an area with not the best schools, and I’m going to get a training that won’t allow me to apply for some upward trajectory in terms of career. Politicians, as much as anybody who’s working in the economy and running a business, should say, “Well we should go in there, we should get here in the U.S., you have the no child left behind policy. You should really have no possible member of the workforce left behind a policy, to get them to a level of training and make the best out of their talents. I don’t see a dramatic change happening, which I would’ve predicted given the population changes.

– I do think the Biden administration deserves some real credit for their efforts in some of these areas.

– Bidenomics.

– But yes, I mean, the Biden administration really has tried very hard to invest in regions that have had less economic growth even though many of those regions are not blue areas. And even though Biden seems to be getting no credit for it politically, which is a real mystery, I mean, you look at a state like Ohio, where they’ve opened a whole bunch of semiconductor factories, it’s not going to turn around the economy immediately, but it really should, in the long term, make a meaningful difference. And I do actually think this is part of, to come back to our first question about why, despite the story I tell, it’s not that I am optimistic, it’s that maybe I’m hopeful. I do think we have the tools to do it. I do think policymakers have increasingly looked at the evidence, the economic evidence, and tried to change things. And I think the Biden administration has really tried to put in place some policies that are responsive to the fact that a whole bunch of market-based systems haven’t delivered what they promised, including some of these ideas. Now, it’s going to take a long time, and I told you, I don’t have an answer for why he’s getting no political credit for it.

– Yeah, so a little more is the shining future, a little more optimism.

– Could be.

– OK.

– Yeah.

– Now, one related question, which popped up in a lot of cards I got, is about the role of AI. So, how do you think AI will affect the income, living standards, distribution? How does it play into the theme of your book?

– Can I admit our conversation on the way over here?

– Yeah.

– We were driving over here, and I said to Richard, “I have to admit something that’s a little embarrassing, which is I don’t totally get why AI is going to be such a big deal.” It’s not that I doubt that it will be a big deal, but when I ask people for examples of how it’ll be a big deal, they’re all kind of like, fairytale, either we’re all going to die, or, and then when I go and use it, it’s kind of, eh, and you didn’t disagree with me.

– Yeah, I mean, look, neither of us are experts on AI, but my take on it is that, I don’t know enough to know whether I should be afraid, but I do know there’s enormous room for improvement on things like call centers.

– Yep.

– And you know, one example, my home wifi went out and OK, I call the cable company, God forbid, and they say, “Alright, reboot your router.” I did that. OK, oh, then we do thing two and she has to do that and that doesn’t work. And you know, this is taking half an hour. And then she says, “Oh, OK, now we have to do thing three,” and that works. A month later, the same problem happens: I get to some other person and of course, we have to go through thing one and thing two why doesn’t the system know this is the guy who called a month ago and what you do is press thing three and right? I mean, we all live through those horror stories all the time. It’s not, yes, it’s a virtual problem, but you know, it’s like, all, you know what I call sludge, there’s sludge everywhere and it seems like AI could improve that a lot and whether the world ends, I don’t think that the world will end in my lifetime or yours, maybe your kids.

– The two things that so-

– So, why do I worry?

– The two thing… The, the-

– Social preferences?

– I do actually think there’s an interesting relationship here to political power. We didn’t talk about antitrust, but I talk about antitrust a fair amount in the book. Robert Bork is another character figure in the book. He’s famous not for his antitrust work, but it’s the most important work he did. And even if you were right, and I’m sure you are, that AI could solve all those problems if the cable company basically has you captured, they have no interest in solving it, right? And so, we need to not only get the technology, right? But we also have to get some of the power dynamics right. And we have to make sure that we actually have-

– Yeah but Elon will supply my-

– He will get ’em.

– And then I’ll have no worries.

– I do think it’s the, David Autor of the MIT economist has gotten some attention, including a recent piece in The New York Times about how he actually thinks AI could reduce inequality by basically giving less skilled, lower-earning workers the power to be more productive. Right? And that’s a version of what you’re talking about with the call centers. So, if there was someone at the call center who actually had the ability to fix when my NFL RedZone package goes out-

– Oh God.

– At Sunday at 1:45 and my Texan wife is not happy about it, and I’m going totally nuts about it, and we’re all running around in our house, “How can we watch football?” And if we could call someone and basically have them fix it, that person could make more money, right? And so, I do see, theoretically, how AI could actually be inequality reducing, but in the short term, this wasn’t exactly your question, I would just really like it if some people could do a better job just giving us examples of here’s how AI can improve your life a little bit right now.

– Yeah, so, I mean, I think there are good example of how, in particular, natural language processing can help us to substitute certain jobs, including the ones that Richard mentioned. I do think it needs to come in combo with a renewed effort to invest in the human capital of the people who would’ve otherwise ended up in those jobs. And you are more optimistic on that than me, I have to admit. But you brought up another point, which is politics, political power. We also had a question about that, about the U.S. Congress being the lowest productivity Congress in history in terms of legislation passed, and how you can be standing here and saying, “Well, if you just get our act together and focus less on ego and narcissism and on the common good, things will get better because how will the framework be created to provide the guardrails for that in the current situation.”

– So the statistic on the lowest productive Congress was, I think it’s the current House, right? I do think, look, I have criticisms of the Biden administration. I think they’ve completely mishandled immigration along some of the lines that you would guess based on what I’ve said, right? I mean, if you go back and read the Democratic Party’s 2020 platform on immigration, it’s all about allowing more people in. It’s almost nothing about figuring out a way to prevent the kind of problems we’ve had. That is a radical change in the Democratic Party. Go back and look at the way Barack Obama talked about immigration; it’s very different. So, I think Joe Biden has mishandled immigration. I think he can fairly be blamed for a meaningful part of the problems at the border. So I have criticisms of the Biden administration; however, I think they’ve gotten a lot right. I mentioned the semiconductor policy. When Joe Biden took office and was talking about bipartisan legislation, a lot of people, including me, had a little bit of reaction of, “There he goes again,” like imagining a Senate that doesn’t exist anymore. And Joe Biden passed a really impressive group of bipartisan legislation. The semiconductor bill was bipartisan; the infrastructure bill was bipartisan. Some of the military stuff was bipartisan, and he didn’t let that keep him from passing the stuff that Republicans were never going to agree to at the same time that he was passing the bipartisan stuff, and I say this not critically, he jammed through a bunch of bills, like incredible fundings for clean energy research and making health care cheaper that Republicans were never, ever going to agree to. And so, I am not naive about the political challenges that face us. I am specifically worried about the threat of what a second Trump term would mean, given what he has said about his, how he views democracy and how he would use the political system and the justice system to go after his enemies. How he would round up huge numbers of immigrants. I mean, it’s really authoritarian, frightening stuff. And so, I’m aware of the risks and the challenges we face. I do nonetheless think there is evidence both over the last few years and in the 21st century, if you include marriage equality, if you include Obamacare, that our political system, when people organize, can actually be responsive to real problems in society.

– Isn’t that an optimistic word to end on? Thank you so much.

– Thank you.

– That was a fantastic conversation. Great questions. Thank you very much.


New program gives undergrads space to develop resilience


class of students with their professor
Tarun Galagali, CEO of startup Mandala, (far right) with his class of undergraduate students in the new Foundations of Resilient Leadership Program.

Julianna De Paula, BS 24, approaches life a little differently since she finished the new undergraduate Foundations of Resilient Leadership program at Berkeley Haas.

First, she pauses to think before having difficult conversations. She also takes time out to breathe—truly pay attention to the inhale and exhale—throughout  the school day. She believes that both changes will help her as she gets ready to move to New York City to launch a career at L’Oreal this fall.

“There’s a lot going on with the war in Gaza and the protests and a lot of my friends are impacted by what’s going on in Palestine,” said De Paula, one of 30 students, largely Haas undergraduates, enrolled in the class. Being a more active listener helps guide her navigate the stress, she said. 

These skills will also make her a more resilient leader, which is the heart of the new six-week certificate program founded by Tarun Galagali, CEO of startup Mandala. The program, also used to train employees at corporations like Microsoft, covers topics that range from having difficult conversations to navigating imposter syndrome to listening mindfully to understanding the meaning of values-based leadership.

Woman standing next to a man on a college campus
Emma Daftary, assistant dean of the Haas Undergraduate Programs, with Tarun Galagali, CEO of startup Mandala.

Galagali worked with Emma Daftary, assistant dean of the undergraduate programs, Lauren Simon, associate director of Student Life & Leadership Development for the undergraduate program, and Katrina Koski, director of inclusion and belonging at Haas, to launch the class at Haas this past spring. (Mandala is an ancient Sanskrit word that means circle—referring to community and connection.) 

Developing “skills to navigate”

The program provides students an open space to discuss their struggles and challenges. In doing so, it normalizes feelings and experiences that can otherwise leave students feeling isolated and alone, Daftary said. 

It is our role as a business school to help shape and inform inclusive, resilient, effective leaders,” Daftary said.We launched the program to provide our students with the skills to navigate situations that are personally and professionally triggering.” One catalyst for the program, among others, she said, was the turmoil on campus following the Hamas attacks in Israel on October 7, and the resulting war in Palestine. “We were meeting with students and they were reporting that they were having a really difficult time processing their grief while balancing the demands of their classes,” Daftary said. “They were feeling alone and disconnected.”

It is our role as a business school to help shape and inform inclusive, resilient, effective leaders,” —Emma Daftary.

man teaching at a podium
Tarun Galagali, CEO of startup Mandala, asks students to share “glacier stories,” and open up to each other about their struggles.

In class, Galagali starts by sharing his own story, beginning with his childhood as the son of Indian immigrants growing up in Cupertino, Ca.  After earning a Harvard MBA, he worked as a product marketing and strategy lead at Google, a management consultant at EY Parthenon, as a director of strategy at online therapy platform Talkspace, and as as a senior political advisor to Congressman Ro Khanna. Under the surface of the names on his resume, he said, there are “glacier stories” of feeling isolated, inadequate, or not belonging at times.

“I share (my story) to show that there’s a story behind each of the resume logos and resilience embedded in them,” he said.  There are positives to these stories, too, he said, as he used what learned about leadership and teamwork at Google and from his experience lobbying for mental health of kids in California to build out the Mandala program. 

Balancing stress and anxiety

Coco Zhang, BA 26, who lives with and supports her single mother by working part-time jobs as a full-time student, said she often feels over-committed and burned out at Berkeley. What helped, she said, was learning that she was not alone. “Before I joined (Mandala) I thought I was one of the few who struggled a lot,” she said. “It helped to hear other students’ experiences and to know what they are doing to balance stress and anxiety. It motivates me to see what they have done to handle imposter syndrome and to learn some invaluable mental well-being concepts that have helped me to ground my true self to go beyond my boundaries and rise above the horizons.” 

Jacob Williams, BS 24, who was part of the founding group that worked with Mandala to launch the program, said the principles explored have provided him with tools he has already deployed in daily life. 

man wearing a suit jacket in front of a building
Jacob Williams

“I think this semester has been revolutionary for me” he said. Through the program, he said he has learned to “jump across domains,” and make new connections, such as connecting the dots between his cancer research and his DEI efforts, which has made his work a lot more meaningful. “On the first day of Mandala, Tarun explored the concept of an underlying glacier,” he said. “Among the many interpretations shared, the concept of a subconscious root to the way we think, behave, feel, and act really resonated with me. Realizing the deeper motivations behind my intuition and the ways I’ve chosen to govern has allowed me to communicate in a way which ultimately generates greater value, meaning, and impact for the people I work with and the public I’m honored to serve.”

A successful outcome

Galagali said the program is particularly relevant at a time when people are “quiet quitting” at work due to burnout. People lack critical things at work, he said, including psychological safety and a sense of belonging and connection.

Galagali said he would like to expand the Berkeley program, based on the success they’ve had so far: 88% of students who finished the program reported an increase in resilience; 94% of students reported reductions in burnout; and 100% felt the program improved their confidence in entering the workplace. 

A lot of this is a personal deep desire to create community,” he said, noting that students who have completed this program have reported that they are better able to show up for hard conversations, that they’ve learned something new to make them better at their job, and that they have more self awareness and awareness of others.

De Paula said she hopes the program will continue. “It was surprising to see so many Haas students opening up to each other,” she said. “Tarun is also very inspirational as a mentor, so I have only good things to say about the program.”

Former Haas Dean Rich Lyons named new UC Berkeley chancellor

man wearing a suit and tie standing on balcony in front of trees
Rich Lyons at home in the Berkeley Hills. Photo: Keegan Houser/UC Berkeley

Rich Lyons, former dean of the Haas School of Business and UC Berkeley’s current associate vice chancellor and chief innovation and entrepreneurship officer, has been selected to become UC Berkeley’s next chancellor.

Lyons will assume his new role on July 1, 2024, when current Chancellor Carol T. Christ retires.

University of California President Michael V. Drake announced his selection and the UC Board of Regents approved the appointment during a special meeting held today at UCLA. Lyons, who has devoted most of his career to UC Berkeley, will be the university’s 12th chancellor, notably the first UC Berkeley undergraduate alumnus since 1930 to become the campus’s top leader.

“I am naturally humbled and thrilled to be serving alongside all of you in this role,” Lyons said after the appointment was announced. “The University of California, as we know, is not just one of this country’s most important assets; it’s one of the world’s most important assets, and we steward that asset, and that is an enormous responsibility.”

“The University of California as we know is not just one of this country’s most important assets; it’s one of the world’s most important assets, and we steward that asset, and that is an enormous responsibility.” – Rich Lyons.

Christ lauded his appointment. “I am both thrilled and reassured by this excellent choice,” she said. “In so many ways, Rich embodies Berkeley’s very best attributes, and his dedication to the university’s public mission and values could not be stronger. I am confident he will bring to the office visionary aspirations for Berkeley’s future that are informed by, and deeply respectful of, our past.”

Members of the UC community congratulated Lyons and spoke on his behalf during the meeting, including Jo Mackness, MBA 04, an associate vice chancellor at UC Berkeley and a staff advisor to the UC Regents. “As an economist, as a finance professor, you bring the financial acumen and the creativity that will be required to finance UC Berkeley’s future,” Mackness, who formerly served as chief strategy and operating officer at Haas under Lyons, said. “And as good as you are at vision and strategy, you understand Peter Drucker’s old adage that culture does eat strategy for breakfast, and you are deeply committed to creating an organizational culture where it’s OK to question the status quo.”

Lt. Gov. Eleni Kounalakis, MBA 92, commended Lyons’ extraordinary talent for fundraising, recognizing the passion Lyons brought to Haas “and your belief and your faith in the business school and how effective you were at bringing other people along to help achieve the vision you set forth.”

Deep Berkeley roots

Lyons, who grew up in Los Altos, arrived on the Berkeley campus as an undergraduate. He earned his bachelor’s degree in business and finance with highest honors in 1982 and went on to earn a Ph.D. in economics from MIT in 1987. After six years teaching at Columbia Business School, Lyons returned to Berkeley in 1993 to join the faculty as a professor of economics and finance.

“No institution has come anywhere close to Berkeley in terms of shaping my life,” Lyons told UC Berkeley News this week. “There’s this favorite phrase of mine: ‘You can’t be what you can’t see.’ Neither of my parents had a four-year degree when I arrived at Berkeley. For so many reasons, in so many ways, I could have never seen the life I have lived were it not for my undergraduate years at Berkeley.”

As an international finance professor, Lyons was a six-time recipient of the Cheit Award for Excellence in Teaching—the school’s top teaching honor—and also won UC Berkeley’s highest teaching award in 1998. In 2006, he took a leave to serve as chief learning officer for Goldman Sachs, focusing on leadership development among managing directors and partners.

Lyons returned to Berkeley in 2008 to serve as dean of the Haas School of Business. During his tenure as dean, Lyons oversaw the construction of Connie & Kevin Chou Hall, a state-of-the-art academic building that opened in 2017. He also forged stronger ties with other UC Berkeley colleges and departments, with a focus on dual degree programs that combine business with STEM fields, including the new Management, Entrepreneurship, and Technology program with Berkeley Engineering.

man speaking at a podium in Haas courtyard
Former Haas dean Rich Lyons at the naming ceremony for Connie & Kevin Chou Hall, which opened in 2017. Photo: Noah Berger

While leading Haas, Lyons is perhaps most well known for his creation of four distinct Defining Leadership Principles that spurred a sweeping cultural initiative at the school that stands out in the minds of many.

“We had never made anything explicit,” about the culture at Haas, Lyons said in an interview with Poets & Quants in 2018. “That felt like a giant opportunity so I began to ask myself, ‘What would being truly intentional on culture look like?'” The values that emerged: Question the Status Quo, Confidence Without Attitude, Students Always, and Beyond Yourself, have inspired and influenced students and alumni alike.

Speaking at today’s meeting, Lyons noted how the Haas culture has spread across the Berkeley campus, so “that when the chancellor of Berkeley says we are all about questioning the status quo—this mindset that there’s got to be a better way to do this—nobody bats an eye because it’s part of where we come from.”

An innovative changemaker

In January 2020, Lyons became Berkeley’s first chief innovation and entrepreneurship officer. In that role, Lyons worked to expand and champion Berkeley’s innovation and entrepreneurship activities. To that end, he helped launch the Berkeley Changemaker program in 2020, which now boasts some 30 courses that help undergraduates see innovation and entrepreneurship in action. The courses have quickly become among the most popular academic offerings on campus.

Lyons is particularly proud of the startup ecosystem on UC Berkeley’s campus. When UC Berkeley took the top spot last year for the number of venture-funded startups founded by undergraduate alumni, Lyons said he wasn’t surprised, noting that support for UC founders has accelerated dramatically over the past 20 years.

Noting Lyons’ unique focus on innovation in science and technology, Dean Ann Harrison, who succeeded Lyons as Haas dean, said he exemplifies “what is uniquely great about Berkeley.”

“This will be a historic new era, building on the strength of the foundation set by Chancellor Christ and leading to ever-greater achievements for Berkeley and its community,” Harrison said.  “As my predecessor in the Haas deanship, Rich inspires me every day; as a friend and colleague, he enhances my life and that of everyone around him. I am truly delighted by this news and look forward to collaborating with him on a whole new level.”

Corporate sustainability reporting will move forward despite uncertainty, experts say

Viviana Alvarez Sanchez, former head of sustainability for Unilever North America, moderates the opening panel at the CFRM conference.

With the Securities and Exchange Commission’s long-awaited climate-disclosure rules blocked by litigation, public companies will continue to operate with a patchwork of laws and standards on sustainability reporting for the near future. 

But the consensus among the investors, corporate sustainability officers, accountants, CFOs, and standard setters who gathered at Haas in March was that markets have already moved,  with thousands of companies already disclosing information about their carbon emissions and climate risk exposures. In fact, many public and private companies are subject to new reporting regulations in California and the European Union, and investor pressure for increased transparency on climate risk disclosures and other sustainability issues will only continue. 

“We’re in a time of regulatory and macroeconomic uncertainty, but that does not mean corporate sustainability reporting is not marching forward,” said Professor Panos N. Patatoukas in his opening remarks at the CFRM 27th Conference on Financial Reporting. “What we measure is what we treasure. My hope is that improved measurement will lead to more efficient allocation of capital in society, which could, hopefully, accelerate the transition to a more sustainable economy.”

Professor Panos N. Patatoukas, faculty director of the Center of Financial Reporting Management (CFRM) and co-faculty director of the Sustainable and Impact Finance Initiative at Berkeley Haas.

The March 20 conference, organized by the Center for Financial Reporting and Management, was titled “Corporate Sustainability Measurement & Reporting: From Whether, to How.” It was co-hosted by the Sustainable & Impact Finance (SAIF) initiative. 

Former Haas dean and Professor Laura Tyson, former chair of the Council of Economic Advisers and a senior advisor to SAIF, gave opening remarks that stressed the importance of consistency for both companies and investors. 

 “This is incredibly important and it’s all happening right now,” Tyson said. 

Laura D. Tyson, professor of the graduate school and former Berkeley Haas dean

Tyson noted that in the United States, the discussion tends to be about actions that companies take that may have a financial consequence for investors—known as financial materiality. While materiality is the focus of the SEC’s proposed rules, it’s just one part of the discussion, she noted: The second part is non material items that may be important to society or shareholders.

“We have had for a very long time, organizing our financial markets, a set of acceptable standards for traditional financial measures,” Tyson said. “Every firm has to apply them. Every accounting firm has to make sure firms apply them. We need something like that in the standards for sustainability. I think we’ll get there, but Europe may get there before us.”

 The company perspective

The first panel of the day focused on companies’ perspective, featuring Joe Allanson of Salesforce, Claire Boland of Joby Aviation, R. Paul Herman, CEO of impact investing firm HIP Investor, Sydney Lindquest, ESG director for energy services company SLB, and Douglas Sabo, former chief sustainability officer for Visa.

“Concerns by society quickly turn into shareholder concerns,” Allanson, Salesforce’s EVP of Finance ESG, noted. 

One effect of the increased focus on sustainability disclosure is that accountants have had to move outside their traditional silos, communicating across companies more widely. He joked that the array of new rules from the SEC, California, and the EU amounts to a “full employment act for accountants.”

Assurance and verification

A panel on assurance included (from left to right) Anita Chan of KPMG, Marie Hache, ESG Partner at PwC, Deloitte Partner Laura McCracken, Mallory Thomas of Baker Tilly, and (not pictured) Trip Borstel of EY. They emphasized the importance of building trust through reporting that is relevant, reliable, and verifiable. 

The panelists emphasized the need to restore trust with a global baseline of corporate sustainability reporting that uses standardized measurements and definitions. 

“We’ve been on a journey, and the next five-to-eight years are going to be really interesting in terms of what happens with the SEC rules and the legal issues,” McCracken said.

Chan echoed Patatoukas’ remarks: “You can’t manage what you can’t measure.”

The panel discussion also highlighted the need for corporations to develop processes, incentives, and governance mechanisms that integrate traditional financial reporting with sustainability reporting.  

Andy Behar, CEO of As You Sow (above left), served as moderator. “Hope is not a strategy. We are starting to get action,” he said. 

Setting standards

Berkeley Law Professor Stavros Gadinis moderated a discussion on standard setting that included Verity Chegar of the International Sustainability Standards Board (ISSB), former U.S. Department of Energy advisor Kate Gordon, and Katie Schmitz Eulitt, of the International Financial Reporting Standards (IFRS) Foundation.

Despite the fear that we’ll end up with separate sustainability reporting standards—imposed by the SEC, the EU, and California—the panelists agreed that convergence on reporting standards is in everyone’s interest.  

“This is a global issue that doesn’t happen within boundaries,” said Gordon, who served as senior advisor to both U.S. Energy Secretary Jennifer Granholm and California Gov. Gavin Newsom. “There does need to be consistency for companies since they can’t parse the different rules.

Asked why climate risks should be singled out in audit reports above other risks—such as cyber threats or policy changes—Gordon emphasized that “climate risk is different because the risks are known, and they are predictable. They are already in the atmosphere from things we did 50 years ago or more.”

Even the election outcome won’t likely turn back the movement toward more disclosure, Schmitz Eulitt said. “Let’s just inhabit a world where the climate rule gets thrown out. My instinct is that if it’s a material issue, you have to disclose it. Investors are asking for it,” she said.

Gordon (center), with Chegar (left) and Schmitz Eulitt (right)

Investors’ perspective

The last panel of the day focused on the investors’ perspective and included Nuveen Senior Director Anthony Mark Garcia, Jonathan Hudacko, MBA 01, personal investing principal at Vanguard, Jamie Nulph, MSCI’s executive director of climate and sustainability, Anne Simpson, Franklin Templeton’s global head of ESG, and State Street’s Karen Wong, global head of ESG investing.  Patatoukas served as moderator.

Patatoukas emphasized that “climate risk, which includes both physical risks from environmental changes and transition risks related to moving towards a lower-carbon economy, is increasingly acknowledged as a significant investment risk.”

Wong said reporting standards are critical as more investors ask to incorporate sustainability metrics explicitly into their portfolios. “We have some investors who really care about climate change risk,” she said. “I think it’s important to provide a choice for investors. It’s their money, not ours.”

Asked about the strategy of divestment versus engagement, Simpson, who also teaches MBA, MFE and undergraduate classes at Haas, encouraged students who want change to embrace the complexity of the moment. “If you want to feel pure, roll up your sleeves and walk away,” she said. “If you want real change, you have to roll your sleeves up and get involved.”

Meredith Albion, FTMBA24 (right), worked for a credit ratings firm before attending Haas. She has focused much of her time at Haas on sustainable investing. She is currently a student principal of the Haas Sustainable Investment Fund and is a member of the SAIF Student Advisory Board.