Prof. Sameer Srivastava (right) listens as Danielle Feinblum of Deloitte Consulting presents on post-merger cultural integration. (Photo: Brittany Hosea-Small)
Strategies to build organizational culture in a world fundamentally changed by the pandemic were the focus as academics and executives came together at this year’s Berkeley Culture Conference.
The fifth annual conference, back in person after two years of virtual gatherings, was launched by Professors Jennifer Chatman and Sameer Srivastava in 2019. It is the flagship event of their new initiative to build a center of gravity for a new generation of organizational culture research—and ultimately, to help organizations function more effectively. Since then, the initiative has offered research partnerships and grants, forums and speaker events, and evolved to become the Berkeley Culture Center (BCC).
“Looking back at our start in 2019, we couldn’t have known that we were about to experience a global pandemic, widespread social upheaval, and massive changes in the world of work,” said Chatman, who is the Paul J. Cortese Distinguished Professor of Management and serves as Associate Dean for Academic Affairs. “With these rapid changes, it is more important than ever to understand how to help organizations build the most inclusive and effective cultures that will not only provide strategic clarity about ‘how we do things around here,’ but also help people stay connected to the mission and values of the company.”
“Looking back at our start in 2019, we couldn’t have known that we were about to experience a global pandemic, widespread social upheaval, and massive changes in the world of work.” —Jennifer Chatman
Prof. Jennifer Chatman (Photo: Brittany Hosea-Small)
“Our goal from the start has been not only to advance scientific understanding, with new data sources and methods, but also to make this work relevant to leaders at organizations around the nation and world,” added Srivastava, who co-directs the center with Chatman and is the Ewald T. Grether Professor of Business Administration and Public Policy. “As workplaces grow ever more diverse, and people work together in new ways, senior executives need to understand how to address the challenges that arise and how to lead change—particularly as they navigate the rapid technological and structural changes to workplaces that we expect in the next five years.”
Conference attendees listening to a presentation (Photo: Brittany Hosea-Small)
To support these objectives, Srivastava said BCC is in the process of launching two “megastudies”—randomized controlled trials of different culture-change interventions that are simultaneously implemented across multiple organizations. These will “yield rigorous insights into how leaders can proactively shape culture in the context of a rapidly evolving workplace.”
Srivastava and Chatman interview Ed Catmull, co-founder and former president of Pixar Animation. (Photo: Brittany Hosea-Small)
The 2023 conference included more than 25 presentations, with the first day focused on scholars from the fields of economics, psychology, sociology, and strategy. Day two brought together industry leaders with presentations on managing cultural change in hybrid environments, coaching leaders to be change agents, and the most effective approaches to diversity, equity, inclusion and belonging. Speakers included Scott Uzell, CEO of Converse; Harvard College Dean Rakesh Khurana; and Pixar Animation Studios Co-founder, Ed Catmull.
Chatman and Srivastava also introduced the Berkeley Culture Center’s first Executive Director, Kristen Barbarics. “I’m excited to see the center grow into its potential and, ultimately, create positive and powerful shifts in company culture across the nation and the world,” Barbarics said.
Conference organizers received a record 75 paper submissions this year, reflecting its reputation as a “go to” place for academics to share their latest research. They awarded the Edgar Schein Best Student Paper Prize to two doctoral students: 1st place went to Victoria Yiluan Zhang of MIT Sloan for “The Class Gap in Organizational Culture;” Laura Fritsch and Alan D. Morrison of the University of Oxford won second place for their paper “Organizational Culture, Vocabularies, and Attention: An Experimental Approach.”
Check out more photos of the conference. (All photos by Brittany Hosea-Small.)
Victoria Yiluan Zhang of MIT Sloan presents her award-winning paper.
Converse CEO & President Scott Uzell shared stories about building culture at the company.
Professor Juliana Schroeder shares her research on reducing polarization.
Assistant Professor Sa-Kiera Hudson chats with other attendees during a breakout session.
Haas Lecturer Bree Jenkins, MBA 19, asks a question.
Monica Stevens, MBA 96, of Spencer Stuart, discusses new DEI strategies.
Chatman and Srivastava with student paper winner Victoria Yiluan Zhang.
Chatman and Srivastava with 2nd place student paper winner Laura Fritsch.
Harvard College Dean and Professor Rakesh Khurana presents on elite colleges and social class.
Harvard College Dean and Professor Rakesh Khurana chats with Haas COO Courtney Chandler, who presented her research on university culture and faculty governance.
Srivastava and Chatman interviewing Pixar Co-founder and Former President Ed Catmull
Ed Catmull, co-founder and former president of Pixar Animation
Merrick Robinson Osborne is the first postdoctoral scholar hired in a new Berkeley Haas program focused on racial equity in business. Osborne, who grew up in Portland, Ore., studieshow organizations address (or don’t address) prejudice at work and how that impacts social hierarchy.
As a postdoctoral scholar, Osborne will research new ideas, collaborate with Haas faculty, and advise doctoral students,. He received a BA in psychology from the University of North Carolina at Chapel Hill before earning a PhD at the University of Southern California’s Marshall School of Business in 2022.
Osborne recently discussed how his family influences his work, his research findings, and his future teaching plans with Haas News.
Who are some researchers who inspired you?
At the beginning of my PhD program, I was fascinated by a lot of the work by Haas Professors Cameron Anderson and Jenny Chatman, and I’m still very interested in their work. But I also hold interest in how other fields of study speak to the work that I want to do. Recently I read Audre Lorde’s book Sister Outsider, which was provocative because it spoke to the way I’ve been seeing diversity efforts develop. She says that “Black and third-world people are expected to educate white people about our humanity. Women are expected to educate men. Lesbians and gay men are expected to educate the heterosexual world. The oppressors maintain their position and evade responsibility for their own actions”. I wanted to represent this in my field because I think it has a very practical application.
How do you see it applying?
There are a lot of social hierarchy-related questions in her book. How do white people see people of color explaining racism? How do these conversations that Audre Lorde describes lead to conflict? And how did that impact her status and power? I’m starting to see more intersections with my work outside of my own field, which is really exciting.
Your mom is an experienced social worker and therapist. Has she sparked any research ideas?
My mom, dad, and sister have all touched my research in different ways. My mom’s job as a licensed clinical social worker, and experienced therapist, is to dive under the surface and ask more about what her clients are experiencing. Part of what I want to do is understand the assumptions that we hold about the way our world operates and the way people operate together in the world. But I also want to challenge those assumptions. In talking with my mom, I get a sense for how I can start asking questions.
Merrick Osborne (left, at his sister’s commencement at Howard University) says his family helps inform his research.
My dad had a career in corporate America, where he was the first and only person of color. While rising to an executive position, he had to navigate a lot of issues that play out in the work that I am doing. He’ll say,”Oh, that actually relates to this experience that I had or that relates to something that I saw somebody else doing.” An important question is how to make the workplace a better place, especially for people who experience it as a dangerous place, or at least a mildly unsafe place.
An important question is how to make the workplace a better place, especially for people who experience it as a dangerous place, or at least a mildly unsafe place.
My sister’s interests have also shaped my research. She graduated from Howard University, an HBCU, before coming home to work in Portland. Very white spaces are not completely alien to either of us, and I think she has been comfortable moving back. But within that comfort, she does experience some discomfort. And a lot of discomfort that we share comes with being asked to do diversity work at work. Talking to her about her experiences has helped inspire and motivate me to develop research that speaks to her experiences, because I know she is not alone in having them.
What did you focus on during your PhD program?
My dissertation was on confronting prejudice at work, and what happens to a disadvantaged group member who witnesses an advantaged group member confront prejudice and then asks for that person’s input. There’s a lot of depth to it. For example, two men and a woman are in a room. One of the men says something problematic and sexist. The other man speaks up, but then asks for the woman’s input on what she experienced. I was curious about how one disadvantaged group member views these confrontations—when a man speaks up before the woman even has a chance to—and how that woman feels about being drawn into these spaces involuntarily.
At a broader level, when there is a display of prejudice at work, people look for insight about how to address that display effectively and increase inclusion. And oftentimes, they don’t know whom to turn to so they turn to people who they think are best suited for addressing prejudice, which are usually the people who are directly impacted by the prejudice display. I think that can be good, and that can be bad. It’s just important for us to really dissect what happens to the people whose input is sought, and the outcomes they experience.
What will you be working on at Haas in 2023?
A lot of my work now for the next month or two is going to be finishing up my work from USC. I do want to explore more with the folks here on how disadvantaged group members view diversity efforts more broadly. I’m excited to do that through avenues like the Culture Center that Jenny Chatman co-directs, but also through the research and teaching of Drew Jacoby-Senghor and Sa-kiera Hudson, who co-teach the new core course called Business Communication in Diverse Work Environments. I think it’s really important and nice to see the work that’s being done here up close and in person.
How do you feel about racial equity efforts at Haas, compared to other academic environments you’ve experienced?
Something I realized a couple of years ago is that the onus is on academia to make it clear that these are spaces where it’s safe for a marginalized person to operate in. What’s becoming increasingly challenging is learning how to signal that effectively. Part of what I hope for as a postdoc is that I can be a Black man who experiences success here. I want to show other people of color and marginalized people that they can come here and experience success and signal that to other schools too.
Something I realized a couple of years ago is that the onus is on academia to make it clear that these are spaces where it’s safe for a marginalized person to operate in.
Do you plan to teach?
I did an introduction to organizational behavior class for undergrads at USC. I enjoyed it, but I realized that I just wasn’t excited about it in the way that I wanted to be. That was in very large part because I felt like I wasn’t talking about things that really interested me. The MBA classes here include some really stimulating material both for the students and the professors who teach it. So I’m hoping that if I work hard enough, I can put myself in a position next year to teach.
Team: Matthew Parker (co-founder and CEO), Hamed Adibnatanzi (co-founder and head of legal), Noman Shaukat (co-founder), Marcus Rossi (COO), and Mandy Kroetsch (CMO), all EMBA 23.
Mandy Kroetsch met Matt Parker in the EMBA program while she was bidding on houses.
When Mandy Kroetsch met Matthew Parker last year in the Berkeley Haas MBA for Executives Program, she was juggling classes while bidding on houses in southern California.
“I was getting up at 4 a.m. and checking listings,” said Kroetsch, EMBA 23. “I found houses that came on the market before my agent even told me.”
Kroetsch started questioning the value of her real estate agent. Meanwhile, her challenges confirmed for Parker, a veteran Seattle real estate broker, that she probably didn’t need one.
So Parker decided to solve the problem by partnering with EMBA classmates to create startup Alokee. The company, which functions as a virtual real estate agent, empowers California home buyers to bid directly on properties.
The site is designed for people who grew up banking, paying bills, and shopping for most everything online without an intermediary, Parker said.
“Increasingly, Gen Z and other digital natives are baffled by why they have to talk to a real estate broker when they find all of the listings and tour the properties themselves and want to just make an offer,” Parker said.
“Increasingly, Gen Z and other digital natives are baffled by why they have to talk to a real estate broker.” —Matt Parker
Ease of use, money back
Launched nine months ago, the Alokee website is live in California, featuring photos of homes that have sold in San Jose and San Diego. The company plans to expand soon, and has a waiting list to beta test the site with customers in Washington, Oregon, Arizona, and Nevada.
Alokee’s selling point is its ease of use: Create an account, provide proof of funds for a down payment, and then “make 12-to-15 decisions” on offer price, a closing date, loan payment schedule and amount, and other sales decisions. A buyer could potentially be in contract to buy a house in a matter of minutes, Parker said.
Matt Parker, CEO of Alokee
A second benefit is that the buyer receives a chunk of the agent’s fee in cash back after a sale. In San Francisco, for example, where the agent commission on a home sale averages $40,000, Alokee takes a set fee of $9,000 and returns $31,000 to the buyer. “We don’t want to chase down the big commissions,” Parker said. He added that the check comes at a perfect time, as buyers typically invest the most in their houses—additions like solar panels, window replacements, energy-efficient appliances, and insulation—at the time of purchase.
An EMBA team
Parker started Alokee with classmate Hamed Adibnatanzi, a legal affairs veteran. Adibnatanzi used his law expertise to make sure that the mass of paperwork required for any real estate deal on the site was simplified for a direct buyer and met federal, state, and local requirements.
Meanwhile, the team is still sorting out the website’s technical complexities. Noman Shaukat manages the code behind the offers that flow through the site. “It’s a technical challenge, not a legal one for us,” Parker said.
Parker also asked Marcus Rossi, a former commanding officer with the U.S. Marines, to be Alokee’s COO and invited Kroetsch, a chemical engineer by trade, to join as CMO. “I told him I’d love to help,” said Kroetsch, who worked with a branding agency to come up with the name Alokee, which combines the words Aloha and key (meaning the key to a house).
“We are working through the marketing plan right now, and I am happy to be a part of this team,” she said.
Learning to scale
This is Parker’s second startup. He came to Haas after starting national home improvement repair and renovation service ZingFix. At ZingFix, he realized that there are different skills required to manage a company as it scales across state lines. “A quickly-growing startup was a new business challenge for me,” he said. “The more people that joined, the more I realized that I would need an MBA to take care of our stakeholders.”
Senior Lecturer Homa Bahrami coached the Alokee team.
Deciding on Haas, he said the program has provided priceless support for what he’s trying to achieve, from mentorship to participating in the UC LAUNCH accelerator program and competition, in which Alokee was a finalist. “Once you get to the finals of LAUNCH you get introduced to top-tier mentors and a storytelling coach. These people understand what you are doing, and they pick apart your business model,” he said. Senior Lecturer Homa Bahrami spent time coaching the team, helping them to develop a hiring framework. “Everything she told us was correct,” Parker said. “She’s probably in the top 10 smartest people I’ve met in my life.”
He added that Distinguished Teaching Fellow Maura O’Neill’s New Venture Finance course also helped them navigate as the company works to land a seed round of funding.
While saving homebuyers money is a goal, Parker said the company will build more gender and racial equity into the home buying process by giving buyers direct bidding power. “Homes are how people stay in power and get in power,” he said. “We want to give all people the power to win in the real estate game.”
While tech employment remains strong, a wave of layoffs is shaking up the industry. According to the tracking site layoffs.fyi, about 137,000 people have lost their jobs since layoffs started ticking up in May.
To find out more about what is driving this shakeup, we spoke with Saikat Chaudhuri, faculty director of the Management, Entrepreneurship, & Technology (MET) Program and of the Berkeley Haas Entrepreneurship Hub. Chaudhuri, an expert on corporate growth and innovation, mergers and acquisitions, outsourcing, and technological disruption, says the upheaval offers the opportunity for a reset and a chance to pursue growth in emerging areas.
The economy and labor markets are going strong. So why are so many tech companies laying off workers?
Many people are confounding two different things. We should not mix up the events specific to the tech industry with all the other issues that are going on in the broader economy due to the challenges of macroeconomic shocks, like Russia’s war on Ukraine, the aftereffects of the pandemic including supply chain problems, and the general inflationary pressures. The technology industry is also affected by those events, but there are additionally more fundamental factors at play.
“I am not worried about the jobs coming back. What we are seeing are structural changes. The jobs will be shifting, and will grow in up-and-coming areas.”
What’s happening in the tech industry is really a natural shakeout after over a decade of phenomenal growth. It is not unlike when the dotcom bubble burst in 2001. The sector was overheated and it could not continue as it had. The same is true now, as many startup and unicorn valuations skyrocketed over the last years, especially because the pandemic accelerated the growth to record levels as the deployment of technology and digital transformation became necessary everywhere. On the bright side, it’s actually not all bad. While I recognize that layoffs are painful for many people right now, the industry as a whole needs this adjustment to bring us to a path of more sustainable economic growth in tech. Because what was happening, especially with hiring over the last few years, was just completely unrealistic.
Meta laid off 11,000 workers in November, or about 13% of its workforce. (AP Photo/Godofredo A. Vásquez)
How did we get here?
During the pandemic, we went more digital. People worked remotely and they could work from anywhere—Hawaii, the countryside, anywhere. Tech became a big factor as the economy shifted entirely online: online retail, online banking, online instruction, online meetings, online therapy. It brought significant disruption to all industries.
We need to keep in mind that the pandemic was a different kind of economic crisis. Usually in an economic crisis, everybody loses, but that didn’t happen here. Some industries actually gained significantly, especially most of the technology sectors. The growth rate that they experienced, whether hardware, software, e-commerce, healthcare apps, fintech, crypto—you name it—was completely unsustainable. Just take a look at tech hiring last year: Tech job postings hit their peak in March 2022 and have been declining sharply since. We hit the point where the trend reverses. It was going to happen, either now or a year or two from now. It coincides with what’s going on in the overall economy and world politics, leading to a perfect storm.
“Once that first domino falls, it is easy for others to follow.”
This situation also poses a great excuse for employers. They say: A recession is coming. I will have to let people go.” Once that first domino falls, it is easy for others to follow.
Are you saying there was an inflation of the workforce inside the tech industry?
Yes. The reason for this is very simple: You don’t get penalized for growing your workforce while the sector is growing so fast. Everybody knows it will have to stop at some point, but there’s no penalty for riding the wave.
In fact, there’s a loss for your firm if you don’t ride the growth. If you said, “We should be more prudent because some sort of adjustment is going to happen,” there’d be no gain and you’d be losing out on the potential benefits—profits, funding, talent. Because when the correction happens, you can simply lay people off by the thousands. Two years later, the same people who got laid off will come back to the industry (whether at the same kinds of firms or new areas that emerge), and the same VCs will invest. There are no consequences for these actions. That’s just the way of Silicon Valley and the tech world, as they go through cycles.
In November, Amazon cut its corporate workforce by 10,000 people. (AP File Photo by Michel Spingler)
Is this correction just a tightening of the belt, or is the industry reorganizing itself to make room for a new wave of technologies that require new skills or a reallocation of resources?
There will be some reorganization happening, because some areas are growing faster than others. For example, Amazon decided that not all of its devices are doing so well. Companies have been carrying losses in some areas for a while. But it didn’t matter because there was so much growth overall, and they didn’t want to miss out on that wave. It is not unlike the dotcom bubble, where for instance network equipment companies were investing in an array of optical networking products that never properly worked, because regular routers and switches were minting money.
“A re-evaluation of talent needs will also play a role.”
Moreover, re-evaluation of talent needs will also play a role. I’ve been puzzled for a while about all the anxiety surrounding the shortage of software developers, and the salaries they were being offered in the mad scramble to secure such talent. So much basic programming work has become well-defined, codified, and routine that those skills can be learned at scale by a wider base of employees. If you think about it, thousands of software developers, even at companies like Microsoft and Google, are engaged to implement enhancements to products such as adjusting fonts or updating visuals or adding simple features—not product design or creation of new functionality. Those jobs don’t require computer science graduates, as IBM realized five years ago, when they began hiring non-college graduates with programming experience, at that time out of necessity.
In fact, there are tools now that can automate basic code writing, which are already being deployed. It won’t stop there, because we now also have algorithms which can do many sophisticated tasks; just look at Open AI’s ChatGPT, which is writing essays, poems, lecture notes, speeches, and other creative pieces at the click of a button!
Why now? Is there anything in particular that started this domino effect this year?
Now, with increased scrutiny from investors and others who look at a firm’s financial viability, this overstaffing approach is getting reined in. There have been excesses in view of rosy projections and seemingly limitless valuations. Now the bubble has popped, as it does in every tech cycle, and it’s been a great opportunity (and excuse) for firms to make adjustments, tighten their belts, and reduce their workforce.
The winning Cleantech to Market (C2M) teams celebrate after making their presentations on Dec. 2. C2M is a partnership between graduate students, startups, and industry professionals to help accelerate the commercialization of leading cleantech technologies. Over 15 weeks, each team and their subject matter experts spend nearly 1,000 hours assessing these leading-edge technologies and investigating a wide range of market opportunities.
Where do you see opportunities?
The next wave of growth will come from emerging sectors, like cleantech and green tech, new materials, breakthroughs in the life sciences, and novel products and services resulting from the maturation of general purpose technologies like AI. Just like the dotcom era was about the internet and all that it spawned—cloud services, big data, the internet of things, and other advances in information technology—there will be a wave of new technologies that will disrupt a lot of different sectors.
In many industries, the disruption has just begun and exciting new transformations are taking place that’ll unfold over the next decade—whether in education, healthcare, finance, automobiles, or aerospace, just to name a few. I am not worried about the jobs coming back. What we are seeing are structural changes. The jobs will be shifting, and will grow in up-and-coming areas.
“If I could give one piece of advice, it’s this: Don’t get sidetracked by group think and FOMO. To become a leader, you’ll need to be comfortable charting new paths and challenging conventional approaches.”
What does that mean for the students at Haas, and those considering an MBA?
For our own graduates, it would be healthy to see this as an opportunity. The most entrepreneurial people are the ones who look at these situations and say, “Change is good, and uncertainty has two sides. It’s what creates the opportunity for new things.”
Instead of defining your career in terms of a particular job at a particular company, you could think about which problem you want to solve. That is where you will find the opportunity to lead and to make a real impact.
It’s great to aspire to work your way up to an executive job at a large firm, and many of our graduates will do that and be very successful. Others will go against the grain. They will be the ones we hear about, because they actually change how Goldman Sachs works or McKinsey works or Google works for the next era. And of course there will be the entrepreneurs who will pursue startups that will redefine entire industries.
Take Stuart Bernstein, BS 86, former Goldman Sachs managing director and partner who shook up investment banking with his passion for clean energy and the environment. A true leader by definition changes things. That’s why we pay attention to them and learn from them.
A lot of our students come in wanting to make an impact early in their careers. What does it take to get there?
If I could give one piece of advice, it’s this: Don’t get sidetracked by group think and FOMO. To become a leader, you’ll need to be comfortable charting new paths and challenging conventional approaches. Leaders have confidence, without attitude—confidence in their vision and in their ability to make it happen, and the humility to learn and acknowledge challenges and risks.
The good news is, you don’t have to be born with it. An MBA program like Berkeley’s gives you the opportunity to develop that kind of confidence. You can train yourself to see the opportunity in ambiguity, embrace serendipity, and take intelligent risks.
Along the way you also learn key the business skills—finance, marketing, management, operations, and so forth—that you will need as a leader. All that will help you develop this vision for your path to make an impact, and the confidence and network to make it happen.
Winners of this month’s LAUNCH Startup Accelerator Demo Day.
What opportunities are there at Haas and Berkeley to get ahead of the next wave?
As part of our strategic priorities, we are building a new entrepreneurship hub at Haas that will be a game changer for our students and students across Berkeley. It will draw people from all over the campus. The great thing about Berkeley is that it has so many top-rated departments, and we will be able to bring them to one place to talk to each other and collaborate. So many of our Haas signature programs are about this kind of cross-pollination. Take Cleantech to Market’s partnership with the Lawrence Berkeley National Lab, or the Berkeley Skydeck accelerator, or the dual degree programs we have with Public Health, Engineering, Law, and that we are developing with the Rausser College of Natural Resources.
The most pressing problems of global society today require interdisciplinary perspectives. The hub we are developing will not only allow diverse people to connect, but it will provide them with the space and resources to create community, build their ventures, and be discovered by investors. What is novel is that we will not only support those who have a good sense of the entrepreneurial path, but also those who simply would like to be exposed to what it’s all about—the “entrepre-curious,” as we call them. And anyone from around the university will be able to drop in to simply ask an expert for guidance on how to navigate the vast innovation and entrepreneurship ecosystem at Berkeley based on what they need.
“While the tech industry is doing a reset, it may be a great time for you to do a reset as well.”
What’s your big-picture advice?
Silicon Valley is our backyard. While the tech industry is doing a reset, it may be a great time for you to do a reset as well. Beef up your skills, develop your leadership potential, build your network, and embrace your inner entrepreneur.
For physicians, it seems like a no-brainer: Management experts, often private equity firms, offer to take over the logistical and financial drudgery of their practices, leaving the doctors to focus on patient care.
A new Berkeley Haas study found that the business strategies used by physician practice management companies (PPMCs) also impact patient care.
The study, published in the journal Management Science, examined the strategies adopted by PPMC-owned obstetrician and gynecologist practices and found they influenced rates of Cesarean sections for low-risk patients.
Specifically, OB-GYN practices acquired by PPMCs that focus on patient and clinical management lead to significantly lower rates of C-sections. PPMC-owned practices that focus on providing financial management services lead to higher C-section rates.
“Even though PPMCs say they preserve physician autonomy, managerial changes do appear to influence physician treatment choices,” said study author Ambar La Forgia, an assistant professor at the Haas School of Business, UC Berkeley.
Value-based management vs financial management
La Forgia tracked three PPMC-owned practices that together accounted for more than 40% of Florida’s OB-GYNs between 2006 to 2014. One PPMC focused on attracting “value” based contracts, which link payment to clinical performance by providing clinical management services, while two focused on raising revenue by providing financial management services and negotiating higher-paying fee-for-service contracts, which link payment to quantity of services.
C-sections are more profitable than vaginal births because insurance companies typically pay out more in reimbursements. So a rise in the number of C-sections can raise a red flag, causing doubts about whether some of those performed on mothers at low risk for childbirth complications are necessary. Unnecessary C-sections can increase risks for both mother and infant in a myriad of ways.
Divergence in C-section rates
La Forgia found a remarkable divergence: The OB-GYN practice that focused on clinical management cut C-sections for low-risk women by 22%. Those that focused on financial management showed a 10% to 11% rise in C-sections.
“What surprised me was finding that one of these for-profit management companies lowered C-sections,” La Forgia said. “It’s a pleasant surprise that leads to a more nuanced story to tell, because you can’t make a blanket statement about PPMCs.’”
La Forgia turned to Florida to track how physician practices performed after a PPMC takeover because public information laws include hospital discharge records that allowed her to link patient records to individual doctors and practices.
Low-risk mothers
The study concentrated on records for 1.26 million women who were at low risk for C-sections (defined as single live babies born after 37 weeks to women with no prior C-section and in the vertex, or headfirst, presentation). The births were overseen by 1,693 physicians, with C-section rates of 24% for low-risk patients.
La Forgia also hand-collected marketing materials to track and parse the details of a PPMC’s management approach. For example, the PPMC that focused on clinical management advertised providing clinical data tracking and analytics to help standardize care and attract value-based contracts. “This was a forward-looking strategy because it can take a while to improve quality and negotiate these types of contracts, especially since they were not very common within the time period of this study,” La Forgia said.
Another notable data point: the two financially managed PPMCs performed more C-sections on privately insured patients than those insured by Medicaid, the government insurance program that typically covers people with lower incomes. Florida, La Forgia notes, is one of the few states where Medicaid reimburses physicians at the same rate for C-sections and vaginal births.
Growing influence of PPMCs
In today’s healthcare landscape, physicians generally have the option to keep running their own practice, sell to a hospital, or sell to a PPMC. Why choose a PPMC over a hospital? Autonomy, La Forgia said. Under hospital ownership, doctors typically become salaried employees of the hospital.
“PPMCs advertise themselves as an alternative to hospitals while still being relatively independent and getting to stay in private practice,” La Forgia said. However, “This research shows that even PPMCs claiming to preserve physician autonomy can alter clinical outcomes for better or for worse.”
The influence of PPMCs on patient care has only increased in the years beyond those covered by this study, La Forgia writes. By 2019, the three PPMCs she examined delivered roughly 1 in every 25 babies in the United States.
“Although I find that PPMCs influence C-sections regardless of changes in competition, the PPMCs do amass considerable market power, and their growth may eventually lead to more salient anticompetitive effects,” La Forgia writes in the study.
La Forgia noted that in recent years there’s been a noticeable shift in philosophy among some PPMCs to pursue value-based contracts over fee-for-service contracts.
“In fact, a lot of the [PPMCs] that originally billed themselves as financial management companies have changed their offerings to focus more on population health once they saw that this is a potentially lucrative angle,” she said. “That may be a good sign for patients.”
In a recent Dean’s Speaker Series talk, RockCreek founder and CEO Afsaneh Beschloss weighed in on the long-term goals of ESG and impact investing and how her firm allocates capital to diverse asset managers and underrepresented founders.
Global investment firm RockCreek holds $15 billion in assets to invest in a diverse portfolio that integrates sustainability and inclusivity. “I like to call (our investment strategy) air, land, and water, because a lot of what we have all worked on traditionally is energy on land and food and agriculture,” she said during a fireside chat with Dean Ann Harrison. “But there’s also a lot going on with aviation fuels and, as we speak, we’re doing some early investments on alternatives to aviation fuels.”
Before starting RockCreek in 2003, Beschloss worked in economic development at the World Bank, where she rose to become treasurer and Chief Investment Officer. (Along the way, she met Michele de Nevers, the executive director of Sustainability Programs at Haas. Dean Harrison also worked as an economist at the World Bank.)
During her early career, Beschloss shifted focus from health to the energy sector, leveraging private sector investment as her group worked on projects to move countries away from coal to natural gas. As solar and wind technology started to develop, the World Bank began pioneering investing in these areas. “We got special grants from the Nordic countries to work on this in a number of countries that were well-suited for doing solar and wind,” she said. “And it was really quite spectacular to be investing in Latin America, in Africa, and in Asia in these cleaner forms of energy in the early days and doing environmental studies.”
C2M is a partnership between graduate students, startups, and industry professionals to help accelerate commercialization of cleantech solutions. Over 15 weeks, each C2M team spends nearly 1,000 hours assessing leading-edge technologies and investigating market opportunities.
Last week, teams presented their findings, followed by an audience Q&A. Dean Ann Harrison also took the stage, interviewed by Financial Times correspondent Dave Lee about the school’s work to put sustainability at the core of business education.
This year’s winners of the MetLife Climate Solutions Awards included:
Niron Magnetics: The team won $20,000 for working on powerful, low cost, and environmentally-sustainable permanent magnets to free electrification from dependence on rare earth elements. The team included Andrew Cahill, EWMBA 23, Ben Brokesh, JD 24, Campbell Scott, MBA 23, Yiannos Vakis, MBA 23, and Sepideh Karimiziarani, MS 22, Development Engineering.
Team Niron Magnetics. Photo: Jim Block
GenH: The team won $10,000 for working on a rapidly deployable, fully modular hydropower system to electrify non-powered dams and canal heads to generate clean, stable, and cost-competitive renewable energy. Team members included Emily Robinson, EWMBA 23, Hon Leung “Curtis” Wong, MS 23, Development Engineering, Maelym Medina, MBA 23, and Santiago Recabarren, MBA 23.
Team GenH: Photo: Jim Block
Quino Energy: The team won $5,000 for working on scalable, non-flammable energy storage made possible by a proprietary zero-waste process that transforms coal and wood tar into designer flow-battery reactants. Team members included Dongwan Kim, MBA 23, Ingrid Xhafa, MS 23, Development Engineering, James Wang, MBA 23, Kennedy McCone, graduate student researcher, UC Berkeley College of Chemistry, and Noah Carson, EMBA 23.
Team Quino Energy was the audience favorite. Photo: Jim Block
The Quino Energy team also won the Hasler Cleantech to Market Award as audience favorite based on online polling throughout the day.
MetLife is a corporate sponsor of the C2M Program; The Financial Times served as an event partner.
The Haas Fintech Club is gearing up to host its first conference this Saturday, reaching out through the event to educate students, provide networking opportunities, and attract more diverse voices to the industry.
The conference, called Breaking into Fintech, will be held Dec. 3, from 10 a.m. to 3 p.m. at Chou Hall’s Spieker Forum.
The event includes speakers from Stripe, Chime, JPMorgan Chase, and Citi Impact Fund. Peggy Mangot, managing director of fintech partnerships and commercial banking at JPMorgan Chase, is the keynote speaker.
The Fintech Club, founded in 2016, now has more than 250 members, including 182 students in the full-time and evening & weekend classes. Each year, the club hosts the popular Fintech Speaker Series, treks to fintech companies, industry primers, and networking events. But this is the first year they decided to host a full conference to explore fintech’s range—from mobile banking and automated portfolio managers to peer-to-peer payment services such as PayPal and Venmo to cryptocurrency and blockchain technology.
Jennifer Tran, MBA 23
“Fintech has such a wide spectrum, which is why we want to break it down,” said Jennifer Tran, MBA 23, vice president of the club. “MBA students are always looking for what’s next, and fintech has had a huge buzz in the last five to 10 years, in particular.” Tran, who interned last summer at Apple in worldwide product marketing, said fintech holds incredible possibilities for financial inclusion and empowerment.
“As a child of refugees to the U.S., I saw firsthand how my family struggled to navigate the financial system and how that impacted their livelihoods and opportunities,” she said. “I want to make this space more accessible and responsive to the needs of those who have been historically excluded from it.”
Petra Nelson MBA 23, vice-president of the Fintech Club, said that while the industry dates back to the invention of the credit card in the 1950s, the Great Recession of 2007 helped push fintech into new territory. Nelson, who interned at PayPal in partnerships and development, said fintech is making the movement of money cheaper and faster for consumers and businesses alike.
Petra Nelson, MBA 23
“Before Haas, I worked in nonprofit fundraising and microlending, and saw how difficult it can be for some to gain access to affordable financial services and build intergenerational wealth. I’d like to be a part of changing that.”
“After the financial crisis is when we saw that there were problems with the way that our financial system was working,” Nelson said. “A lot of startups were born in that era, trying to fill in gaps and figure out how they could innovate upon the sector.”
Conference panelists will discuss payment infrastructure, as well as the crucial role of fintech startups, founders, and investors in the industry.
“We’re seeing a lot more players in spaces that hadn’t existed before,” Tran said.
There have been calls inside and outside the fintech industry to diversify leadership. Conference organizers are hoping to reach more underrepresented students and women, and provide plenty of opportunities for networking with Haas alumni and industry leaders.
Pearly Khare, MBA 23, role plays with his ‘boss’ and course instructor Bree Jenkins, MBA 19 during a class session. Photo: Brittany Hosea-Small.
Pearly Khare, MBA 23, was in a difficult spot. His ‘boss’ was confronting him about takingoff early for vacation, leaving his colleagues “in the dust.” “I definitely understand how that impacted the team,” he said, adding that he gave her and his team advance notice. Then he apologized.
Afterwards, MBA students who had watched the interaction discussed Khare’s apology to Bree Jenkins, MBA 19, who played the role of his boss.
“If we apologize, and we’re not even sure of what we did or we are not genuinely sorry for what we did, it can be another form of conflict avoidance,” says Jenkins, co-instructor of the new Berkeley Haas MBA pilot course Difficult Conversations: Conflict Lab, where students roleplay tricky situations that are dreaded at work. “We should ask ourselves if it’s just because we want to move past the discomfort.”
From delivering a poor performance review to providing a critical work project assessment to firing an employee, things often got “spicy” during the 10-week session, says co-instructor Francesca LeBaron, MBA 19. But the class isn’t about right or wrong or about debating morality. “It’s about maintaining connection, even when we disagree with the person,” LeBaron said. “What is your objective? Is it to make this person feel heard, to problem solve, or to share your own needs? And how effective were you at achieving that objective?”
The new Conflict Lab extends learnings from longstanding Haas School MBA offerings including Teams@Haas, which delivers a common framework for teamwork across MBA programs, and the core Leading People course. It also compliments experiential learning on conflict management included in the class Leading High Impact Teams and the new core course Communicating in Diverse Environments.
Do you want to be promoted?
Jenkins and LeBaron kicked off their new class with a speed conflict session (similar to speed dating) where students role-played a back-to-back series of conflicts to get a sense of the discomfort they would experience in the class. The exercise helped students to assess if this style of experiential learning was right for them.
The class asks students to address the hardest parts of receiving difficult feedback. Photo: Brittany Hosea Small.
Ten undergraduate UC Berkeley students and a group of Berkeley Haas alumni—ranging from PWC partners to a Google exec to an NYU professor—also joined the class to play roles that would put students in the hot seat.
In one session, alumna Kelly Deutermann, MBA 17, confronted Mridul Agarwal, MBA 23, about why he wanted to get off a project. Deutermann aggressively questioned Agarwal. “Do you want to be promoted? Do you want to be taken seriously? This is your chance.” When Agarwal explained that “it might not be the best project for me at this time,” Deutermann responded with, “This project needs to happen. Do you just not want to work hard to do it?” In this role play, Agarwal had to balance his own bandwidth and need for support with Deutermann’s demands for project management.
After the difficult talk, Agarwal took a deep breath, and the two of them laughed and shook their heads.
Friends coming up with solutions
Jenkins and LeBaron met in their first year at Haas. They were in the same cohort and found they shared a lot in common: They were both Consortium Fellows, student instructors for the Leadership Communications course, and board members for the Haas Center for Equity, Gender & Leadership (EGAL). After graduation, LeBaron went to work as an executive coach and mediator for startups at UC Berkeley’s accelerator SkyDeck; Jenkins runs leadership training courses as a senior leadership development associate at Pixar Animation Studios.
“I noticed themes and trends with what we were doing at work,” Jenkins said. “There was conflict avoidance and harm from conflict that’s not dealt with effectively. We talked to friends in other organizations and we realized quickly that everyone is dealing with workplace conflict.”
For example, LeBaron had recently coached startup founder and former Haas classmate Fahed Essa on how to fire someone. “Fahed is brilliant—has three masters degrees and has started three companies,” she said. “If he is still struggling with this, I bet many people are. I want Haasies to have this skill set that balances being compassionate with being honest and clear.”
After discussing the problem, Jenkins and LeBaron did what they were known for doing at Haas: they came up with a solution. With sponsorship from the Center for Social Sector Leadership at Haas (CSSL), they designed a syllabus for a pilot course completely devoted to managing difficult conversations. The class enrolled 32 MBA students, with a waitlist.
To track their progress throughout the class, students provide one another with feedback, write papers addressing their own conflict styles, and identify conflicts in the media and how they can be improved using lessons from the course framework. “It’s really important that the students find ways to continue to practice this work after the class is complete,” Jenkins said. “They should have a clear understanding of where they are in their conflict journey and what they want to do to continue to grow.”
During their final class, Jenkins and LeBaron took on a role-play with each other. Jenkins played a manager criticizing an employee for botching a critical client presentation. “I expected more of you,” Jenkins said. “I’m hearing that my actions didn’t meet your expectations. Can you tell me more about what that looked like for you?” LeBaron said. After more back and forth, they drilled down to the core issue: Jenkins was frustrated and disappointed because she wanted to appear competent in front of the client. The two decided to review all future presentations together before going to a client.
LeBaron asked the class to consider what Jenkins felt. “I don’t know if I made typos, but in her mind I made those mistakes,” she said. Her objective, she said, was to better understand her boss’ experience and unmet needs. “I can still hold my experience as true for me, while being curious about understanding her experience,” LeBaron said.
Students practice giving and receiving feedback after role-playing a difficult conversation. Photo: Brittany Hosea-Small.
Working past fear through practice
After the 10-week class ended, students who identified themselves as conflict-avoidant at the start of Conflict Lab said they were starting to work past it.
Daryl Pugh, MBA 23, an executive recruiter before he came to Haas, said he’s learning to be “comfortable with discomfort” and was already using what he learned in class to help a friend through the difficulty of laying off employees. “I tried to talk to her through having that conversation and processing other people’s feelings, understanding what was happening and her interpretation of what was happening. We had a couple of sessions.”
What Pugh said he found most surprising over the weeks was understanding how inaccurately he can interpret the actions of others. “We need to focus on not ascribing emotion to people that could be just wrong,” he said. “That’s how we are trained our whole lives, even in social settings, is to interpret other people’s feelings. The only way to know how a person is feeling is to ask. This class taught me how to get others to express their feelings, then I can move past my observations and interpretations to a new level of understanding.”
Mariam Al-Rayes, MBA 23, said the course provided a set of tools that she plans to use at work and beyond. “I wish we’d learned this earlier in life,” she said. “The role playing was so useful—like when alumni talked to us as our managers. It was realistic and we applied what we learned in class first-hand.”
On the journey to create a new class of conflict-embracing leaders, LeBaron and Jenkins are well on their way—and plan to offer the class again in Fall 2023.
A scene from the U.S. Capitol on Jan. 6, 2021, just before rioters stormed the building. (AP Photo/Jose Luis Magana, File)
During World War II, Americans came together. They ate less meat and planted victory gardens. They lowered thermostats and rationed their gasoline. Republican, Democrat—it mattered little: Against a common enemy, American civilians were willing to sacrifice on behalf of American interests.
That was 80 years ago, when the political climate was less rife with partisan animosity. In 1960, 10% of parents said they would be uncomfortable if their child married someone from the opposing political party. By 2010, that figure was 33%.
“Intuitively it makes sense that common enemies unite people. It’s a folk theory that goes back to ancient Sanskrit writings,” said Douglas Guilbeault, an assistant professor at Berkeley Haas. “Given the state of polarization today, the question is whether we can get Republicans and Democrats working together in the face of a common threat.”
In new research published in the journal Nature Scientific Reports, Guilbeault and six coauthors found the opposite to be true. The series of experiments found that exposing partisans to information about a common enemy instilled in Republicans a deeper distrust of Democrats than they started out with. The same was not true of Democrats in the study.
The experiments
The researchers recruited about 1,700 Republicans and Democrats between October 2019 and January 2020 to take part in a survey. Participants were sorted into three groups, and each read a different article from Reuters: one with a patriotic tilt about Fourth of July celebrations around the U.S.; another—chosen to evoke a “common enemy”—about how Russia, Iran, and China were conspiring against the U.S.; and the third a neutral article on early human drawings discovered in South Africa.
In the second stage of the experiment, participants were told they could earn additional money based on the accuracy of their response to the question: “What percentage of immigrants between 2011 and 2015 were college educated?” After they gave their answers, participants were given an answer supposedly generated by a member of the opposing political party. (In fact, it was generated by a bot programmed to give a “guess” that differed from the participant’s by roughly 50 percentage points.) Participants were then given the chance to revise their guesses.
“The extent to which someone used information from the other party to update their estimate gave us insight into cross-party cooperation,” Guilbeault said.
What they found was that only reading the “common-enemy” article about Russia, Iran, and China moved people’s guesses, and it appeared to increase animosity rather than bringing people closer. Specifically, Republicans who had read the article were less willing to use information provided by Democrats. The effect was stronger among those who described themselves as more conservative.
Real-world threats increase partisanship
The research project took an interesting turn when, on January 3, 2020, United States special forces in Iraq assassinated the influential Iranian general Qassim Suleimani. The news was saturated with the event and fear of war spiked domestically and abroad. That was midway through the researchers’ study and the events provided a natural experiment alongside the survey experiment—a real-time U.S. threat alongside the more abstract threat from a news article.
The researchers found that, after Suleimani’s assassination, Republican participants both identified much more strongly as American and were much less likely to cooperate with Democrats.
Asymmetric polarization
The finding that Republicans responded differently than Democrats may be explained by “asymmetric polarization,” Guilbeault said. A recent Pew Research Center survey found that Republicans were significantly more likely than Democrats to view the other party as un-American and a threat to the nation’s well-being (36% of Republicans versus 27% of Democrats).
The different parties’ views of what it means to be “American” may be what drove the different reactions, the researchers theorize. Even though a “common enemy” prompt might have pushed people to think of themselves as more “American” and moved them closer together, the presentation of an external threat may instead have further inflamed divisions.
“Because Democrats and Republicans appear to have very different definitions of what it means to be an American, then you can actually create more conflict by getting them to identify this way,” Guibeault said. “We find evidence consistent with that backfire effect here.”
(He acknowledged it’s also possible this particular threat resonated more with Republicans than Democrats, and results could vary with a different threat.)
Implications
The fact of contemporary polarization has been well documented in academia and the popular press. But what this polarization means for the health of the country remains uncertain. As Guilbeault and his colleagues demonstrated, one key implication is that partisan tensions, when strung high enough, can lead political rivals to see each other more as an external enemy than as a source of mutual strength.
This insight should have us on high alert going into the next election, which is slated to be one of the most polarizing yet, Guilbeault said.
“We saw it with COVID, where there was a common enemy and each party was simply pointing fingers at the other one,” he said. “Intensely polarized societies seem to create this backfire effect where, rather than bringing groups together, exposure to a common enemy makes them more likely to accuse each other of being on the enemy’s side.”
By Eaman Jahani (UC Berkeley), Natalie Gallagher (Princeton University), Friedolin Merhout (University of Copenhagen), Nicolo Cavalli (Bocconi University), Douglas Guilbeault (UC Berkeley, Haas School of Business), Yan Leng (University of Texas at Austin, McCombs School of Business) & Christopher A. Bail (Duke University)
Dean Ann Harrison (Photo: Copyright Noah Berger / 2018)
As a young economist, Dean Ann Harrison traveled the globe for the World Bank, lugging home reels of magnetic tape from mainframe computers that she gathered from census bureaus in developing countries. She poured over the data she collected, asking questions like: Does freer trade and globalization help or harm workers? Do wealthy multinational corporations help local economies by raising wages, or is it the reverse, and do they exploit cheap labor?
The academic work she produced, as a faculty member at Columbia University, Harvard University, UC Berkeley, and the University of Pennsylvania’s Wharton School, propelled her to become one of the foremost scholars in trade and development economics. She is now the world’s most highly cited scholar on foreign direct investment.
In 2019, Harrison took on a more public role with her appointment as dean of the Haas School, adding a new dimension to a career of serious scholarship that also included serving as director of development policy for the World Bank.
A new book, “Globalization, Firms, and Workers” (World Scientific Books 2022), collects Harrison’s path-breaking work on globalization, trade, and foreign direct investment into a single volume.
We sat down with Dean Harrison to hear more about her work.
Haas News: In the introduction to your new book, editors Keith Maskus and Jed Silver note that your work “shone a light on workers who were not the focus of academic studies in the past, including those in sweatshop industries or multinational firms that were pursuing low-cost labor around the world.” Tell us the backstory of how you came to this work.
Ann Harrison: I was always interested in international issues because I came from an international family. My father was American, my mother was French; I was born in France and French was my first language, and we always went back and forth between France and the U.S. As an undergraduate at Berkeley, I started off as a history major and I became fascinated by questions like: Why are some countries rich and other countries poor? Being a Berkeley undergraduate you naturally gravitate towards these kinds of questions. And then I became interested in the economics of these inequalities, and what we can do about them. By the time I graduated, my goal was to eliminate world poverty. I cold-called the World Bank, since that was their mission, and they told me the most effective thing I could do was to become an economist. So I got my PhD in economics and I started working at the World Bank.
You were working in developing countries at a time when data wasn’t all that accessible. How were you able to gather your data?
In the early- to mid-eighties when I started doing this research, you had to go to Washington and sit in Census Bureau offices to get national data. But as a World Bank staff member, we had more access to emerging market company data. The World Bank lends billions of dollars a year to emerging markets and we would go to countries to help them devise their policies. We supported them in their analysis, and they supported us in our research and data collection. That put me in a position where I was able to get access to census data sets that in the U.S. nobody had access to.
First I went to Caracas and visited their census bureau. I signed documents saying I wouldn’t release their data and they handed me reels of tape from mainframe computers. In some countries, the data sets weren’t so big, so I could get them on floppy disks. Later, they started making PCs, but they were really big and heavy, and I had to get on planes with these heavy computers. I would carry everything back to Washington and the technical people would help me figure out how to read the data. We worked on it for months and even years. I still have some of those tapes— in my basement and I might even have some in the storage closet in the bathroom of the Dean’s Suite.
How many countries did you visit for your research?
I don’t have a tally, but some of the places I went to are Guyana, Trinidad and Tobago, Saint Lucia, Morocco, Pakistan, India, Argentina, Chile, and Jamaica. I spent my 30th birthday in Saint Vincent and the Grenadines—that was nice. I’m sure there are more.
What’s your dinner party answer when people ask you, as a trade economist, has globalization left us better off or worse off?
Economists usually just add up all the winners and subtract out the losers and if the answer is greater than zero, then globalization is good for you. And I think it is true that, on net, it’s been good for a lot of countries. It’s been good for China, which is much richer than it was before. It’s generally been good for the U.S. in terms of access to cheaper goods and more efficient supply chains and opportunities to buy and sell things that we couldn’t have done before. But it hasn’t been good for everyone.
The big mistake economists made is that they underestimated how difficult it would be to compensate those who lost out from increasing global competition. The benefits of globalization hinge on us being able to use the gains to help those who are hurt. But that part of the policy package was not well executed. What could have been good for everybody just ended up benefiting parts of society and hurting others.
The term “globalization” has become a dirty word, synonymous with the loss of the working class, erosion of manufacturing jobs, and rising inequality. Right now we’re seeing a rise of right-wing populist leaders—such as Italy’s Giorgia Meloni—lashing out at globalization, gaining support from workers who feel left behind. How much can we blame the decline of manufacturing and good working-class jobs on globalization?
Technology and automation are replacing people beyond manufacturing—think Amazon fulfillment centers. If you’re educated, you’re doing pretty well, but if you don’t have a college education, you’re doing worse and worse. That inequality is largely being driven by automation. There’s no question that trade did play a role in undermining manufacturing wages. The pain is real. But I found that automation played a much bigger role. We know that’s true because even in China the percentage of workers engaged in manufacturing is declining and people are being replaced by machines. I would say about 75% of the decline is from automation and technology and 25% is from globalization.
You had a counterintuitive finding in one of your papers about Mexico. The assumption was that free trade would benefit workers in Mexico, but it was only the most skilled workers who benefitted while low-skilled workers lost out.
Yes, that’s right, because in order to benefit from globalization you need a lot of knowledge, skill and education. What happened is that Mexico’s unskilled workers were undercut by even lower-wage workers elsewhere in the world. It was a race to the very bottom.
It’s a really interesting case because Mexico put a lot of weight on going global. The leaders really believed that globalization was going to make them richer. The jury is still out.
What are some of your other surprising findings?
Here’s one that is surprising—at least to proponents of globalization. When multinational firms went into a country like Venezuela, the multinationals took away significant market share of the local companies. It may sound obvious, but a lot of governments still welcome investment by foreign firms because they think it will make them better off. What some of my research showed is that this market-stealing effect could be really big and it could hurt you.
The Chinese government figured this out a long time ago. They decided to only let in foreign firms if they partnered with domestic companies. And then eventually policy makers phased out all the benefits that they accorded to the foreign firms. Today foreign companies get no benefits at all in China. So while China understood this from the beginning, a lot of other countries, including the U.S., provided all these benefits like tax subsidies to incoming multinational firms. We thought about the benefits of investment but we didn’t think about the costs in terms of the foregone market share for domestic firms.
You also studied sweatshops.
I did a series of papers on the anti-sweatshop movement. The question was: If you target global companies that set up “sweatshops” and shut them down, what happens to the workers? Are they better off, and is it possible to get to a win-win outcome? What my research showed is that a win-win is possible if you encourage the companies that are already making huge profits to share more of those profits with the workers. But if you force companies that are barely profitable to share more of the meager profits they have, they might go under and workers will lose their jobs.
Another unusual finding looks at what happens when you get rid of special protection for very small firms. In India, 80% of workers work in really small enterprises, and intuitively you would think that removing protection for those firms would not be good for employment, wages, and investment. But it turns out that removing protections was really good for employment and wages because the government had been protecting firms that were so small that they wouldn’t ever get to economically efficient sizes. There wasn’t enough employment growth, wages weren’t high enough, productivity was low. When these laws, called small scale reservation policies, were phased out, wages and employment overall grew.
That was a form of industrial policy, which is another area you’ve studied closely. What is your overall conclusion about industrial policy?
I think there are good kinds of industrial policy and there are bad kinds. You don’t want to promote declining industries. You want to promote the emerging growth areas that are going to create a lot of great jobs tomorrow. What China has shown is that if you systematically promote advanced industries, you can move much more quickly. And so what China has done is given a lot of sectors an artificial advantage. China is not trying to prevent its steel industry from going under. They’re thinking about what are going to be the leading sectors tomorrow and trying to get a leg up there.
You’ve managed a rare career combining serious academic scholarship with public service and leadership. How has your academic work influenced your leadership as dean?
Great question. It has turned out that my three top priorities, innovation, sustainability and inclusion—which I refer to it as my ISI agenda—are the very things I focused on in my research. I don’t think it’s by accident. A lot of the research that I did over the decades was about what happens to people’s livelihoods when they’re exposed to trade and globalization. Who’s helped and who’s hurt? So I’ve always been interested in this question of inclusion and that’s something I’ve brought to my role as dean by prioritizing DEIBJ.
My long fascination with companies is based on questions such as how to identify the companies that are successful, and how to measure innovation at the company level. How do you create something better? So this focus on innovation and the creation of new companies or better ways of doing things is something that I’ve brought to my role as dean.
Right now I am really prioritizing sustainability. When you travel, you see first-hand the huge environmental issues that we’re facing. Access to clean water and access to clean air are fundamental challenges that countries face. Earlier in my career, I became a professor at UC Berkeley’s College of Natural Resources in Agricultural and Resource Economics. And before I became Dean, the last project I worked on looked at how you make environmental policies effective in emerging markets where compliance and enforcement are big challenges. I became interested in green industrial policy, which is industrial policy focused on sustainability and environmental economics. And then when I moved back to California, the first things I noticed were wildfires, drought, blackouts. That just reinforced the importance of sustainable policies. I’ve really taken all that research and background and I’ve used it here as Dean. I’ve gone back to my old contacts at the World Bank and the College of Natural Resources, and we’re partnering with them, and we are building sustainability into our core curriculum so that every Haas graduate can lead in this area.
You’ve talked a little bit about some of the mistakes that were made with globalization, and we’re now in a period of even greater inequality. Do you see any hope of reversing that?
That’s one of the reasons I took this job. I think public education is the solution. That’s the hope. We’re sitting on top of part of the solution right here.
Karan Singh, BS 05, said his career purpose didn’t become clear until a life-changing event 13 years ago.
“I was on the other end of a phone call after a loved one had tried to take their own life,” said Singh, COO of Headspace Health, during a recent Dean’s Speaker Series talk. “I’ve always thought of myself as a good read on people and a good judge of character, and I had no idea at all. I realized in a lot of communities of color—my family’s originally from India—that mental health is just the no-go zone. It’s the topic that no one talks about.”
That realization set Singh on the path to founding Ginger, a digital therapy platform that takes a preventative approach to mental health, in 2011. The company merged with Headspace, a meditation and mindfulness app, to form Headspace Health in 2021, a time of global need for mental health care services as the COVID-19 pandemic intensified behavioral health challenges.
During the DSS talk, Singh discussed the increasing level of investment in mental health care, and his excitement that more young entrepreneurs are joining him in mental health innovation.
“I want to say that mental health has made it into the forefront…I think we’re on that journey now. We’re having these conversations in rooms in government, in boardrooms, and in other settings that historically would never have been in the dialogue. So, we’ve come a long way, and still, there’s just a whole lot more we’ve got to do.”
The DSS talk was held with Google, part of a collaboration for The Haas Healthcare Association John E. Martin Mental Healthcare Challenge. The event marked the start of this year’s Challenge, which invites graduate student teams from around the world to develop creative solutions for improving the quality of and access to mental healthcare.
Haas Voices is a series that highlights the lived experiences of members of the Berkeley Haas community.
Determined to break into TV news, Courtney Smith, EWMBA 25, took a leap of faith in her 20s that led to a career in broadcast journalism.
Now a local news producer for KTVU Fox 2, Smith aims to push the boundaries of entertainment media, opening it to new technologies and most importantly to her, more diverse voices. Before coming to Haas, Smith was a member of the Forté MBALaunch 2021 cohort, a development program that provides a road map for applying to business school. Here’s our recent interview with Smith.
How did you get your start in TV news?
I was still a bit fresh out of college living in Houston, and applying for jobs but not really getting the response that I was looking for. One day I got dressed up, as if I had an interview, and printed out a bunch of resumes. I just said, ‘You know what? I’m going to take a leap of faith.’
I went to one of the local television stations, where I planned to drop off a resume. I met with the security guard in the lobby to drop off a resume and she told me I could probably chat with the news director. So I picked up the lobby phone and dialed. When someone answered, I got so nervous that I hung up! But then I called back, and told him I was interested in a position. He asked me curiously, “Are you in the lobby?” I laughed and said yes, and he told me to stay right there, he would come get me. It was the moment that opened doors for me.
What brought you to the Bay Area?
Around 2018, a news director from KRON-TV reached out. I initially turned down the opportunity because my mother had just had surgery and was recovering after battling kidney cancer. I thought awhile about the decision, prayed about it, and reached back out to the news director and said if the position was still available that I would love to take it. It was an opportunity that I just couldn’t refuse: to move to the Bay Area and work in this market.
Why did you decide to apply to Haas?
When I first visited the campus it felt like home, and I knew right away that this was the place that would change me for the better. I wanted to pursue an MBA to develop my leadership skills and hone my business skills. I had given it some thought before the pandemic, but once 2020 rolled around, I knew that it was time. With the racial reckoning that our country was going through, and the host of issues that the COVID-19 pandemic shed a light on, I felt a deep desire as a Black woman in media to do something that would have a lasting impact.
You are developing and assigning multiple story ideas daily with a team of 10 reporters, writers, and photographers. How are you juggling your job with your MBA program?
The life of a journalist and an MBA student is hard-work. I do keep a beautifully color-coordinated Google calendar that I swear by with alerts attached to almost every event. Notion and Goodnotes on my iPad are great, too. I also keep a written to-do list, where I jot down my top three priorities for the day, to-dos, and my wild ideas. I also write down things that went great in my day, followed by things that could have gone better. As a journalist, some of us work before most people are awake, or late into the night while others are enjoying dinner, or putting kids to bed. It’s a daily grind filled with deadlines you can’t miss. I have so much respect for the people working in my industry, as most people have no idea the sacrifices we make. I also think it’s so important in whatever your role is to give yourself grace. Life will always have its obstacle course days, so it’s important to be kind to yourself, especially as an MBA student so you can appreciate this journey and thrive.
Life will always have its obstacle course days, so it’s important to be kind to yourself, especially as an MBA student so you can appreciate this journey and thrive.
What is the most impactful or memorable story you have produced?
I was producing a live newscast in Beaumont, Texas, during the worst of Hurricane Harvey. I grew up in Houston so I’m very used to hurricanes, but this hurricane was devastating to so many smaller communities. I’ll never forget the voices of viewers on air that night. I worked to have local public figures speak to my news team on-air to get critical messages out, positioned reporters in hot spots where homes and buildings were hit the hardest, and dispelled myths that were beginning to surface throughout the evening in an effort to calm the community. Even when I wasn’t producing, I took the time to answer viewer phone calls. So many were in need of being rescued from their homes due to severe flooding. I did my very best that night to connect local rescue teams with those who needed immediate help.
What are your goals after graduating?
I have many goals, but one of them is to work for a TV network or streaming service as a CEO, president, or vice president. I also have a passion for entrepreneurship. I feel like the sky’s the limit and I’m open to all that life brings.
I would love to create more lanes of opportunity for diverse voices in TV & film. While there has been progress, there’s still a long way to go. I just want to be a strong voice and to make it easier for others to enter this industry, because there aren’t many women and men in positions of leadership who look like me. Increasing diverse leadership in any workforce improves it overall.
You’re clearly all about persistence, having started your career as an intern at Radio One and KPRC-TV in Houston before rising to producer in a top market. Where do you think that comes from?
I think it comes from being comfortable hearing the word no. If I have a goal that I just can’t stop working on, it’s one of those things that keeps me up at night. I’m going to keep trying and trying until I get a yes. I‘m open to criticism and I’m okay with putting myself out there as you can probably see from my crazy idea to walk into a building dressed as if I had an interview. I was truly walking by faith that day and said if it goes well then that’s great, and if it doesn’t, it doesn’t.
If I have a goal that I just can’t stop working on, it’s one of those things that keeps me up at night. I’m going to keep trying and trying until I get a yes.
What are some impactful classes so far at Berkeley Haas?
Data and Decisions with Professor Frederico Finan and Marketing with Professor Zsolt Katona are truly amazing classes that gave me ah-ha moments, confirming answers to questions I’ve had for many years. From day one in Data and Decisions I became a better journalist just by learning how to identify poor quality data that many people see on a daily basis in morning headlines. In my marketing course I enjoy learning about how customers value brands/products and services along with the amount of storytelling that goes on in marketing. Leading People and Microeconomics classes are also wonderful. Leading People with Professor Ambar La Forgia takes you on a journey of what it is like to be a corporate leader and how to handle the challenges that come along the way. I learned so much about myself from this course and the type of leader I want to be. In Professor Ricardo Perez-Truglia’s microeconomics course I gained a better understanding of why companies made certain business decisions and how to think like an economist.
What are you most passionate about in your industry?
I’m so inspired by our youth today, and I just want to be in a position to support them so they can have an outlet to showcase their creativity and grow into leaders in this space. It’s work that I’m very passionate about doing.
I’m also very excited about where media and entertainment and this whole new world of streaming is going. I just want to be a part of it, and become a leader in that industry, so that I can continue to develop storytelling for diverse voices and open more doors of opportunity for others, like how others did for me.
A wave of pay transparency laws aimed at reducing inequities is giving millions of workers access for the first time to information on what co-workers make and what potential employers will offer.
Yet comparing salary information is nothing new for employers. While U.S. antitrust law prohibits employers from directly sharing salary information with each other, most mid-sized and large companies routinely use aggregated data from third parties to get a read on the going rates.
The effects of this widespread practice, known as salary benchmarking, have never been systematically studied—until now. Following White House concerns that benchmarking may be used to suppress wages and benefits, a new study offers the first evidence on its impact on workers.
The conclusion: Benchmarking does not have a negative effect on pay for the average employee. While some salaries decrease and others increase after a company uses a benchmarking tool, salaries overall simply move closer to the benchmark.
“If there was a negative effect on salaries, it would be suggestive of anti-competitive effects,” said Associate Professor Ricardo Perez-Truglia, who authored the new National Bureau of Economic Research working paper with Zoe B. Cullen and Shengwu Li of Harvard University. “That’s not what we found. If anything, we see some small salary gains for low-skill occupations.”
The researchers used aggregated data from the nation’s largest payroll processing firm to see how much employers paid new hires in hundreds of job categories before and after they used the payroll firm’s salary benchmarking tool. They found that employers paid new hires much closer to the median wage after searching the market rates for those job titles.
As a result, some new employees earned more and some earned less than they would have otherwise. “For the most part, they sort of cancel each other out,” said Perez-Truglia.
Direct sharing prohibited by law
Although U.S. law prohibits employers from directly sharing information about their employees’ compensation with each other, they can access aggregated salary data from third parties such as management consultants and payroll processors. As part of the study, the authors surveyed human resource professionals who set pay at medium and large companies and found that 87.6% use salary benchmarks, usually from multiple sources.
In July 2021, Biden issued an executive order encouraging the attorney general and Federal Trade Commission to consider revising federal guidance that lets neutral third parties share compensation information with employers—but not employees—without triggering antitrust scrutiny. “This may be used to collaborate to suppress wages and benefits,” the White House said in a fact sheet.
At that time, there was no research on the impact of benchmarking. Perez-Truglia said regulators may be responding to studies and news reports suggesting that industry consolidation is giving employers too much market power when it comes to setting salaries.
The new study, which began in 2019, looked at starting pay offered to new hires at 586 firms that gained access to the benchmarking tool between January 2017 and March 2020. The online tool is easily searchable by job title and is based on real, aggregated and anonymized payroll records of many millions of employees.
The researchers divided the new hires into two groups: nearly 5,300 new hires where the company had searched the benchmarking tool before hiring, and a “control group” of 40,000 hires in the same companies that had not been searched. They compared pay for the two groups in the five quarters before and five quarters after the company first gained access to the salary data.
As a second control group, they looked at salaries offered to about 157,000 people hired during the same time periods in comparable roles at similar companies that never gained access to the more precise salary tool.
‘Compression toward the benchmark’
They found that on average, both high and low salaries moved closer to the benchmark. Among “searched” positions, the absolute difference between the new hire’s starting salary and the median salary for that position dropped from about 20 percentage points before the firm gained access to the tool to about 15 percentage points after. This drop is “large in magnitude, corresponding to a 25% decline,” the authors wrote.
To illustrate this “compression toward the benchmark,” suppose the median pay for a bank teller is $40,000. Without that information, one bank might pay $30,000 and another $50,000. “Once they see the benchmark information, they are much more likely to pay new hires around the $40,000 benchmark,” Perez-Truglia said.
The researchers added that “the effects on salary compression coincide precisely with the timing of access to the benchmark: The compression was stable in the quarters before the firm gained access to the tool, dropped sharply in the quarter after the firm gained access, and remained stable at the lower level afterwards.”
For searched positions, compression around the median wage was much stronger among low-skill positions, which generally don’t require more than a high school degree, than high-skill ones. Dispersion around the benchmark dropped by 40% for low-skill jobs versus 14.6% for high-skill ones.
“This finding is largely consistent with the anecdotal accounts in interviews with compensation managers, according to which low-skill positions are treated as commodities and thus should be paid the market rate,” the authors wrote.
They did a similar analysis looking at average salary levels and found that benchmarking “does not have a negative effect on the average salary. If anything, the effect on the average salary is positive, but small in magnitude and statistically insignificant.”
Specifically, they found the average starting salary for all searched positions was either 0.2% lower or 1.7% higher than the two control groups, respectively.
There were some statistically significant gains for low-skilled employees: Their average pay increased by 5% or 6.7% depending on the control group. The study also found that the small boost in salary for low-skilled employees increased their retention. More precisely, there was an increase of 6.7 percentage points in the probability that those employees were still working at the company one year later.
“This evidence suggests that firms may be using salary benchmarking to raise some salaries in an effort to improve, among other things, the retention of their employees,” the paper says.
For high-skill positions, starting pay went down by 2.9% or 1.6% depending on the control group, “but those effects must be taken with a grain of salt, because they are statistically insignificant,” Perez-Truglia said.
“Typically low-skilled employees are less likely to negotiate than high-skilled employees. They are often made take-it-or-leave-it offers,” Perez-Truglia said. Benchmarking could provide “more equality for those workers.”
There is also a growing body of literature on pay transparency, but much of it focuses on giving employees more access to information, usually as a way to reduce gender and racial pay gaps. A new law in California requires all private employers with 15 or more employees to provide pay ranges in all job postings starting Jan. 1. Colorado, Washington, and New York City have passed similar laws.Although employees can’t access the same kind of “super-sophisticated” pay data that employers can use, Perez-Truglia said, they can use online sources such as Glassdoor, LinkedIn, Teamblind.com and Levels.fyi to get a read on competitive salaries. Companies are also consulting these sites, he added, which generally rely on employees reporting their pay at current or past employers
Hands of senior woman choosing subscription or payment plan on tablet computer and paying with credit card
The market for online subscription services accounted for roughly $70 billion in 2021. A recent report suggests this figure will be $900 billion—more than ten times larger—by 2026. Though stories abound describing the consumer value of subscriptions, new Berkeley Haas research provides a novel insight into why businesses may also benefit from the model.
A recent article by J. Miguel Villas-Boas from Haas and Z. Eddie Ning from the University of British Columbia, published in the journal Marketing Science, reveals that subscription services often permit companies to reap the most profit from a given product or experience—a result that extends far beyond streaming platforms.
Villas-Boas offered the case of a luxury handbag company. “One option is to sell the bag and another option is to rent it,” he says. “We find that renting would be more profitable.” If a customer buys a bag and then realizes how much she likes it—realizes that she would, in fact, gladly have paid a higher price for it — then the company has left that money on the table. A subscription or rental program instead allows for a larger profit over time.
The article, which is rooted in a mathematical model of consumer decision-making, offers another key finding. When consumers are able to learn deeply about a product or service prior to purchase, then they are both slower to buy and more loyal; repeat purchases account for a larger share of their value. When most of the information about a product or service is instead gathered post-purchase, then the opposite is true: value is generated by the first purchase, which is less likely to be repeated.
For Villas-Boas, two important implications flow from this result. First, managers ought to consider where they focus their energies based on how customers learn about their products. If information is gained from owning a product or taking part in an experience, then managers should put their energy into generating that first purchase. If lots of information is available before purchase, then managers should invest instead in customer retention and repeat purchases. They should also do what they can to increase the availability of information through channels like online reviews. The research shows that online reviews are thus quite valuable to companies, in addition to their value to consumers.
Second, and more counterintuitively, companies that cannot offer a subscription can use high prices to defer consumer purchases. A high price, in essence, can be strategically used to force people to do more research before buying. This, in turn, makes it more likely that they will be satisfied with the purchase and become repeat customers.
“When the price is relatively high the consumer delays the purchase quite a bit until she finds really good information,” Villas-Boas says. “For products that last longer, you end up getting greater revenue by pricing higher.”
When Mike Smith, MBA 98, was 16 years old he mapped out a plan that would help achieve his career goal of becoming a CEO of a public company by age 42. But after working for a dot-com startup that would later go bust shortly after its launch, Smith learned quickly that the best laid plan doesn’t always work out.
“These [career] journeys are super windy, they’re rarely up and to the right,” said Smith. “My advice is to embrace the zig zags.”
Smith said he’s grateful for those who helped him build his career as previous COO of Walmart.com and Stitch Fix, and now as general partner and co-founder of venture capital firm Footwork. He spoke with MBA students and the Haas community about his career successes and failures, talent management, and cultivating a workplace culture at a recent Dean’s Speaker Series talk held on Nov. 1. The event was co-sponsored by the Berkeley Culture Center.
In his current role, Smith, along with business partner, Nikhil Basu Trivedi, backs early-stage startups focused on consumer technology, many of which are founded by BIPOC entrepreneurs and women. Their portfolio includes Table 22, an online tool that helps restaurants build subscription models, and Cradlewise, a smart crib that helps babies and their parents get better sleep.
The former Stitch Fix COO also talked about his experience with leading diverse teams, hiring employees who have forced him to be an excellent leader, and the value of mentorship.
Yiannos Vakis, MBA 23, co-president of the Haas Mobility Club, interned at Zoox.
As a strategy manager at self-driving car startup Zoox last summer, Yiannos Vakis, MBA 23, spent a lot of time thinking about the challenges of rolling out robotaxi fleets in cities.
“Watching self-driving cars navigate the complex streets of San Francisco is pure magic,” Vakis said. “But to commercialize at scale, the industry has big strategic questions to work on that no one has fully solved so far.”
Vakis, co-president of the Berkeley Haas Transportation and Mobility Club, is among a growing number of students drawn to the rapidly-changing and fast-growing transportation/mobility industry. At Berkeley Haas, interest in the sector reflects that growth, with eight students in the Class of 2022 taking full-time jobs in the industry, (up from previous years), and 15 students in the 2023 class accepting internships. One lure, aside from the fun of being immersed in new technology, is the impressive pay. Mean base salaries for the 2022 FTMBA grads reached the higher end of the school’s employment report, coming in at $152,000 with a mean $23,000 bonus.
The Haas Mobility Club is hosting its annual Haas Mobility Summit 2022 Saturday, Nov. 5, at Chou Hall’s Spieker Forum.
Doug Massa, a relationship manager in the transportation and mobility sector for the Berkeley Haas Career Management Group, said the rise in interest comes at a time when companies that spent years on the technical aspects of building their products and services are looking to scale.
Doug Massa, a relationship manager in the Berkeley Haas Career Management Group.
“That’s why these companies are recruiting strong MBA talent,” Massa said. “MBA roles like corporate strategy, product management, and operations are what get our students excited and these are the types of roles that they’re landing.”
Many current students are meeting and networking through the Haas Mobility Club, which is hosting its annual Haas Mobility Summit 2022 Saturday, Nov. 5, at Chou Hall’s Spieker Forum. The summit, UC Berkeley’s largest transportation-focused conference, focuses this year on “reimagining sustainable and accessible mobility,” with senior executives from Zoox, Rivian, General Motors, Spin, Autotech Ventures, and others joining. The student-run Haas Mobility Club, now more than 175 members strong, welcomes graduate students from beyond Haas—in the Engineering, Data Science, and Urban Planning programs.
Disrupting industries
As the market has heated up, Massa said he’s fielding about 20 calls a week from first and second-year students who want to talk about job opportunities in transportation. In addition to Uber and Lyft, Massa helps students recruit for roles at upstarts as well as big automakers like GM and Ford, electric auto leaders like Tesla and electric adventure vehicle maker Rivian, and autonomous vehicles like Cruise.
Minjee Kang, MBA 23, interned at Rivian.
Haas Mobility Club member Minjee Kang, MBA 23, landed an internship in strategic operations at Rivian. Kang, who worked in operations at Air Korea before coming to Haas, said her goal and her reason for getting an MBA is to be part of sweeping industry-wide change.
“I believe the airline industry is going to be disrupted soon, just like Uber and ride sharing disrupted the traditional auto industry,” she said. “I think the transportation and mobility industry is facing a variety of opportunities as a whole, and I want to be a part of it.”
Sarah Thorson, MBA/MEng 23 and co-president of the Haas Mobility Club, interned at Nvidia.
Sarah Thorson, MBA/MEng 23, who studied mechanical engineering as an undergraduate, landed an internship in product management at Nvidia, where she worked on autonomous vehicle development tools.
Thorson said she’s always been pulled to the technical side of the auto industry and knew she could study both business and engineering in her dual degree program. “I wanted to come to Haas to explore a product role in tech and to learn about the impact of technology innovations on transportation and mobility,” said Thorson, co-president of the Haas Mobility Club.
Investment opportunities in transportation also lures MBA students. Logan Szidik, MBA 23, pivoted toward early stage venture capital investment at Haas, working as an intern at Menlo Park-based Autotech Ventures.
Logan Szidik, MBA 23
“With companies staying private longer than ever before, private capital has an outsized impact on the future of the automotive industry,” he said. “As someone with a deep interest in technologies addressing the climate crisis, I wanted to better understand how investors approach start-ups focused on emerging spaces like vehicle-to-grid and fleet electrification.”
Alumni ecosystem
As more Haas grads move into transportation, the alumni community has expanded, with about 180 members of the Haas Mobility Network’s WhatsApp group.
That community includes transportation industry entrepreneurs like Ludwig Schoenack, MBA 19, co-founder of Kyte, a cars-on-demand service, and Arcady Sosinov, MBA 15, CEO of FreeWire, which makes fast electric vehicle chargers and battery generators. Both Bay Area companies have found success in raising $239 million and $230 million respectively, to expand their businesses.
This rich alumni network will continue to serve students well, Massa said. (Carlin Dacey, MBA 22, for example, recently joined Kyte as a market manager)
“The network has led to internships and full-time jobs,” he said. “It’s become a really nice ecosystem.”
Afraz Khan, MBA 23, has led a life driven by faith, community engagement, and social activism. Prior to business school, Khan served as an outreach coordinator for the ACLU’s Racial Justice Program and wed interracial and interfaith couples within the Muslim-American community as owner of Muslim Wedding Service. In this interview, Khan, an LA native, discusses his journey to memorize the Quran, his activism and social enterprise work, and why he decided to study business.
What brought you to Haas?
I joined Muslim Wedding Service in 2017 as an officiant. Our focus is providing qualified officiants who work alongside interracial and interfaith couples to craft culturally inclusive wedding experiences for all those in attendance. In 2018, I took over the enterprise and have built it out to a team of about 25 officiants. We conducted 120 weddings last year across the U.S. and, given our business is a social enterprise, we successfully donated $50,000 to nonprofits and social services over the past three years. My thinking was, “Let me come to business school to get a better sense of how business strategy and revenue models are used to build sustainable funding streams.” The hope is to incorporate that type of approach into social enterprise work, where we can sustainably fund the types of initiatives that would help tackle some of our current social issues.
My thinking was, “Let me come to business school to get a better sense of how business strategy and revenue models are used to build sustainable funding streams.”
Tell us about your family background.
My parents immigrated from North India in the 1980s to Los Angeles, where I was born and raised with an older sister. Growing up, we were pretty attached to the local Muslim community, which was primarily immigrant and South Asian. My parents prioritized faith and building connections with immigrants from that same background.
Afraz Khan weds couples with interfaith backgrounds as owner of Muslim Wedding Service.
How did you connect to America and LA from that space?
Until Kobe and the Lakers, my family had little attachment to American culture. However, we really started getting into basketball in the early 2000s when the Lakers were winning championships. I have a lot of memories of watching games with my family and listening to them on the radio. It helped me feel more connected to the broader American culture claiming the Lakers as a piece of our own. Also pivotal was 9/11, when I was in second grade. After 9/11, there was a push for us to demonstrate more of our patriotism. It was understood that you had to have an American flag in front of your house. I remember people in our community not sending their kids to high school because there were instances of racial targeting and Islamophobia.
How did 9/11 change your life?
One moment comes back from eighth grade. I was sitting in class and the clock struck noon and the teacher was in the middle of his lecture. My watch started beeping and this student yelled from across the room, “Watch out! He’s [Afraz] got a bomb.” Most of the kids were laughing. The teacher didn’t really say much, and I was frozen, not knowing how to react. But there wasn’t much addressing of the comment or an acknowledgement that it wasn’t appropriate. In high school, I was one of maybe five or six Muslims in a school of over a thousand kids. It was hard to understand how I, as a Muslim American, was supposed to integrate into this larger society. Islam felt foreign to the American experience, and there was not really a place for my faith identity to exist. This othering continues to persist.
It was hard to understand how I, as a Muslim American, was supposed to integrate into this larger society. Islam felt foreign to the American experience, and there was not really a place for my faith identity to exist.
You began memorizing the Quran in fifth grade and have continued religious work as a teacher and advisor. What drove that commitment?
A big part was this general desire to build a closeness with my faith and take ownership over my relationship with the divine. I spent eight years memorizing the Quran, which also included taking a gap year before college. As an undergraduate student at NYU, I found for the first time a large community of native Muslim Americans also trying to understand their journey with faith. I started deliveringsermons and facilitating classes at our Islamic center on campus and unexpectedly fell into a role in providing the community with something I hadn’t had while growing up: a person who possessed the lived experience of growing up Muslim in America and could draw upon deeper sources of knowledge of the faith in demonstrating how Islam can actually serve as a source of empowerment.
I found for the first time a large community of native Muslim Americans also trying to understand their journey with faith.
Where did you work after your undergrad program?
I spent a year in New York City government conducting community affairs work, and then the next three years at the ACLU’s Racial Justice Program, focusing on advocacy and outreach. I was doing some organizing work around changing the disorderly conduct statutes in the South. These were policies designed to provide law enforcement broad discretion in criminalizing students of color for typical youth behavior—like when a kid purposely burps in class or doesn’t sit in an assigned seat. Law enforcement was charging these kids with disorderly conduct. We were working to help dismantle that policy, starting a lawsuit and organizing. But we had to shift our priorities at a certain point based on the desires of our funders to focus on a different issue within criminal justice. It’s tough when you know the on-the-ground realities, but the folks providing the funding have a different view. So, there was that lack of agency plus the reactionary way in which a lot of nonprofits understandably need to behave that pushed me to think more about business as a potential force for good.
What relationship does your faith have with your activism work?
In 2016, our country bore witness to the continued murder of unarmed Black bodies at the hands of the police as well as a spike in xenophobic and anti-Muslim sentiment and attacks. In organizingseveral university-wide rallies alongside various allied minority groups, I started to learn how the same white supremacist institutions that govern this country uniformly and uniquely impact different marginalized communities. In learning from organizers and advocates who have dedicated their lives to social change, I sought to utilize my own lived experience of being Muslim in America to focus on dismantling broader systems of oppression. As activist Lilla Watson says, “If you have come here to help me, you are wasting your time. But if you have come because your liberation is bound up with mine, then let us work together.”
What’s a principle of your faith you seek to incorporate in your day-to-day work?
In 4:135, the Creator commands me “to uphold justice and bear witness to God, even if it is against yourselves, your parents, or your close relatives. Whether the person is rich or poor, God can best take care of both. Refrain from following your own desire, so that you can act justly—if you distort or neglect justice, God is fully aware of what you do.”
This verse pushes me to reflect on justice as a universal principle that exists outside of ourselves. A commitment to justice actually starts with a willingness to interrogate our own unjust behavior. This requires a strong development of humility and self-awareness which I believe is key to any movement work.
How have you continued your activism work at Haas?
I’m focused on leveraging the clout and influence of Haas to bring light to issues that otherwise aren’t discussed within elite institutions and circles. Through Haas Hearts, a student-led non-profit consulting program, I got to work with and now currently serve on the board of Urban Compassion Project, an Oakland-based grassroots organization dedicated to empowering unhoused populations. Over the past few months,we’ve organized volunteer events for Haasies to attend as well as hosted an on-campus discussion on the current housing crisis in the Bay Area and what our role as MBA students is in supporting those fighting for change.
Additionally, I’m working to expand Haas’ engagement with the broader UC’s union organizing efforts. Currently, a few of us student workers here at Haas are phone banking, tabling, and canvassing to build people power within our program to support the 48,000 UC student employees across the state who are fighting for a more fair and equitable contract.
Afraz Khan began rapping his student government speeches in grade school.
You recently performed a rap at Haas that highlighted the disconnect between how history is taught in the U.S. and the realities that shaped your heritage under British colonial rule. When did you start rapping?
In third grade I wanted to run for student government vice president. I wrote a first draft of my speech and my teacher told me that the presentation was boring and that I should rewrite it. My sister suggested rapping the speech and came up with a very simple rhyme and I was like, “What the heck?” and performed it. I was so nervous that I didn’t look away from my paper. I ended up winning. I ran for VP twice more and for president and just kept rapping all my speeches throughout middle and high school. At the end of high school, I started getting more into spoken word and slam poetry, using rap not just as a tool to have a fun experience but to also share more about my own narrative and experience.
For those who are curious, here’s my original rap:
Vote for me for VP/ — I’ll be the best, you can put me to the test/ — Yyou won’t regret and that’s a bet, it’s a promise that will be kept/ — Iif I win, I’ll put a spin to the school year that’s bright and clear/ – Sso don’t forget and put a check, next to the best… Afraz!
Watch Afraz Khan performing “Colonization of the Mind” last month at UC Berkeley’s Center for Equity, Gender, and Leadership (EGAL)’s annual EGALapalooza event.
What made you want to revisit your study of clusters of innovation?
In my first book, we outlined and demonstrated how innovative technology companies tend to emerge in clusters in certain regions—and we questioned what drives that process. The world has since entered a period of severe economic, cultural, and environmental disruption due to an ongoing series shocks. We wanted to investigate what was happening in these innovative communities and whether they demonstrate enhanced resilience. We found that the answer was a profound “yes”. Clusters of Innovation demonstrate an entrepreneurial agility that enhances their resilience to external shocks, contributing significant social and economic value to society.
How do they do this?
Through innovation, which I define as the positive response to change. Trends are obvious, especially technology trends which tend to be of relatively long duration. While a tech trend is not in itself innovation, its adoption into a valuable good or service is. Commercialization of such tech trends is often pursued by venture-capital backed entrepreneurial firms. Their initial market entry strategy is often to approach niche markets that provide a beachhead opportunity because incumbent firms are not serving their needs exactly. So smaller firms gain traction by providing these niche markets with products and services that provide a tight product market fit. Many entrepreneurial firms that blossomed in the midst of the pandemic were prepared for years before the pandemic. Their work in refining their technology and products put them in a position to provide solutions of huge impact quickly when the pandemic hit. This agility enhanced the resiliency, as they were already in the market with a limited but proven track record—so their businesses were positioned to explode into an “overnight success” when the shock occurred.
Can you provide examples of this?
Two clear, and very different, examples are Zoom in telecommunications and mRNA vaccine development in health care. Zoom had an innovative business model and mRNA developers embraced deep technology innovation. Zoom displaced slower- moving Cisco (WebEx), Microsoft (Skype/Teams), and other incumbents in revolutionizing business, personal, and education communication. Zoom became a verb, a place, a way of conducting much of our daily life. Zoom’s quick mass adoption revolved around a subtle business model innovation: Product-Led-Growth [PLG]. PLG is an evolution of the freemium model, where ease of user adoption is emphasized (just click the link, no log-ins, no hassle) and is often free. Traditional marketing is initially de-emphasized and that investment pored back into product development and viral marketing. Revenue evolves eventually from upselling to universities and larger businesses with value-added full-featured SaaS subscriptions. This ease of adoption drove the rapid behavior change that enabled a greater collective agility and a greater resilience.
A different type of innovation-driven agility is demonstrated in mRNA technology, which enabled the creation of vaccines in months rather than many years. Startups commercialized the novel mRNA vaccine technology, based on university research, before the pandemic. While the fundamental technology was revolutionary, its impact on the health of the general population was minimal. But during the pandemic, the benefits of this novel approach and the urgent need for a vaccine made its advantages clear, gaining the full attention major pharmaceutical firms. The rapid development and deployment of the various Covid-19 vaccines often depended on partnerships with major pharmaceutical companies, providing a perfect combination of speed and scale. The smaller firms’ product development speed combined with the larger firms’ capacity to scale trials, manufacture, and distribute.
What’s the takeaway from the book?
Economic regions such as Silicon Valley and other Clusters of Innovation around the world have proven to have enhanced resiliency to economic and environmental shocks. At the heart of such Clusters of Innovation are entrepreneurs, collaborating with venture investors and major corporations. Their constructive interactions build the resiliency required to quickly adapt and rebound from shocks. The process is helped by supportive government, universities, service firms, and other supporting actors in the community.
Karan Singh, BS 05, said his career purpose didn’t become clear until a life-changing event 13 years ago.
