Berkeley — A team of researchers who developed tools for investors, academics, and businesses to measure economic risks from the loss of the planet’s biodiversity has won the inaugural Berkeley Haas Sustainable Business Research Prize.
The new $20,000 prize, which recognizes research with the greatest potential to spur immediate change in the face of environmental crises, has been awarded to the paper “Biodiversity Risk” by Stefano Giglio of the Yale School of Management, and Theresa Kuchler, Johannes Stroebel, and Xuran Zeng of New York University’s Stern School of Business. (Read paper summary.)
Giglio says he and his co-authors are honored to receive the inaugural prize and hope it will encourage further research and practical change.
“While research in the field of climate finance has been expanding dramatically over the last few years, a lot more work needs to occur to ensure that the ideas developed in academic research find practical applications in the business and policymaking world,” Giglio says. “This is even more important for topics like biodiversity risks and its financial implications, where much less work has been done so far.”
Actionable research
The prize is administered by the Berkeley Haas Center for Responsible Business (CRB) and was launched with the support of Allan Spivack, MBA 79, to encourage serious scholarship with real-world business applications related to responsible business, sustainability, and ESG (environmental, social, and governance) issues.
The judging panel’s focus for the prize’s inaugural year was on papers that investigate economic levers to motivate individuals, corporations, and markets to act with urgency on climate and resource-saving initiatives. The winner was selected from a competitive field of 63 papers submitted by academic researchers around the world.
Berkeley Haas Dean Ann Harrison, a noted economist, served on the judging panel. “Thank you to our winning researchers for calling attention to the emerging area of biodiversity risk. All too often, groundbreaking academic research fails to gain traction or get put into practice in the ‘real world,’” Harrison said of the prize winners. “Rewarding research with direct implications for business and policy is another way that Berkeley Haas can help stem the multiple environmental crises we are facing.”
Defining biodiversity risk
The winning paper noted that humans rely on biodiversity to thrive. For example, diverse ecosystems are key to food production, while medicines are derived from natural compounds found in plants, animals, and microorganisms. Yet damages caused by the loss of ecosystem services alone—such as the supply of raw materials like food and fuel—have been estimated as high as $20 trillion per year, according to the paper.
Using surveys, news coverage, and analysis of 10-K statements, the researchers developed multiple measures of biodiversity risk. They determined that it is a separate phenomenon from climate risk and concluded that the energy, utilities, and real estate sectors are most exposed. They also concluded that biodiversity risks are partially reflected in stock prices over the past decade.
The researchers recommend that businesses regularly monitor and report how their activities affect the biodiversity of the areas where they operate, both directly and indirectly. It is also important that these data are aligned with emerging standards and regulations.
The paper has immediate applications: Investors can now use the scholars’ findings to better understand how biodiversity risk affects current and future business performance and take better-informed positions on industries and specific equities. At the same time, researchers can use the new measures to delve more deeply into impacts in economics, business, and human welfare, the co-authors say.
Three finalists
In addition to the winning paper, the judging panel—comprising sustainability researchers and practitioners affiliated with Haas—chose three finalists:
“Cost-Efficient Pathways to Decarbonizing Portland Cement Production,” by Gunther Glenk, Harvard University and University of Mannheim; Anton Kelnhofer, Technical University of Munich; Rebecca Meier, University of Mannheim; and Stefan Reichelstein, Stanford University and University of Mannheim.
The researchers developed an economic model for identifying cost-efficient pathways for decarbonization. Read full summary.
“CRISK: Measuring the Climate Risk Exposure,” by Hyeyoon Jung, Federal Reserve Bank of New York; Robert Engle, NYU Stern School of Business; and Richard Berner, New York University’s Stern School of Business.
Figuring out how much risk financial institutions face from climate change poses challenges. To address these challenges, the authors suggest using market-based metrics. Read full summary.
Corporate America needs to decarbonize due to its massive contribution to climate change, but how? This paper seeks to understand the most effective way of closing the emissions gap by exploring if corporations can be left alone to govern themselves or if subnational (city and state) government policies should contribute to this fight.Read full summary.
The prize is part of Dean Harrison’s three strategic priorities for the Haas School: sustainability, entrepreneurship, and diversity, equity, inclusion, justice, and belonging (DEIJB). As the top public business school, Berkeley Haas is committed to addressing sustainability challenges by preparing its students to lead the transition to a sustainable and inclusive economy through designing and implementing new business models, policies, and solutions.
Professor Nancy Wallace, a national expert on real estate finance and strategy, mortgage-related securities, and pricing models, has received the 2024 John M. Quigley Award—the highest honor of the American Real Estate and Urban Economics Association (AREUEA).
Prof. Nancy Wallace
The award, named for the late Berkeley Haas professor emeritus and leading urban economics scholar John M. Quigley, recognizes scholars who best represent the ways in which Quigley advanced the academic fields of real estate, urban economics, public finance, and regional science.
“The medalist must have produced a record of scholarship that opens up new avenues of inquiry, have a demonstrated record of mentorship of young scholars, have supported institutional advances within these fields, or have been particularly effective at dissemination of these fields to public and professional practices,” said Stijn Van Neiuwerburgh, outgoing president of AREUEA. “Nancy embodies all of the ideal traits of the Quigley Medal winner.”
Wallace has been at Berkeley Haas since 1986, where she is the Lisle and Roslyn Payne Chair in Real Estate Capital Markets, chair of the Haas Real Estate Group, and co-chair of the Fisher Center for Real Estate and Urban Economics, and directs the Real Estate and Financial Markets Laboratory.She is a national leader in her field, having served as an advisor to the Federal Reserve and the U.S. Treasury on financial crises and reform. Her research focus includes residential house price dynamics, mortgage contract design and pricing, securitization and asset backed security pricing and hedging, lease contract design and pricing, methods to underwrite energy efficiency in commercial mortgages, and valuation models for executive stock options.
On campus, Wallace received the 2021 Williamson Award, the top faculty honor at Berkeley Haas, and earned the Berkeley Faculty Service Award in 2019 for work helping the campus navigate complex financial and real estate issues.
Wallace will receive the award and discuss her scholarship as the keynote speaker for the 2024 Midyear National AREUEA conference in May.
More than 250 business leaders and academic researchers gathered at Berkeley Haas from Jan. 9-10 for the sold-out Culture Connect Conference, sharing challenges and insights on creating high-performing, inclusive cultures in the age of generative AI and hybrid work.
The sixth annual conference, organized by the Berkeley Haas Center for Workplace Culture and Innovation (BCC), featured talks by top leaders from IBM, Lyft, Pixar, LinkedIn, Hubspot, and other leading companies, along with hands-on workshops and discussions. It was led by the center’s Co-Founding Directors Jennifer Chatman and Sameer Srivastava, and organized by Program Director Audrey Jones.
Chatman, the Paul J. Cortese Distinguished Professor of Management at Haas, said she was struck by the stories leaders shared of trying, failing, and trying again as they have experimented in real time with AI and hybrid work.
“My biggest takeaway is that an experimental mindset is critical as organizations approach these very significant changes that everyone is facing today,” Chatman said. “Organizations are going through seismic shifts in how they are thinking about and conducting work. The conference was fascinating because leaders shared their stories—the good and the bad—as they navigate these changes.”
Photo: David Ho
This was the first year the conference was open to the broader public beyond invited presenters and BCC partners. Attendees included about 100 academics and 150 industry leaders from a diverse range of industries, including health care, biopharmaceuticals, media, tech, financial services, film, government, and nonprofits. Seventy companies represented.
“The combination of research-backed evidence from academics and practical advice from seasoned industry leaders is difficult to bring together but when it happens, it yields a level of insight that could not be achieved by either perspective alone,” added Srivastava, the Ewald T. Grether Professor of Business Administration and Public Policy. “We’re immensely grateful to every speaker, workshop leader, facilitator, and participant who contributed to making this a meaningful event of learning and connecting.”
Photo: Jordan Joseffer
Day 1: Diverse perspectives on organizational culture academic research
The first day of the conference emphasized research, with presentations from 34 scholars from around the world who examine culture through the lens of sociology, social psychology, and economics. Keynote talks included Paul Ingram of Columbia on how people tend to conceal social class identities; Doug Guilbeault of Berkeley Haas on how gender biases tend to be stronger and more persistent in online images than in text; Anita Williams Woolley of Carnegie Mellon on how the drivers of collective intelligence in teams differ from individual intelligence; and Leo Bursztyn of the University of Chicago on how to create social change by correcting misperceptions about prevailing norms.
Former Haas Dean Rich Lyons, Associate Vice Chancellor and Chief Innovation & Entrepreneurship Officer at UC Berkeley, and Laura Hassner, executive director at UC Berkeley Innovation & Entrepreneurship, reported on the success of the UC Berkeley Changemaker program, a campus-wide certificate program including about 30 courses addressing critical thinking, communication, and collaboration—and enrolling about 20% of undergraduates.
Doctoral student Yingjian Liang of Indiana University Bloomington won the Edgar Schein Best Student Paper Prize. Second place went to Danyang Li of Berkeley Haas.
Day 2: Deep dives into three key themes
Future of work and hybrid workspaces
Photo: Jordan Joseffer
The second day of the conference was attended by about 200 industry leaders and academics. HubSpot CEO Yamini Rangan, MBA 03 (left), sat down with Chatman (right) for a fireside chat. Rangan said companies should treat culture as a product that management consistently refine. “You have to evolve your culture every day, every week, like a product,” Rangan said. She also emphasized the importance of building a team of leaders, rather than building a leadership team to make culture inclusive. “Culture is how people behave when leadership is absent,” she said. Nicholas Bloom, an economics professor at Stanford, shared data on how firms are adapting to remote and hybrid work across different sectors of the economy. Bloom noted that the effect of remote work on productivity has been neutral, while the impact on productivity has been typically positive. “Organized hybrid has won,” he said.
Kristen Sverchek, president of Lyft, detailed the company’s journey with hybrid work, and Martine Haas, a management professor at the Wharton School, offered a framework for thinking about a firm’s hybrid culture.
Photo: Laura Counts
In a fireside chat with Srivastava (above right), Laszlo Bock, CEO and co-founder of Humu & Gretel.ai (above left), discussed how to help employees find meaning and connection while using hybrid work models. Bock, who formerly worked in People Operations at Google, shared an impactful exercise used at Google: Find three or four interesting stories about people within the company, and brief execs on these stories again and again so that they retell the stories. These stories aren’t PR, he said—they will resonate to help give a sense of a strong, cohesive culture.
DEIB focus
Photo: Jordan Joseffer
Shifting focus, Co-founder, Coach, and Consultant Kia Afcari (above left) moderated a roundtable on diversity, equity, inclusion, and belonging.
During the discussion, Reema Batnagar, vice president of people at Pixar (2nd from left), emphasized the importance of using personal stories as a way to foster inclusion and belonging at work. David W. Kim, chief DEI officer at NetApp (2nd from right), discussed why corporate leaders must maintain the momentum of their DEI efforts despite recent pushbacks. David Pedulla, a sociology professor at Harvard (right), highlighted the extent to which various forms of discrimination still persist in the labor market.
Sa-kiera Hudson, an assistant professor at Haas (middle), shared recent research findings that emphasize the importance of understanding intersectionality, specifically how gender and race can work together to amplify or dampen various forms of bias. Hudson emphasized that people are complex and we should never assume that their experience within a group is aligned with their perceived identity.
Photo: Jordan Joseffer
CreativityPartners Chief Associate Chris Bell (above left) and Co-founder and CEO Jamie Woolf (above right) led a workshop on how to create a sense of belonging through mutual storytelling.
Generative AI’s transformative role
Photo: Brandie Brooks
In a fireside chat with Chatman (above right), Nickle LaMoreaux, chief human resources officer at IBM (above left), described how she and her colleagues have been harnessing AI to transform the role of HR in the organization.
Photo: Jordan Joseffer
MIT Professor Kate Kellogg (above middle) and Warwick Business School Professor Hila Lifschitz-Assaf (aboove left) discussed a generative AI field experiment conducted at Boston Consulting Group. Hatim Rahman (above right), an assistant professor at the Kellogg School of Management, shared research on the importance of technological certification in the labor market.
Photo: Jordan Joseffer
Teuila Hanson (above left), chief people officer at LinkedIn, emphasized the need to take a people-centric approach when adopting AI tools and technologies, since human skills—including human intuition that AIs lack—are critical. “The future of work is still human,” she said.
Institutional ownership of U.S. corporations has increased ten-fold since 1950. New research from Haas shows this trend has political implications.
Closeup of the U.S. Capitol on a $50 bill (Adobe Stock)
The finance world has witnessed extensive consolidation over the past several decades. Institutional investors owned just 6% of publicly traded U.S. companies in 1950; in 2017, they owned 65%. The “big three” of BlackRock, Vanguard, and State Street Global Investors held 5% of S&P 500 shares in 1998 and more than 20% by 2017.
For Matilde Bombardini, an associate professor at Berkeley Haas who has spent her career studying political influence, this trend raised a novel question. “If this is a phenomenon in the financial markets, where institutional investors are controlling increasingly large shares of the landscape, maybe there are also political implications,” she says. “Does this concentration in ownership translate into concentration in the so-called political market?”
The answer, she shows in a recent co-authored National Bureau of Economic Research working paper, appears to be yes. The researchers, who include Francesco Trebbi of Berkeley Haas, Marianne Bertrand of the University of Chicago, Raymond Fisman of Boston University, and Eyüb Yegen of the Hong Kong University of Science and Technology, looked at the connection between institutional ownership and political contributions. They found that political giving shifts following a large acquisition: For newly acquired firms, the correlation in giving to politicians favored by the investor increases by up to 70%.
“Following this one event, campaign contributions start moving closer together, in a sense,” Bombardini says. “These acquired firms start giving to politicians that the institutional investor gives to.”
Acquisitions and influence
The researchers collected data on investors that manage over $100 million in assets and on portfolio firms in which these investors have holdings. (The dataset covers the years 1980 to 2018.) They looked specifically at moments when an investor acquired 1% or more of the outstanding shares of a given portfolio firm.
In tandem, they matched names of investors and portfolio firms to their political action committees (PACs) using data from the Federal Election Commission. These PACs—574 connected with investors, 2,456 with portfolio firms—could in turn be connected to campaign contributions to specific candidates.
They found that large acquisitions were accompanied with a significant movement in giving toward the investors’ favored PACs, with the correlation between investor and portfolio firm increasing by 30% to 70%. The researchers noted that this realignment in donations comes at a time when giving, in general, is on the rise: Investment firms increased political expenditures by nearly a factor of six between 1980 and 2018. This trend implies that more money is coming from a smaller number of voices.
“Of course, one interpretation could be that investors acquire companies that are already like them, so the causation goes the other way,” Bombardini says. To test this interpretation, the researchers looked specifically at index funds, which make their acquisitions in order to replicate an index, like the S&P 500. That means these purchases were required at a specific and unplanned moment, so they are unlikely to be the result of political strategy or like-mindedness.
“We zero in on these kinds of acquisitions that are more random and still find the effect,” Bombardini says. “That helps alleviate the concern over causality.” They also found that the change in giving was driven primarily by portfolio firms moving toward investors and not the other way around.
Tough to regulate
Alongside the political implications, Bombardini and her colleagues describe potential trouble that these results raise for the realm of corporate governance. If portfolio firms are subtly nudged by their investors to contribute to politicians or political issues that are not directly tied to their business, that could derail profit maximization.
“These firms might just keep adding politicians to their roster that are not germane to their business,” Bombardini says. “So, you have a case of misaligned incentives.”
She emphasized that these types political donations would not be the result of explicit pressure from investors. Rather, they would be the result of an implicit understanding that by giving to preferred political candidates a firm could receive favorable treatment down the road.
But for Bombardini, the concerns over democracy are graver. For one, she wonders, does this soft influence show up in other domains? Are these same trends visible in lobbying dollars, or charitable giving, based on the concentrated heft of institutional investors? Perhaps more urgently, how might this subtle avenue of influence be reined in?
“Federal law is very clear on the fact that you cannot make political donations on behalf of someone else, but it’s not likely that the investor is asking the portfolio firm to donate,” Bombardini sayd. “This kind of quieter influence is hard to regulate, but we should at least be aware that this concentration of influence is happening. It should bring us back to the general questions that surround regulating campaign contributions.”
Senior Lecturer Andrew Isaacs teaches the Climate Change and Business Strategy class at Haas, which just launched a concurrent MBA/Master in Climate Solutions degree. Photo: Jim Block
The new program, enrolling for fall 2024, will allow full-time MBA students to earn both a Master of Business Administration and a Master of Climate Solutions degree in five semesters, or two-and-a-half years. The application deadlines for the first MBA/MCS cohorts are January 4, 2024, and March 28, 2024.
The MBA/MCS degree is designed for early-career professionals who plan to take their careers to a higher level of business leadership, grounded in understanding of sustainability and climate change challenges and opportunities.
Berkeley Haas Dean Ann Harrison said the new program will draw from the strength of both schools, allowing students to learn from some of the world’s top minds in climate change,sustainability, and business.
“Future business leaders will require a depth of training in both business and climate change to work across disciplines and execute competitive strategies,” Harrison said. “This new program will provide a breadth of skill sets, equipping our grads to lead in building a sustainable, low-carbon future.”
“Future business leaders will require a depth of training in both business and climate change to work across disciplines and execute competitive strategies.” — Haas Dean Ann Harrison.
The program aims to develop critical skills and knowledge in climate data science, carbon accounting, and lifecycle analysis, as well as technological and nature-based solutions.
Students in the MBA/MCS cohort will spend the first year completing MBA core coursework at Haas before moving to classes at Rausser. The rigorous MBA curriculum includes courses in leadership, marketing, management, finance, data analysis, ethics, and macroeconomics, along with sustainability courses.
Doubling down on sustainability
Under Harrison’s leadership, Haas has doubled down on sustainability through the creation of the Office of Sustainability and Climate Change and by revamping all of the MBA core courses to incorporate thinking about climate change and other sustainability challenges.
The new MBA/MCS degree program follows Rausser’s launch of its new Master of Climate Solutionsdegree. MCS courses will translate the fundamental science and groundbreaking discoveries of UC Berkeley experts, enabling professionals to learn how to evaluate technologies, develop just climate strategies, and remove barriers to implementing practical climate solutions. The MCS core curriculum includes teaching in the climate and environmental sciences, climate economics and policies, technological, business and nature-based solutions, training in analytical and quantitative skills, and applied exercises and engagements that emphasize adaptive thinking and problem-solving.
“The Master of Climate Solutions represents a critical step forward in expanding the interdisciplinary and highly interconnected community of practitioners needed to solve the climate crisis,” said David Ackerly, dean of UC Berkeley’s Rausser College of Natural Resources. “Students in the concurrent program will be able to leverage the critical climate knowledge and tools taught in the MCS, as well as the leadership and business skills that are core to Haas.”
“Haas and Rausser both have such impressive track records in climate research,” added Michele de Nevers, managing director of the Office of Sustainability and Climate Change at Haas. “This program combines our offerings at the master’s level, with a keen focus on professional students, who are clearly positioned to make an immediate impact, and who serve a critical role as translators of academic insights and enacting these insights in the world.”
Addressing the Climate Challenge
All MBA/MCS students will participate in a semester-long capstone program that gives students the opportunity to partner with organizations operating across the business, government, and non-profit sectors. A unique leadership course on organizational, political, and societal change for climate solutions will prepare students to be change agents and leaders in businesses, nonprofits, and government agencies.
“New research on climate solutions is still critical, but we already know many of the things we need to do to address the climate challenge,” said James Sallee, a professor in the Department of Agricultural and Resource Economics and faculty director of the MCS program. “What we really need are people spread throughout society and the economy who are in a position to take action on climate, and who are equipped with the tools to make the right choices. Educating those students is the vision of the MCS program.”
Summer internships are also crucial to the MBA/MCS program. Students will complete two summer internships, which will allow for deep immersion in different disciplines and more time to build relationships.
Haas now has four dual degree programs, including the MBA/MPH (public health), the MBA/MEng (engineering), and the MBA/JD (law).
Gearing up to welcome a new year is the perfect opportunity to look back at highlights from 2023 at Berkeley Haas. A toast to 2023 wouldn’t be complete without marking the big celebrations, distinct milestones, grand achievements, and more than a few welcomes (alongside some farewells). In no particular order, here are our Top 10 picks for 2023.
125 years of reimagining business: We celebrated a BIG milestone with a big party on the 125th anniversary of the day that Cora Jane Flood announced the gift that launched the College of Commerce—now the Haas School of Business. Students, staff, alumni, campus and Haas senior leaders, and founding donor Flood’s family member gathered to honor the school’s trailblazers —and our ongoing impact on business and society
Dean of the Year: Dean Ann Harrison was recognizedby the business school publication Poets & Quants, which lauded Harrison for leading a major diversity, equity, inclusion, justice and belonging effort; broadening the profile of the Haas faculty, school board, and student body; and helping fundraise a total of $227 million for the school, among other successes. She also made the cover of our fall issue of Berkeley Haas Magazine. Harrison returns from sabbatical in early January.Harrison gracing the pages of Berkeley Haas Magazine. Photo: Brittany Hosea-Small.
More major milestones:Berkeley Executive Education(BEE) celebrated its 15th anniversary and Cleantech to Market (C2M) turned 10. Exec Ed has provided top programs to thousands of individuals in leadership, entrepreneurship, and strategy and finance, as well as customized programs for companies, government, and university partners. Promising climate technologies that addressed everything from water desalination to Earth element extraction to lightening-fast battery charging took center stage at a bigger and better than ever December Cleantech to Market (C2M) Climate Tech Summit.
Students in the Cleantech to Market program at the 2023 C2M Summit.
Our generous community: The Berkeley Haas Development and Alumni Relations team (DAR) team reported a record three-year period in the school’s fundraising history, raising more than $171 million from alumni, faculty, staff, students, parents, and friends. The funds raised this fiscal year—about $56 million—brought Haas to the finish line of its five-year campaign.
Photo: Noah Berger
5. Undergrad’s big shift: We began to bid farewell to our incredible two-year undergraduate program as the Berkeley Haas Undergraduate Program Office received its first round of applications from prospective first-year students for our inaugural Spieker class. The first class of four-year students will enter in the fall.
Dean Ann Harrison with Ned Spieker, BS 66, who with his wife, Carol, funded the undergraduate program’s transformation.
The rise of the Flex cohort: As part of the evening & weekend MBA program, students in the Flex cohort completed their first year of live remote courses, demonstrating an innovative educational model that will serve a greater range of students. Flex provides what many students say they need most: schedule flexibility in a top program.
New brain power: Eight new ladder and 22 professional faculty members joined Haas in fall, bringing their intellect, passion, and unique perspectives to the school. With the new tenure-track arrivals, the ladder faculty—at 96 members—is now the largest it’s ever been and is closing in on Dean Harrison’s goal of 100. From top row, left to right: New Berkeley Haas assistant professors Eben Lazarus, Cailin Slattery, Shawn Kim, Antoine Levy, Sam Kapon, Erica Bailey, returning professor Alexandre Mas, and new assistant professor Rachel Gershon.
Making headlines: Our faculty were featured in national media outlets more than 500 times this year, bringing expertise to everything from the rising price of gas, to the Silicon Valley Bank fallout, to tech layoffs, to the future of AI.
Image: AdobeStock
Growth space: Construction continued on the new Berkeley HaasEntrepreneurship Hub, which will allow entrepreneurs at Haas—and across the university—to meet, brainstorm, and invent new startups. The Hub is expected to be completed in fall 2024.
A photo illustration of the home of the new hub, a Julia Morgan designed building under renovation. The building was constructed in 1908.
The C2M summit, held at Spieker Forum in Chou Hall on Dec. 1, brought together eight UC Berkeley graduate student teams (including many Berkeley Haas MBA students). All photos: Jim Block
Promising climate technologies that address everything from water desalination to Earth element extraction to lightening-fast battery charging took center stage at the 2023 Cleantech to Market (C2M) Climate Tech Summit.
The summit, held at Spieker Forum in Chou Hall on Dec. 1, brought together eight UC Berkeley graduate student teams who presented their findings from a year’s work on entrepreneurial projects for C2M company founders. Each team spent nearly 1,000 hours working with founders, assessing new technologies, and investigating paths to commercialization.
Brian Steel, co-director of the C2M program, which is part of the Energy Institute at Haas, called this year’s summit the most successful to date and reflected on C2M’s growth since its 2008 founding.
“One of the things that’s so energizing for us as faculty is that the students come to us now with such wonderful depth and breadth of knowledge because cleantech has been around for so long. We feel so fortunate that the world has caught up with the sustainability work we have been doing for 15 years.”
One of the things that’s so energizing for us as faculty is that the students come to us now with such wonderful depth and breadth of knowledge because cleantech has been around for so long. — C2M co-director Brian Steel.
A total of $70,000 in MetLife Climate Solution Awards was awarded to three startups, who were supported by three C2M teams. The three teams honored during the summit were:
ChemFinity Technologies, which produces high-performing, highly modular porous polymer materials, won $40,000. The team included Chris Burke, MBA 24; Ethan Pezoulas, PhD 26 (chemistry); Kosuke “Taka” Takaishi, MBA 24; Matt Witkin, MBA 24; Mingxin Jia, PhD 24 (mechanical engineering); and Peter Pang, MBA 24. (The team also received the annual Hasler Cleantech to Market Award, given to the audience favorite.) Left to right: Kosuke “Taka” Takaishi, MBA 24, explains the catalytic converter recycling process alongside PhD student Ethan Pezoulas and Matt Witkin, MBA 24.
The students worked with Brooklyn-based ChemFinity co-founders CEO Adam Uliana and CTO Ever Velasquez, both PhD 22 (chemical engineering). Uliana described the membrane filters the company built as “atomic catchers mitts that are designed to capture just one type of molecule and can be used to tackle water desalination or mineral recovery.”
Witkin, who worked in economic consulting on decarbonization projects before coming to Haas, said that he mentioned Cleantech to Market in his application essay, as “the perfect course where I could help these innovative climate companies find and scale their impact.”
“It was an honor working alongside Adam from ChemFinity and my C2M classmates as we considered how ChemFinity could apply and grow its impressive separation technology,” Witkin said.
The first-place ChemFinity team: (left to right) Chris Burke, MBA 24, Kosuke “Taka” Takaishi, MBA 24, Mingxin Jia, PhD 24 (mechanical engineering), Peter Pang, MBA 24, Matt Witkin, MBA 24, Ethan Pezoulas, PhD 26 (chemistry).
REEgen, which works to reduce the environmental impact of rare Earth element production, which won $20,000.The team includedCarlos Vial, MBA 24; Francisco Aguilar Cisneros, MPP 24; Jeffrey Harris, MBA 24; Kelly McGonigle, MBA 24; Orion Cohen, PhD 24 (physical chemistry); and Sho Tatsuno, MBA 24 (MBA Exchange Program, Columbia Business School). The United States now imports more than 80% of its rare earth needs from China, said Alexa Schmitz, CEO of Ithaca, NY-based REEgen. REEgen is creating a new kind of rare Earth element production using bacteria to leach, recover, and purify rare Earth elements domestically.
Team REEgen: (left to right) Francisco Aguilar, MPP24, Sho Tatsuno, MBA 24, Orion Cohen, PhD 24, Kelly McGonigle, MBA 24, Jeffrey Harris, MBA 24, and Carlos Vial, MBA 24.
Tyfast, a battery technology startup, which won $10,000. The team included Ankita Singh, EWMBA 24; Erik Better, MBA 24; Nicholas Landgraf, EWMBA 24; and Sterling Root, EWMBA 25. Tyfast builds high-performance lithium ion batteries “to make diesel engines obsolete in construction equipment,” said Tyfast CEO GJ la O’, BS 01, (materials science & engineering). San Mateo-based Tyfast uses a raw material that enables a new class of rechargeable battery, promising to deliver 10 times the power and cycle life with energy density exceeding commercial lithium iron phosphate (LFP) technology.
Team Tyfast: (left to right) Erik Better, MBA 24, Nick Landgraf, EWMBA 24, Ankita Singh, EWMBA 24, Sterling Root, EWMBA 25.
Steel said he’s grateful to all of those who support the program, in particular the C2M alumni who return to Haas to serve as coaches, mentors, judges, or speakers—or just to enjoy being a part of the audience.
This year’s event kicked off with speaker Ryan Hanley, C2M 10 and MBA 11, the founder and CEO of Equilibrium Energy, a 100-employee climate technology startup. Barbara Burger, MBA 94, energy director, advisor, and innovator, and former president of Chevron Technology Ventures, also joined a fireside chat with Harshita Mira Venkatesh, MBA 11, who participated in C2M in 2020 and is one of the first business fellows at Breakthrough Energy, founded by Bill Gates in 2015.
“It’s always gratifying to have alumni who were on stage last year come back to support this year’s teams,” Steel said. “People who have been coming to the summit for years appreciate that we keep raising the bar: that our students’ presentations keep getting better and better. It’s very rewarding to have that acknowledgement and appreciation.”
Ginny Whitelow, a director at MetLife, worked with the C2M program as a mentor. “These UC Berkeley students have been so amazing to partner with and have given me an added sense of purpose in my work at MetLife that goes beyond my day to day job,” she said.
Pre-pandemic, companies sunk millions into office redesigns: cubicles were out, replaced by open, flexible layouts—often with ping pong tables, well-stocked kitchens, or other on-site perks.
Post-pandemic, companies are changing it up again, setting up hot-desking and hoteling spaces for hybrid workers.
But new Berkeley Haas research suggests that leaders wanting to build employee engagement should think less about rearranging the furniture and more about how employees relate to their workplace.
“When people feel a sense of self-esteem and distinctiveness derived from their workspace, we found it enhances their engagement,” says Brandi Pearce, a member of the Haas professional faculty. “It also enhances collaboration and their commitment to the organization.”
Pearce refers to that sense of connection to one’s physical space as “place identity,” a term derived from environmental psychology that is often used to understand how people relate to public spaces or communities. In a paper published in the journal Organizational Dynamics, Pearce and co-authors from Stanford and Pepperdine universities explore the importance of place identity in organizations.
Their findings offer guidance for leaders who want to build employee engagement at a time when the very concept of a workplace has become increasingly fluid.
Connections and belonging
The research team studied a software company transitioning workers at sites throughout the world from traditional offices to open-plan innovation centers—complete with movable furniture and whiteboards, colorful walls, sofas, and beanbag chairs—to promote agile work. Despite the popularity of such open-office plans, academic research on their benefits has been mixed, and Pearce said she was struck by how different people at the company reacted to the new environment.
“For some people, that type of space is amazing—they have access to their leaders and their colleagues at any time,” Pearce says. “And for others it reduces all the signals of their own status inside of the hierarchy. Or it’s impossibly distracting. Or they view it as rough and rugged.”
Whether people accepted or rejected the innovation centers didn’t seem to align with their work functions or professional backgrounds, nor with age, gender, location, or other factors. “We got really curious about that, and started to notice that what seemed to matter more than the space itself was how people felt the space connected to them personally, positively differentiated them and reflected a sense of belonging to something meaningful,” Pearce says.
In observations, interviews, and surveys across two studies at innovation centers in the U.S., China, India, France, and Israel, the researchers found that people who described feeling most connected to the innovation centers also expressed more excitement about their work and the organization overall. “What they described was distinct from other sources of work identity, such as team, professional, and organizational identity. “
In fact, this distinctive sense of place identity was associated with critical work outcomes, their studies showed. “Overall, our data suggest that workers collaborate more actively with one another, are more engaged, and are more committed to the organization when there is more place identity.”
Cultivating place identity
To cultivate place identity, leaders should be just as intentional about setting the social conditions for the workspace as they are about the physical design, Pearce says. Whether the setting is physical, hybrid, or virtual, she suggests three best practices:
Broadcast the vision of the space. No matter the setup, leaders should clearly communicate the purpose of the space and what kinds of work that will be done in the various workplaces—brainstorming sessions, workshops, and other collaborative tasks onsite, for example, while saving focused time for home offices. Leaders can help define virtual workspaces as well; such as stating whether video conferences are spaces for efficiency or connection.
Model enthusiasm for how to use the space. While visioning is important, equally critical is the way in which leaders convey a positive attitude about the space. In a hybrid setting, for example, leaders can express enthusiasm by using the various spaces as intended, such as holding in-person meetings on in-office days and visibly blocking calendar time during remote-work days for solitary work.
Empower employees. The researchers found the highest levels of place identity among the teams that spent the most time envisioning goals for their space, so leaders should involve workers when creating a new space. In established spaces, leaders should encourage workers to adapt the space to suit their work needs or create something together, like a piece of art, that can build identity. Remote workers could be given materials to customize their spaces, or—if they do visit the office—create something with co-workers to bring home.
“Companies invest a lot in their physical spaces, but we see place identity as a fundamental human process that also requires investment,” she says. “The investment that leaders make in understanding and promoting the vision of the workspace, conveying a positive attitude and empowering workers to customize their spaces helps cultivate place identity and may be key to unlocking collaboration, work engagement and organizational commitment—whether near or far or inbetween”
Salaries for FTMBA grads continued to increase this year.
Setting a record, annual base salaries for the Berkeley Haas Full-time MBA Class of 2023 increased to an average of $162,831. That’s about $10,000 more than last year, with nearly 70% of the class nabbing signing bonuses averaging $36,777 as well. Notably, 39% received stock options or grants, adding significantly to total compensation.
“We’re thrilled that starting salaries and compensation packages have continued to grow, reinforcing the strong return on investment on a Berkeley Haas MBA,” said Abby Scott, assistant dean of MBA Career Management & Corporate Partnerships. “These outcomes are a testament to the high caliber of our students. Our alumni and career management team also play an instrumental role in helping them navigate paths to reach their goals.”
Of the total class of 294 graduates, roughly 90% received job offers within three months of graduation, and even more secured opportunities within six months of graduation. Similar to previous years, more than half of the students accepted roles in the technology industry and consulting. A few more highlights from the Career Management Group (CMG):
Technology remained the largest industry employer, with about 30% of the class taking positions in the sector. Amazon was the top tech employer.
Nearly 28% of the class accepted consulting jobs; the largest number of graduates went to McKinsey (26 hires), followed by Bain (14 hires), this year’s two top employers overall.
Financial services hiring increased from 13.7% to about 14.5% of graduates; health care and biotech jumped from 5.1% to 7.5%. Energy-industry roles among grads jumped to 6.6% of graduates from 2% last year, reflecting the increase in climate tech.
About 22% of graduates embarked on “impact careers,” defined as jobs in sustainability, climate tech, healthcare, edtech, and some areas of finance and real estate.
A growing number of students (4.4% of the class) accepted positions in real estate, typically in development and investment roles.
McKinsey, Bain top employers
This year’s top employers for Haas—companies that hired three or more graduates—included Amazon, Boston Consulting Group, McKinsey & Company, Deloitte, Bain & Company, EY Parthenon, PayPal, Apple, Evercore, Microsoft, TikTok, and Tesla.
Matt Solowan, MBA 23, is now a consultant at Bain & Co., after interning there while at Haas, finding the people at Bain similar to the people at Haas: “very down to earth, very kind, very warm, very supportive.”
Matt Solowan, MBA 23, is a consultant at Bain.
While at Haas, Solowan said they worked closely with Julia Rosof, a career coach in the Career Management Group, to prepare for early recruiting opportunities scheduled during ROMBA, the annual LGBTQ+ MBA conference. “After that, I really leaned on the second-year peer advisors who provided me with on-the-job insights and helped to improve my casing and behavioral interview skill,” Solowan said.
In addition to consulting, the tech sector remained a top area of interest for FTMBA graduates, “so we were particularly pleased to see so many land roles this year, given all the churn in the field,” Scott said.
Highlighting the power of the alumni network, Henry Gordon, MBA 23, landed a position as strategy and planning manager at drone startup Skydio, after chatting with classmate Harrison Zhu, MBA 23. Zhu, a product manager at Skydio, had interned there while at Haas. “I knew he really liked the company and when I was looking for roles this one popped up in my LinkedIn,” Gordon said. “I texted Harrison to ask about it, and three weeks later, I had a job.”
Henry Gordon, MBA 23, is a strategy and planning manager at Skydio.
Since joining Skydio, Gordon said he’s helped guide the company’s strategy as it pivoted from its consumer drone business to the enterprise market. “I was attracted to Skydio because of the enormity of the problems that they are trying to solve”—by providing drones to utilities, fire departments, and other industry customers. “About 30% of my job now is familiar, and the other 70% is totally new.”
Grads land in multiple regions
Lecturer Abigail Franklin, managing director of a program for careers in real estate who works with the Fisher Center for Real Estate & Urban Economics, said alumni working in real estate are particularly critical to her students’ success in finding roles. “Our 2023 graduates did so well in many geographic locations with the best compensation that I’ve seen in my 12 years here,” Franklin said. “It’s really a testament to the real estate alumni we have.”
One example, she noted, are the Haas alumni at privately owned real estate firm Hines, which hired two 2023 Haas MBA graduates this year—one in Chicago and another in Seattle, she said.
A number of 2023 graduates held out until the fall for the right opportunity, based on their specific career criteria—and the Career Management Group continues to support graduates until they find the right role, often reconnecting during future job transitions.
Before coming to Haas, Megan Nelson, MBA 23, worked for Uber in Australia. When she started in 2015, she was one of 20 employees in Sydney, a number that swelled to 400 people by the time she left as senior regional operations manager in 2021.
Megan Nelson, MBA 23, is chief of staff at JOLT.
Nelson decided to take a few months off after graduating from Haas before beginning her search for strategy and operations roles last August. With a goal to move back to Australia and work at a startup or scale-up, she jumped to apply for a position as chief of staff at Sydney-based startupJOLT, a company working to support the transition to electric by providing free, fast, and clean EV charging.
Her new role at JOLT aligns with her love for working for a company at an early stage. “I am focused on a bit of everything, including expanding our CEO’s capacity so he can steer the ship. I’m supporting both Australia and our international markets, and helping build the internal operating structures to enable our teams to sprint.”
Classes at Haas provided a professional lens that Nelson said she applies in the workplace.
“Haas built my confidence,” she said. “I realized that my background was really valuable. Hearing the perspectives of my peers in the classroom, the courtyard, and over drinks—the people were the best part of Haas. It’s having those rich experiences and interactions, and being able to share my own…it’s these types of learnings that have helped me the most.”
Student-led startup teams tackling a diverse range of challenges—from carbon emissions to the use of AI in education—will come together to pitch this week at the University of California LAUNCH Accelerator’s Fall 2023 Demo Day.
The event, a chance for startups to pitch their ventures to a panel of judges, will be held Thursday, Nov. 30, at Spieker Forum in Chou Hall. All eight finalists will compete for up to $50,000 in non-dilutive funding.
“For the first time in UC LAUNCH history, seven of the eight finalists have at least one female co-founder,” she said. “We are super excited to celebrate them on Demo Day.”
Scaling a company
The UC LAUNCH program guides students through the steps of scaling a company using the lean methodology, with mentorship provided by experts in the field. All teams must include at least one current UC student, alum, or faculty member. More than 250 startups that have participated in the program have gone on to raise more than $1.4 billion collectively, according to UC LAUNCH organizers.
This year’s finalists include CarbonSustain, providing a way for companies to efficiently track and analyze carbon emissions.
Paul Bryzek, MBA 24
Co-founder Paul Bryzek, MBA 24, said the team interviewed more than 85 potential customers, competitors, business owners, and subject matter experts while in UC LAUNCH. “Our interviews yielded 10 potential customers, three distinct customer target groups, an understanding of their willingness to pay, and gaps with the existing solutions,” he said. “We’re grateful for the mentorship from Rhonda Shrader and the UC LAUNCH volunteers who helped us to achieve product-market fit.”
Finalist Rumi’s platform helps schools integrate AI to enhance student learning through writing.
Co-founder Mohammad Hossein Ghasemzadeh, MIMS 16, said the team did extensive research in forming the startup and believes that AI will play a key role in the future of education. “We’ve talked with over 150 instructors across the country, and we’re very excited to share our story and provide some insights into what the future of AI in education will look like,” he said.
Eight finalists pitching
Other LAUNCH finalists include OmBiome, a regenerative health company creating algae-based products for oral and gut health; Rely, simplifying property management for landlords and offers renters a comprehensive real estate meta-search engine; Materri, a materials marketplace focused on sustainable materials for footwear and apparel; Insta Chef, which is providing nutritious, easy-to-prepare meals to senior living facilities; Essence Labs, an AI-powered platform optimizing work schedules for female employees based on hormonal cycles; and AidRx, providing custom AI charting solutions to ease the documentation burden for pharmacists and other non physician clinicians.
It should have been a red flag that FTX’s organizational chart was created behind Sam Bankman-Fried’s back by his personal psychiatrist. Or that Bankman-Fried didn’t even want an org chart in the first place.
Lewis is one of the most acclaimed authors in the investigative business world, with his nonfiction books having earned two Los Angeles TimesBook Prizes and countless No. 1 spots on The New York TimesBest Seller list throughout his career. But before he was known for acclaimed investigative works such as Moneyball, The Big Short, and The Blind Side, Lewis was once a businessman himself.
Inspired to write his first book, Liar’s Poker, after starting his career on Wall Street as a bond salesman at Salomon Brothers, Lewis has continued to cover financial crises and behavioral finance, including in positions at The Spectator, The New York Times Magazine, Bloomberg, Vanity Fair, and more.
Yet, when Lewis first met with Bankman-Fried in the process of writing Going Infinite, he wasn’t sure what to make of the situation. “It can often take me a year to figure out if there’s a book in something,” he said.
It was after spending more time with Bankman-Fried that Lewis realized there was a story to be told. Bankman-Fried considered himself to be an “effective altruist,” Lewis said, and aimed to become the “the most important person” in this cult-like movement. Originating around the same time as BitCoin, effective altruism emphasizes one’s duty to serve others and “earning to give.” The problem with this utilitarian-like movement that “aims for good,” according to Lewis, is that it strips out human sympathy and justifies incivility toward colleagues.
As a result of expecting everyone to “manage themselves,” Lewis explained, Bankman-Fried became more of a “figure” than a leader. In fact, despite having 140 venture capitalists investing, FTX neither had a CFO nor a board of directors.
“The reason that he was able to just run through the world without having the ordinary checks imposed upon him is that the thing was actually so successful,” Lewis said. “The venture capitalists looked at it and said, ‘Alright, this is different. And yes, something bad might happen, but the bad thing happening is not nearly as bad as us missing out on the next Google.’”
It was in this context that FTX came crashing down. As a reaction to the financial crisis, the cryptocurrency movement aimed to organize a financial system without the intermediaries and regulators of traditional financial institutions. Coupled with Bankman-Fried’s distrust in org charts—believing they created issues of status—FTX lacked any sort of oversight, instead thriving off of its monetary success with a peak valuation of $32 billion.
According to Lewis, one of the main takeaways from the story is that “you can’t have financial markets without regulators.” Ultimately, Lewis said he hopes that those who read the book, if anything, take away pleasure from the incredible story of what he describes as a “comedy with a tragic ending.”
Watch the full Dean’s Speaker’s Series talk.
Read the full transcript:
Professor Jennifer Chatman: Welcome to the Dean’s Speaker Series. Yay. Go Bears. This is an event that’s actually co-sponsored by the center that I co-direct with my colleague, Sameer Srivastava, the Center for Workplace Culture and Innovation. And I’m Jenny Chatman. I am the acting dean at the Haas School of Business, and I am absolutely thrilled to welcome today Michael Lewis, the renowned author. We know him well. He almost needs no introduction. This morning I was thinking about my favorite book of yours, “Flash Boys.” Is that a weird choice?
It’s a weird choice. I remember I bought it, I was coming back from a large eastern school, and at Logan Airport, I picked it up, and I had all this work to do on the plane, and instead, I opened the cover, and I read it from coast to coast and did zero of my work; so it was, as usual, a gripping book. So Michael’s style, as you know, is to use real-life characters to kind of open up a world of mystery and intrigue. His books are stranger than fiction, and they are so gripping that many of them have been made into Hollywood films, including, pick your favorites, “The Blind Side,” “Moneyball,” which I use in my classes, and “The Big Short.” So Michael, thank you so much for spending some time with us and visiting us here at Haas. It’s great to have you.
Michael Lewis: I’m surprised you didn’t explain how far back we go. I mean, our kids were in school together starting, what was it, preschool? Or was it kindergarten?
Chatman: Well, so we were actually, if truth be told, we were the host parents, and actually, my husband Russell and I, we were host parents to your family coming into the school that our kids went to in kindergarten. And I had no idea who Tabitha was or Michael Lewis. Coincidentally, I had the book “Liar’s Poker” on my nightstand, and they came over for dinner, and I’m asking like, what do you do for a living? And he’s like, “Oh, I write books.” I’m like, “Oh, have you written anything I would know?” “Yeah, “Liar’s Poker,” “Moneyball.” And I’m like, “Oh, you’re that guy.” And I didn’t bring my book down because for some reason my Amazon order came back, sorry, it was Amazon. It came back as the easy-read version. And I’m like, look like I’m 900 years old with this easy read. It was a mistake. But, so we do go way back. And I think you and Russell have cooked pancakes together in—
Lewis: Many times.
Chatman: Various camping sites. So let me just offer some logistics here. We have cards on your seats. If questions occur to you, please pass them to the side. I think, Audrey, if you want to raise your hand, and Sarah. They will be picking up those cards and later we will have time to read those. Be sure to write your name and what program you’re in or what kind of member of our Haas community you are so that we can acknowledge you. And then, finally, before we dive in, I just want to thank a few people for putting these events together. Ooh. One is Sarah Bottger, who does a fantastic job in putting our whole dean’s series together. Thank you, Sarah. Carrie Hults and Audrey Jones have been instrumental in putting this together. So thank you guys so much. OK, so let’s talk about “Going Infinite,” and I—
Lewis: We can talk about anything.
Chatman: Yeah, I know—
Lewis: But, yes. This book is—
Chatman: Because I’m obsessed.
Lewis: Yeah.
Chatman: With this book, so, you may notice that it’s like not even really been opened, but that doesn’t mean I haven’t read it. I actually listened to it for the last two weeks. Michael is the narrator of the audiobook, which is unusual. And they keep saying, when they do the credits, they say, “performed by Michael Lewis,” which is so fun. So you’ve been in my ear for my long runs for the last two weeks, and it’s really a fascinating book; and, of course, has coincided with the events of Sam Bankman-Fried’s fate—emerging fate. And so, why don’t we start with that?
Lewis: Sure.
Chatman: I have some other questions.
Lewis: Yep.
Chatman: OK. So, if you’ve read the book and if you’ve gone to business school, you have thought a lot about expected value calculations. And so my first question is, why did Sam let you write a book about him? What do you think his expected value calculation was for that?
Lewis: So, I think it was complicated. Is everybody, I mean, I don’t know how much background we need to give people. Does everybody know who Sam Bankman-Fried is in here?
You know, it’s funny, I was in Portland this weekend at a literary festival. It was people who read novels and even poetry. And there were 1,200 people in the auditorium. And I thought, and the person started with this a question that just presumed that the audience knew what FTX was and crypto trading. And I said, “Well, just stop a second.”
Chatman: Yeah.
Lewis: “Does anybody here not know who Sam Bankman-Fried is?” And they go, they all go, “No, we all know.” And it’s just amazing.
Chatman Yeah.
Lewis: The reach of this story.
Chatman: And so if they know, these guys definitely know—
Lewis: These people definitely.
Chatman: OK.
Lewis: These people are ready. So, I’ll tell you how I came about. Came about right here in Berkeley. And he came over to my office because a friend, the Brad Katsuyama, the hero of “Flash Boys,” the main character of “Flash Boys,” called me and said, “I’m about to swap shares with FTX.” And I said, “What’s FTX?” He said, “It’s the fastest growing financial business I’ve ever seen, and we’re going to exchange $300 million of shares in IEX.” Our stock trading, stock exchange with this guy. And he says, “My problem is, I don’t know this guy. I mean, I met him, but he’s odd, and I can’t, I don’t, I’m having a hard time getting a kind of read on him, and nobody knows who he is.” Eighteen months ago, he had no money, and now, he’s worth $22 billion, and he’s in Hong Kong. He says, “Could you sit down with him and just give me a view?” And I took him on a walk up til then for two hours, almost killed him. I mean, this whole scandal could have been avoided if I just took him on a three-hour walk. But he, I mean, he shows up, he showed up, but he comes out in his hiking shorts and his T-shirt. I thought, “He wants to go for a hike. He’s never been on one.” You know, he’s always dressed for one and never taken one. And, he, we go on this walk, and by the end of the walk I was already, I already thought character and situation is as good as it gets. He was—the situation was so bizarre. So I, we can get into why I got interested, but why he was interested is a different question. Because at the end of it, I said to him, “I didn’t know there was a book, I didn’t know what there was.” It often takes me, it can take me a year to figure out if there’s a book in something. But I said, “I just want to come, can I just come along and watch?” I don’t know why I said, “I don’t know what’s going to happen to you, but I want to watch, ’cause what’s happened already is incredible.” And he said, “Fine.” Now, he never once explained to me why he said “fine.” He never once asked me what I was doing or why I was interested. He never once asked, when I’d ask a question, “Why do you want to know that?” He never once asked to see—he didn’t see the book until he got it smuggled into him in jail a week after it came out. So he had no idea what I was up to. But I think what he thought, what he would’ve told his colleagues who were saying, a few of whom were saying, “Why are you letting him in?” was we are on a quest to be the legitimate crypto exchange. The big, the holy grail is to be regulated in the United States to get the approval of the SEC or the CFTC to open a crypto futures trading platform, and those people read Michael Lewis’ books. Now, this was, so that’s the official answer. I think the answer is, he read “Moneyball” when he was a little kid. He was a completely isolated nerd among nerds. He was a person who could read “Moneyball” and think, “Oh, there’s a place for me in the world.” And for some months in his childhood, he wanted to be a baseball general manager, and he got obsessed with baseball statistics. I know this not from him; I know this from his parents. And I think that because I reached him when he was a little kid, he felt some odd connection, and so that he was interested for that reason. But then, of course, what happens is that I become a nuisance in his life. I mean, I spent, I don’t know, I commuted to the Bahamas. I was commuting from here to the Bahamas. I spent 60 nights there over the course of, and I insisted on traveling with him around the country here, and so on and so forth. And I think then, what happened was, what happens with all the subjects, they’re three months in, and they realize it’s too late to turn around. Like they, I’ve seen too much and know too much and like I may be a pain in the neck to have around, but we’re too—it’s too late.
Chatman: Yeah.
Lewis: I had a number of subjects give me that look, like, “How did you do this?” Like, “How did you get this far in?” And we can’t just chuck you out now. I remember Billy Bean actually saying that to me, and, but I think, so I think it just got to the point where it had its own momentum and he let—and som I was there. I mean, where it gets particularly odd is last November, exactly a year ago, almost today, when FTX is imploding, the only people, all the employees have fled the Bahamas. And it’s me, his psychiatrist, him and his parents, and one employee with the COO who’d stuck around to kind of investigate him. But, and that was kind of, I was that kind of in, so it was a privileged ring. It was a privileged view of a bizarre story.
Chatman: Yeah. Yeah, I mean, you write about this effective altruism movement that Sam kind of identified with.
Lewis: Yeah.
Chatman: Right?
Lewis: More than identified with. I mean to appreciate the weird, the media sort of flattens the story.
Chatman: Yeah.
Lewis: And the trial certainly flattens the story. Like, I don’t think the phrase effective altruism was uttered in the courtroom. The jury never would’ve learned that all these people they were hearing from were united by a cult-like belief in this thing. And, so they never got them, the motive. But if you want to understand Sam Bankman-Fried, you’ve got to understand the movement.
Chatman: Yeah.
Lewis: And the movement starts basically when Bitcoin is created. Same kind of year period. And it’s a movement that grows out of work that was done. I mean, it grows out of utilitarianism, but papers that were written by an Australian philosopher named Peter Singer, who was at Princeton when I was actually at Princeton.
Chatman: Yeah.
Lewis: And had a mesmerizing effect on students because he was sort of asking young people, “What’s your obligation to the world? And he would, he started, I think the first paper he wrote the story that kind of hovers in the background of the effect of altruism movement. It’s an anecdote that Singer has in this first paper, where he says, “I’m going to put you in a moral quandary. You’re walking by a pond and you see a small child drowning. You’re wearing your brand-new, $300 shoes. Do you hesitate to take off your shoes before you jump into the pond to pull the child out, who’s drowning out of the pond? Of course, you don’t, you just, you go in and you, the shoes are ruined. So why do you hesitate to, instead of buying those shoes, take the $300 and send it to some poor country in Africa where it would save a child’s life?” And he, so he creates, he created a lot of moral discomfort in a lot of young people, but it never led to any action. I can remember hearing about this guy and people kind of coming out of his class thinking, “I’m rethinking my responsibility to like total strangers.” This, these Oxford philosophers in 2009, a particular one named Toby Ord start to write papers where they say, “We’re going to make, we’re going to take action on the back of Peter Singer’s work,” and Ord writes this paper where he says that, he shows that if he just took half his salary, which he said he intended to do, his academic salary over the course of his lifetime.
Chatman: It’s huge, absolutely huge.
Lewis: Huge, giant Oxford salary, right? I mean, look at you. You’re I mean, you put it into clothing. He was putting into, he—
Chatman: But I would actually take my shoes off because, right? You could swim better if you didn’t have your shoes on. So you could kind of do both.
Lewis: Oh that’s very funny. And you’d be so much faster that the time, yeah.
Chatman: Spoken like a Claremont member swim club.
Lewis: Yeah. Right. Right. Yeah. But they make this argument that they make this, they start essentially proselytizing the idea to young people that it’s a combination of your duty to the world, to other people. And also the twist that really gets inside of the heads of the mathy, sciencey kids that they attract, is that: “We are going to be rigorous about the altruism.” We’re going to actually start to measure the effects—
Chatman: Right.
Lewis: Of the various things you might do with this money. And we’re going to measure it in terms of, I mean, they developed some pretty kind of obstruent units of measurement, but quality life years saved or whatever it is. So you can start to do analysis about, you can measure your performance as an altruist. And Sam Bankman-Fried hears one of these philosophers give a talk when he’s a junior at MIT. And he just thinks that’s right. And they’d done it by, this is 2012, but they, what the philosophers had done at that point, was started to make an argument to especially young American college students—college students in the typical was like math or science at MIT or Harvard or Stanford or here. And the argument was: “If you’re thinking about what you’re going to do with your life, and we’re going to be rigorous and analytical about this, stop thinking about the direct good you would do.” Like, don’t think about, oh, I don’t know, going to be a doctor in Africa. Think about earn to give.
Chatman: Right.
Lewis: Think about this idea that you, hey, “You’re appealing to high frequency trading firms. You can make millions of dollars in the course of your career. Go do that to give it away.” And what I remember when I first heard about this, I was at some Wall Street Conference, and someone came up to me and said, “You’ve got to know about this. You know, we’ve hired a couple of kids, and they’re here because they say they want to make money to give it away.” And this was so perplexing to this Wall Street guy. It was like, no one, I, and it was like the first time in the history of Wall Street.
Chatman: Yeah.
Lewis: That people go to Wall Street to give it away. And actually quite seditious in a way, the point where it actually makes the firm that Sam Bankman-Fried goes to work for.
Chatman: Right.
Lewis: And a bunch of other effective altruists go to work for.
Chatman: Right.
Lewis: Uncomfortable.
Chatman: Right.
Lewis: ‘Cause they sort of, the lever they usually have on the employees is not there anymore. They’re doing it for a different kind of purpose. But, the high frequency trading firms who are recruiting people like Sam Bankman-Fried are sort of fishing in the same pond as the effective altruists philosophers. That they’re looking for mathy, sciencey—
Chatman: Yeah.
Lewis: You know, analytical young people. And so a lot of these people end up doing what Sam does, going to high frequency trading firm, and with it to earn, to give.
Chatman: Yeah.
Lewis: Now, there’s a whole, we don’t probably want to go off on this too much longer, but there’s a whole turn that that movement—the effective altruism movement—takes, which amplifies the ambition of the people in effective altruism, amplifies it beyond, it’s, they stop thinking about, it’s, so, there’s this cult-like quality, the people—
Chatman: Right.
Lewis: Who become effective altruists. But it’s a kind of anti-cult cult because it’s a cult that’s based on reason and argument. And if you, and unlike a lot of cults, if you win the argument, you can change the cult. And at some point someone wins the argument and the, an argument, and the argument is, “OK, you, we’ve been talking about maximizing the number of lives you’re going to save with the money you make, doing whatever you do. But we’ve been talking about saving the lives of people who are here, now.” There is this problem with existential risks to humanity.
Chatman: Right. Right, right.
Lewis: And it takes many forms. There’s all these risks, this climate change and artificial intelligence and some really horrible pandemic. Something that would wipe out the species, asteroid strikes. If you could do anything to, the argument goes, “If you could do anything to reduce the risks of any of one of these things, you will have saved many, many more lives in the future. Then you could by just focusing on the here and now.”
Chatman: Right.
Lewis: And this decouples even further.
Chatman: Right.
Lewis: The actions that people are taking to do good from the recipients of the goodness.
Chatman: Yeah.
Lewis: It sort of completely strips the action of human sympathy.
Chatman: Yeah.
Lewis: And this is perfect for Sam Bankman-Fried, ’cause he has no human sympathy.
Chatman: Yeah, yeah, yeah.
Lewis: And it’s, but you can’t understand why he’s doing what he’s doing, unless you understand he’s completely, this isn’t phony. He’s complete, he eats, sleeps, and breathes this movement. And his ambition is to be the most important person in this movement. But it’s not like he’s just faking it.
Chatman: Well, I mean, in some ways, I wonder if that was a way that he felt invulnerable. Right, because these grandiose means just, ends justified the means. And in a sense, you could justify—
Lewis: Anything. Yep.
Chatman: Almost anything, including buying most of the luxury housing in the Bahamas and being uncivil to your immediate colleagues who are in front of you. If you imagine you have the greater good in mind and you have the, I’ll call it con—
Lewis: It does let you off hooks.
Chatman: I’ll call it confidence for the moment. But it could border on arrogance to be the one who decides what those existential problems are and how you’re going to prioritize them. I mean, that’s a pretty—
Lewis: You know, he reminded me of somewhere in the middle of kind of figuring out what the story was before I’d start writing it. So I didn’t start writing this ‘til January. So I—
Chatman: Wow.
Lewis: I didn’t really, and I didn’t commit to do it until after it all collapsed. But somewhere in the middle of it, I thought, “I’m watching some odd prelude to the dystopic, some odd foreshadowing of the dystopic artificial intelligence story,” where you, one dystopic artificial intelligence story is, you tell artificial intelligence to do something that you think is good, but you don’t tell it how to do it.
Chatman: Yeah.
Lewis: And so there are no guardrails. So you say, “Could you get me a reservation for dinner tomorrow night at Chez Panisse?” And you don’t say anything else, and it goes and finds that all the tables that Chez Panisse tomorrow night are booked and starts murdering the people who have tables.
Chatman: Right. Yeah.
Lewis: To get you a reservation.
Chatman: I’ve done that.
Lewis: This is Sam, but I thought this is Sam Bankman-Fried. This is just like—
Chatman: Right.
Lewis: You told him what to do—
Chatman: Yeah.
Lewis: But you didn’t tell him how to do it.
Chatman: Yeah.
Lewis: And there’s a, there was a whiff of that about him that was—
Chatman: So—
Lewis: Fun to watch.
Chatman: So, let me try this out on you. So, we have four defining leader principles at Haas that we hold one another accountable for. I don’t know if you saw those when you walked in on our building. We etched them in stone to show that we’re quite serious about them. And I tried to kind of analyze Sam using our four defining leader principles.
Lewis: I knew this was going to happen. This is good. I’m glad this is going to happen, but I knew that eventually my book was going to be a business school how not to book.
Chatman: Well, I know I’m not even sure that’s not actually where I’m going.
Lewis: OK. OK. Go ahead, I’ll listen.
Chatman: But—
Lewis: I’ll try to listen. I’ll listen. Alright.
Chatman: And I am using “Moneyball,” I’m not using—
Lewis: OK.
Chatman: “The Big Short” or any of those in my classes. So yeah. So, OK, so let’s try this out. You all keep me honest, ’cause you know about these four defining leader principles. So he was a student always, right? That’s one of ours. He was a puzzle solver and clearly learning over time as he was going through this journey in the cryptocurrency world. He was thinking beyond himself, we could say as an effective altruist. He was questioning the status quo. He was trying to bypass traditional institutions and regulation, which he had no—
Lewis: Completely true.
Chatman: No interest in.
Lewis: Right.
Chatman: But alas, the last one, which is—
Audience: Confidence without attitude.
Lewis: Wait, what is it?
Audience: Confidence without attitude.
Chatman: Confidence without attitude.
Lewis: Oh.
Chatman: So we like to think of ourselves as a contrast. There’s institutions that have confidence with attitude, right? We have confidence without attitude. And we think that that combination is important. And that’s the one I think you could observe Bankman-Fried as falling short on. And I have to admit I do research on narcissistic leaders, and I have to admit that I could see a narrative in which Bankman-Fried is a narcissist. He’s also sort of an unassuming cult leader, right? That he didn’t intend, but we’ll hold that aside. So narcissistic leaders often prioritize their own success over the success of others. They forego collaboration for their own grandiose ideas. Like, I noticed his advisors would give him advice, and he wouldn’t necessarily take it. And sometimes they would engage in even ethically questionable behavior. They believe that pedestrian rules that apply to other people don’t apply to them. And I think his intellect caused him to think he kind of rose above that. So, do you think there’s anything to the idea that Sam Bankman-Fried is a narcissist?
Lewis: You know, yes. But it, there’s something to the idea. It’s, so, let’s a little, here’s a, is a fun exercise that I engaged in, he and I were talking about. He was obsessed with Donald Trump. I used a, he on the list, to the list of existential risks to humanity that he was handed by the Oxford philosophers. He adds Donald Trump because he thinks that if Trump is president, American democracy is at risk. And without democracy, you’re not going to solve all these other problems. They are much less likely to solve all these other problems. And so he was constantly kind of trying to get inside Trump’s camp. Trump’s mind. He’s trying to pay Donald Trump not to run for president.
Chatman: I heard the number was $5 billion.
Lewis: $5 billion is where they were. But you know, when Trump was—
Chatman: For Trump not to run.
Lewis: And I’m almost certain that they were negotiating, I don’t know this, but I’m almost certain with Donald Trump Jr., because Sam’s, one of the senior executives at FTX, was friends with Donald Trump Jr., and I think that was their path into the Trump world. I’m not sure if the numbers ever actually got to Trump, but I, when he’s, when he was telling me about that, my first thought was, “You don’t really think Donald Trump’s going to take your $5 billion and then not run for president.”
Chatman: Yeah.
Lewis: You know what he’s going to do? He’s going to take your $5 billion and run for president. And so, but—
Chatman: Call it a witch hunt.
Lewis: But that, but yes, whatever. But that part, but it was interesting to watch Sam talk about Trump, ’cause he got Trump, and he got Trump because he rhymed with Trump.
Chatman: Yeah.
Lewis: But he was a little different from Trump. So, Sam’s behavior can read from a distance as narcissism, because in the narcissist, he looks like he’s thinking because he’s not thinking about other people. Sam Bankman-Fried is born without the natural complement of human feeling and is completely aware of this fact. He replaces the, I mean the normal mechanisms that you or I use to get moved through the world. A lot of emotion, a lot of intuition, a lot of feeling. He replaces it with a kind of mathematical calculation.
Chatman: Right.
Lewis: Does it very consciously. Because he’s sort of like, it’s almost like being colorblind. He’s lacks empathy. He lacks—he doesn’t feel pleasure. It’s like there’s something he’s born without some equipment. I’d say the difference between, so that reads as like he doesn’t care about you.
Chatman: Yeah.
Lewis: And that feels like a narcissist. You default to, “Oh, he cares just about himself.” But he actually doesn’t spend a lot of time thinking about himself either.
Chatman: Yeah.
Lewis: I think he cares about himself almost as little as he caress about other people. And so, whereas Trump cares about himself constantly, thinks about himself constantly—
Chatman: Right.
Lewis: Sam didn’t spend any time, when you were with him, he wasn’t talking about himself all the time. In fact, almost never.
Chatman: Yeah.
Lewis: He was always out, he was outer-directed. But it could read as narcissism because—
Chatman: Yeah.
Lewis: Because of the consequences for other people were almost the same.
Chatman: Yeah.
Lewis: But the, it was not as, it wasn’t as un-charming as—
Chatman: Yeah.
Lewis: As what you’re imagining.
Chatman: Yeah.
Lewis: Because he was, it was never about, it never seemed to be about him. It always seemed to be about problems or other things.
Chatman: Yeah. Well, and actually, you’re doing some recording. You know, Michael has a podcast called “Against the Rules.” And this season has been about the trial.
Lewis: Well we did, you know what we did is cheat. So “Against the Rules,” the interesting part to me is, there are these scripted, we do scripted seasons, and that’s work and writing and performing all this. This was just the gabfest about the trial.
Chatman: Yeah.
Lewis: That was more run by, sort of my producer, more than me. And I jumped in a few times.
Chatman: Yeah, but one of the—
Lewis: But I was in the—I was at the trial.
Chatman: Right, but one of the things you said was that you noticed how the judge was even becoming more and more interested in Sam Bankman-Fried. He’s a complicated character. And you—
Lewis: There were a couple of moments where I thought the judge was going to toss everybody out just so Sam could explain Bitcoin to him. Because, Sam among, so almost all my, all my characters have certain traits but one of them is for sure, is they’re all good teachers. They’re— you can learn a lot from them.
Chatman: Yeah.
Lewis: And now, in addition, they’re often also in situations that teach you things inadvertently. They aren’t explicitly teaching you. They’re just kind of, like, the way they move through space is educational. But Sam is both. And when he gets talking, I mean this, that, he’s going to be mesmerizing. And the judge—this is a complicated subject. The judge obviously didn’t know what a computer was and was quite open about it. And I mean, he’s 80 years old, and he does, but he’s smart. And so here he had someone who could actually start to explain in ways he understood—
Chatman: Yeah.
Lewis: What this was and there were just a couple moments where you could, thought you could, see that, “Wow,” the judge thought, “This is interesting. I would like to just learn more here.” And it was a, it was a counterweight to the other thing that was going on pretty clearly in the judge’s head, going all the way back to when Sam was put under house arrest and started to do things that annoyed the judge is that the judge just hated him. Like, just, he was so annoyed by him.
Chatman: Yeah.
Lewis: So you could see the annoyance sort of fade a bit when Sam was allowed to talk at length. And so, he was for, took it to judge just a beat to stop him from doing that. You’re not really supposed to do that in the courtroom.
Chatman: Yeah.
Lewis: Because he was interested.
Chatman: Yeah.
Lewis: Yeah.
Chatman: So, I actually, I want to turn around ’cause I was thinking about the comparison between Bankman-Fried and Trump, but from the other side, which is what we look for in our leaders. And why Trump’s, well, I’ll leave Trump aside, but—
Lewis: Yes, leave Trump aside.
Chatman: Yeah, because Bankman-Fried sort of skyrocketed and was best friends with Tom Brady, and people were flocking to him, but his star dropped quickly and definitively. Right, he was convicted within four and a half hours on seven counts. And we don’t see that happening as quickly with Trump, right? It’s a much, much more complicated situation. But what does that tell us about what we look for in people who we want to influence us?
Lewis: That’s an interesting question. Like, what it is, what was it about Sam? Well, so Sam was a, more of a misleader than a leader, that he was not a, he—the leadership was almost accidental. It was, I mean, he, up until the point, he creates Alameda Research here in Berkeley. You know, this whole thing starts in downtown Berkeley with 20 effective altruists, only two, one of whom Sam has any experience trading anything. Like most of them can’t tell you the difference between a stock and a bond. And they’re starting a high frequency trading firm.
Chatman: So I’ll tell you about that rental. Is Mike Riley here? Mike, are you here? So, our executive education director rented the space to them, but he was so worried about what they were doing that he took it all cash upfront, which he had never done before. I just learned that, so.
Lewis: That’s very funny.
Chatman: Yeah.
Lewis: I wish I’d known that.
Chatman: Yeah.
Lewis: So, it’s very funny.
Chatman: You can footnote that in.
Lewis: Yeah. Footnote. But so—
Chatman: No script.
Lewis: So Sam is leading 20-, 24-year-olds who share his effective altruist. It’s a kind of religion. And he’s the only one who’s really traded successfully and can kind of, seems to know what he’s doing at first. But even then, it only takes four weeks before people are running for the exits. That, like this, that he’s got, I mean, he had the advantage of having fellow cult members and being the only one who knew what he was doing supposedly. And it takes a month before half the firm leaves because they’re terrified of him, of what he might do.
Chatman: Yeah.
Lewis: I mean the whole foreshadowing of what happens, no lab, in the, over, with FTX is right in downtown Berkeley where, he seems to know what he is doing then he’s so unbelievably careless with the money. You know, they’ve raised money from effective, $175 million from rich effective altruist, and they seem to have squandered it. And these other people who were, he’s supposed to be leading, start to wonder what the hell he is doing. And he himself has no ability or to connect with people or interest in managing them. His view is basically: You need to be able to manage yourself. And what happens is, in the Sam Bankman-Fried environment, this is a long way of saying, I don’t think Sam actually was exactly a leader.
Chatman: Yeah.
Lewis: He was a figure, it’s different, and in his environment because, look, he built his house on a gold mine. It was true that becoming a high frequency trading firm in crypto in late 2017 was a really good idea. And if you did it well, you made a lot of money. And they did it well enough, so they made, they did end up making a bunch of money. And it was also true that if you created a crypto exchange that people wanted to trade on, that was just a money machine. So there is, he, and it’s kind of accidental that he even does that, that part of it. So he builds his Beverly hillbillies. He builds his houses on an oil field. So there is a mechanism, there’s conditions for success actually building an organization he had no ability to do. And people around him were forever compensating for his—
Chatman: Right.
Lewis: I mean, look, you have the book, right?
Chatman: Yeah.
Lewis: Can you, if you didn’t read the book, it’s funny, you missed something that’s fun. You want to pull the jacket off. If you pull the jacket off—
Chatman: You mean versus your, versus the audiobook.
Lewis: Versus the audiobook, ’cause you don’t see this, pull the jacket off the hardback. So, and show—
Chatman: Oh, there’s the org chart.
Lewis: There’s the org, so—
Chatman: I was looking all over for that.
Lewis: So this is the world, this is the world that Sam Bankman-Fried creates.
Chatman: OK, this we would not teach in our classes.
Lewis: No, this, but this is so when the whole, so to backtrack this is an anecdote, but it’s an anecdote that there are 40 versions of this anecdote in Sam Bankman-Fried land. When the firm collapses and the bankruptcy people move in, one of the things they say is, “Oh my God, there’s not even a list of employees. There’s no org chart. We don’t know who’s here or who did what.” And it doesn’t exist. And the prosecutors even said, they’re like, “We can’t figure out how this place,” they’re trying to figure out how this place worked. And Sam, so Sam had this principled objection to job titles and organization charts.
Chatman: Yeah.
Lewis: He thought that job titles became excuses not to do whatever your job title was, as opposed to fix a problem. And he thought that org charts created status problems between people. And so he just, he forbid there being an organization chart. However, people in organizations need to know where they are. They need to know who reports to them. They need to know who they report to. They need to know where this, the level of seniority, all that stuff makes people, not having that makes people uncomfortable, especially makes Chinese people uncomfortable. And half the employees were Chinese, or a whole bunch of ’em were. I mean they’re like, in the Chinese companies, the org charts are a really important thing. He, so Sam, as a result of not having any of this organization and not managing anybody, not conventionally leading anybody, Sam has all these psychological emotional issues in his company. Like, everybody’s kind of unhappy.
Chatman: Yeah.
Lewis: And so, to solve them, he solves the problem in a very Sam Bankman-Fried way. He moves his personal psychiatrist, his shrink from here to the Bahamas to be the shrink to everybody. And so sort of like George, his name is George. You deal with all these problems that are caused because of the way I run my company. George, who in the Bay Area had become shrink to the effective altruists. So he was the world’s authority on the inner life of effective altruists. George moved to the Bahamas, and within about six weeks, 100 employees of FTX are on his couch.
Chatman: Yeah.
Lewis: Like, that many people, all wanting to share their problems and the problems all kind of went back to like, there’s no—
Chatman: And he drew the chart, right?
Lewis: So George in therapy starts to ask people where they are.
Chatman: Right, where they are. And what you can see here is that there’s just one box at the top, one box. And all the other boxes are below that one box, which is Sam Bankman-Fried.
Lewis: And he’s got 24 direct reports, none of whom he talks to. And he’s got a CTO who’s over here, Gary Wang, who has no one underneath him because Gary doesn’t speak. And it’s like, and George is figuring out like a psychiatrist, trying to think about t. is thing. And George does this completely in secret because he’s worried Sam’s going to be angry if he finds out that he’s created an organization chart. So before George fled, he’s now hiding in the jungles of Vietnam, I think. But before he fled, he gave this to me on a thumb drive, and my publisher said, let’s stick it on the inside of the jacket cover.
Chatman: Oh my God, that’s so funny.
Lewis: But that’s like, the best picture of the organization. And it’s a little warped because it was done by the shrink based on therapy sessions. But it was, this is like, I don’t know, I what do you do in a business school with this story? You like, hand it to somebody or say read it and never do any of this.
Chatman: Yes, that’s what you do.
Lewis: It’s kind of like—
Chatman: Yeah.
Lewis: I think it is the way you think about it.
Chatman: There are lessons. I mean, I have so many more questions, but I want to get to some of the audience’s questions. So let me finish with this question, which is sort of unresolvable. But you know, on the one hand, we’re a school that embraces entrepreneurship and pushing the boundaries and questioning the status quo and doing what hasn’t been done before. And there’s a way in which you want the Sam Bankman-Frieds of the world to succeed and to push new frontiers and try new things. And the promise of blockchain—there’s something idealistic there. On the other hand, there was essentially zero regulation, which seems to be, at least in part, responsible for all of the negative things that ensued. And so, what have you learned about that balance, right? Should the investors have been much more wary? Is it their own fault that they invested in this operation? Should the government regulators have been on top of it sooner? Should we have clamped down on Sam Bankman-Fried and FTX sooner? I mean, where does that happen in the world of evolution and progress?
Lewis: Well, crypto, I mean, all crypto is created in an opposition to regulation.
Chatman: Right.
Lewis: It’s created an opposition to institutions, to governments, to banks. It’s a reaction to the financial crisis, right, in the beginning. So, it was explicitly anti-regulatory. It had this libertarian streak, and it was in theory, a different way to organize a financial system without all these trusted intermediaries and without the need for regulators, right? But then, what it did very oddly and tellingly, is it recreated the financial system.
Chatman: Yeah.
Lewis: The traditional financial system inside of crypto but without the regulators.
Chatman: Yeah.
Lewis: And so what has resulted is scandal after scandal after scandal. And presumably a lot of things, bad things going on that nobody’s caught because there’s nobody there watching and policing.
Chatman: Well, and it looks kind of like, when you boil it down, it looks like old-fashioned fraud, like commingling funds and investing with your clients.
Lewis: What’s amazing, I mean, this story is so amazing. I regard, I didn’t know quite what to do with the structure of the story because, so Fitzgerald once said, “What Americans really want is a tragedy with a happy ending.” What this was was a comedy with a tragic ending.
Chatman: Yeah.
Lewis: It’s like the opposite of what, the whole thing felt so comic until it, until what happened, you know—
Chatman: Right.
Lewis: The last year, but, when they start they start, it doesn’t even, I don’t think it even occurs to them that the fact that there’s no distinction between Alameda Research and FTX is that big a deal. They’re an Asian Crypto Exchange. I don’t think any of the Asian crypto exchange has instituted these kind of controls that you would have—
Chatman: Yeah.
Lewis: In a U.S. exchange. I mean, just the idea that the exchange custodies the traders’ funds, that’s something that’s alien to the U.S. markets, right? You just wouldn’t be allowed here. It’s much less, you can own the biggest trader on the exchange at the same time that you’re custoding the funds on the exchange. All the whole structure’s nuts. And nobody even really questions it. What, if you want to, I’m trying to think of the best way to answer your actual question though is like, “What does it tell us about the, like what should have happened?” And probably what should have happened is the minute serious grownups started to turn up on the scene, venture capitalists, for example, 140 venture capitalists invested in this business, valued it at the end at $40 billion without insisting on there being a board of directors.
Chatman: Yeah.
Lewis: There was no board of directors.
Chatman: I mean, there was no CFO, right?
Lewis: There was no CFO.
Chatman: No CFO, OK.
Lewis: In fact, there’s a line in the book I asked, I was asking Sam about all this right away. And it was, he was, it was comic. He says, what, he says, “They tell me I need a CFO.” I asked him, “What does a CFO do?” And they said, “The CFO keeps track of the money.” He says, “I keep track of the money. Why do I need a CFO?” Well, we saw how well he kept track of the money.
Chatman: Yeah. Right.
Lewis: Right. And, but, no, but the reason that he was able to just run through the world without having the ordinary checks imposed upon him, is that the thing was so actually successful.
Chatman: Yes.
Lewis: That the revenues generated—
Chatman: That’s right.
Lewis: By the exchange were so crazy that the venture capitalist looked at it and said, “Alright, this is different,” but if, and yes, “something bad might happen, but the bad thing happening is not nearly as bad as us missing out on the next Google.”
Chatman: Yeah.
Lewis: And I had, I don’t know how many venture capitalists tell me this might be the next trillion-dollar company.
Chatman: Yeah.
Lewis: And Sam may be the first trillionaire.
Chatman: Yeah.
Lewis: That they thought it had that kind of scope. And so, it tells you about like how loosely the, our conventional world holds its principles.
Chatman: Right.
Lewis: That if when they’re faced with an incredible—
Chatman: Right.
Lewis: Temptation—
Chatman: Yep.
Lewis: That you drop the principles. And it wasn’t just the institutions that did this. Everybody, the celebrities did this, politicians did this.
Chatman: Yeah.
Lewis: There was a kind of a fear of missing out on a thing. And the thing was fun, and it was going, moving fast. And Sam was kind of delightful to be with every time—
Chatman: Yeah.
Lewis: He walked into a room. Everybody wanted to listen to no one but him. And—
Chatman: And the numbers were enormous. I mean, so they were thinking the money in Alameda was like—
Lewis: They were thinking—
Chatman: Rounding error.
Lewis: Yes.
Chatman: $8 billion. What? That’s nothing. We could cover that in 10 minutes.
Lewis: So, but the, so the, it does, I guess one of the takeaways, it’s one of the boring takeaways, but it is a takeaway from the story is, “Yeah, you can’t have financial markets without regulators.” I mean, they’re not going to work. They, you’re going to have violation of trust after violation of trust.
Chatman: Yeah.
Lewis: And funny, if you look at our financial market, at the traditional financial markets, we’ve done a pretty good job at minimizing the amount you have to actually trust somebody, right. Because the regulators—
Chatman: Right.
Lewis: They’re watching them for you, because you’ve got things like deposit insurance and crypto, oddly born out of complete mistrust of—
Chatman: Right.
Lewis: Of the existing financial system. Born out of a kind of mistrust of other people, created to sort of end the need for trust, creates these institutions that require us to trust them even more.
Chatman: Yeah.
Lewis: It’s a strange event.
Chatman: It’s ironic.
Lewis: It is ironic.
Chatman: Yeah.
Lewis: Anyway, I, the, if I wanted to convey to an audience, like, who hadn’t read the book, the main thing I wanted them to take away from the book, is just pleasure. The story is so incredible.
Chatman: Yeah.
Lewis: I don’t know what lessons there are in here.
Chatman: Yeah.
Lewis: But it’s just like an amazing story.
Chatman: Yeah. Well as a psychologist, he’s such an interesting character.
Lewis: Yeah.
Chatman: Yeah. Is this Austin here? Austin.
Audience 1: He’s over here.
Chatman: Oh, Austin. Hey. Austin’s going to ask some questions from the audience.
Lewis: Are these curated?
Audience 1: Maybe.
Chatman: By Austin in real time.
Lewis: Right. Good.
Chatman: He looks trustworthy.
Austin: I would not say the same. So, we’ll change that just a little bit. We’ll switch over to “Moneyball” for a bit. You mentioned that Sam was part of the “Moneyball” generation—also included in that is me. I was 8 when the book came out and then ended up spending some time working for the Milwaukee Brewers. And one of the things I noticed, and granted I had never worked in a front office before, but compared to what you described in Oakland to what I experienced in Milwaukee, the front office was very white. It was very male. Didn’t have, instead of it being all ex-players, it was a mix of some ex-players and people like me, who had maybe played in college, but were, there’s totally to do analytics. Over the past few years, and from some of my buddies who’ve worked at the Dodgers, we’ve seen this change into becoming almost the Ivy League Boys; Club, instead of it being the Baseball Boys’ Club, it’s the Ivy League Boys’ Club. That’s still problematic in my view. So, what would you recommend baseball do to try and fix it to be more representative of maybe just the fan base of the game?
Lewis: Yeah, I don’t know. I don’t know if it has to be representative of the fan base of the game to be good management, but you’re touching on something that’s really interesting to me. So, it is true. in 2002, when you walked into the front office, it was, the dominant culture was the scouting culture. You, it were kind of people who had played in the Minor Leagues, very seldom actually former Major League players, but people who were college players, people who hadn’t valued their formal education very highly. And the, and it was an old boys’ club as opposed, and it’s become a new boys’ club. The problem with the old boys’ club was that it was impervious to like new ideas. It didn’t have any that, the amazing thing about the “Moneyball” story was that it was available to be written in 2002 when most of the ideas that were going to transform the game had been cooked up in 1977. And that for 20-something years, or little, until the Oakland A’s started to grab these ideas that nobody thought they were worth paying attention to, ’cause they were hatched by people who were outsiders. So there was, the revolution happens outside the game. The inside is arrogant, smug, all kind of the same, monoculturey, and so doesn’t assimilate these new ideas. What’s happened? It’s like, “Yeah, the management’s now smarter. It’s, it is better managed.” It is true that relying on better data and better analytics gets you a better outcome than just relying on the intuition of the old boys. But you do lose something, and you, there is sometimes something to that intuition and you lose, you do create an environment where everybody’s kind of thinking the same way all over again. It’s just a, it’s a different way, but they’re all thinking the same way. And I think introducing, I mean the important thing is a kind of intellectual diversity, and you can get that a lot of different ways. But opening what has become the, I mean the nerds are now running the show in baseball, opening that room to some people who aren’t, it seems really important to me. And I think even Oakland A’s would tell you that right now. Yeah.
Austin: Perfect. So then one final question, we’ll build off of effective altruism. It’s something we’ve kind of seen before throughout the, I guess the Silicon Valley mindset. We’ve seen with Elizabeth Holmes thinking that Theranos was going to be this revolution that would change health care forever. Andreessen Horowitz uses the word techno optimistic manifesto. Does this just seem like a rationalization of Silicon Valley save the world, and maybe Sam kind of fell into that? Or do you see Sam as a different character who fell into something completely unique?
Lewis: So I don’t think Sam is principally a Silicon Valley character. I think of him as a creation of Wall Street. That if Sam, virtually any other period of human history, Sam would either have been someone’s food or would’ve been like a high school physics teacher or a math teacher or maybe a college professor. The—
Chatman: Hey now, come on.
Austin: Continue.
Chatman: It’s OK.
Lewis: Not a good college professor.
Chatman: Yeah, no, he’s super smart.
Lewis: No actually, I think he’d been a great college professor.
Chatman: We currency—
Lewis: No, I think he’d been—
Chatman: Intelligence.
Lewis: I think, think he was born, his parents were professors, kind of assumed he was going to be a professor. He ends up disdaining professors like he just disdains every other grown-up and everything that’s ever been thought or said, including Shakespeare. I love that Sam Bankman-Fried, when he is in high school, argues that Shakespeare sucks. And you can—
Chatman: Yeah.
Lewis: You can prove this statistically.
Chatman: Yeah.
Lewis: It’s just like, it’s just a different way of thinking about the world. So, why isn’t Sam Bankman-Fried just in that role as opposed, and it’s because Wall Street evolved to, got to a point where, has gotten to a place where the things that Sam Bankman-Fried’s mind can do, are highly valued on Wall Street. And there are these institutions, especially the high frequency trading firms, that have become machines for turning math people into money people. And he, I don’t think Sam Bankman-Fried, would’ve ever have landed in Silicon Valley and started a company. People would’ve left after two days. You know, that I didn’t have the company, he didn’t really have that management creator sort of gene. What he had was the trader in him. And so, yeah, he interacted with Silicon Valley ’cause he was raising venture capital. He didn’t think much of it, but that doesn’t, there’s a long list of things he didn’t think much of. So, but I don’t think, I don’t think that’s where, that’s he doesn’t really, he’s not a creature of the place even though he is born out here. He’s a creature of modern Wall Street, and it’s modern Wall Street that has a bit to answer for in him. Not really Silicon Valley.
Chatman: Yeah. Great. Well with that, before you leave, I wanted to, so Michael is actually a big swimmer, and he’s actually pretty fast.
Lewis: So that’s, neither one of those things is true.
Chatman: You know for, he’s pretty—I see him in the pool—he’s pretty fast. I was going to say for people of our generation—
Lewis: So—
Chatman: And so we’re a public university, and we don’t have a lot of cash, but we do have a ton of talent. So, I brought a great crew here to thank you for visiting with us today. We have three of our world class swimmers. We have, and you guys come up as I call you, we have Bjorn Seeliger. Bjorn is a Haas undergrad student. He’s on the Cal Men’s Swim Team, who, they’re two-time defending national champions. So, and I’m just going to go through this for a second. So Bjorn swims—
Lewis: Hey, good to meet you.
Chatman: Michael, you need to listen to this.
Lewis: I’m listening.
Chatman: Because this is going to humble you. So Bjorn swims, Bjorn is a sprinter. He swims free, fly, back, and was an Olympian for team Sweden in the 2020 game. And I just wanted to give you some time. So his, the fastest, and I may not be right about this, but the fastest 50-meter free. And actually Bjorn helped me with backstroke, not, it’s didn’t really help that much but, his fastest 50-meter free is 18 seconds and 71 10th. Is that right? Is 18.71, is that your fastest?
Seeliger: 18.21.
Chatman: 18.20, Oh, sorry. So much lower. Right. OK. So think about your time compared to that. Then we have Tyler Kopp, who is also a Haas undergrad, also on the men’s team, also part of our NCAA Championship Team. He was a finisher at the U.S. Olympic trials. He’s a long distance swimmer. That’s more of my world. So he swam a 16.50. That’s if you have a, like a regular sized pool. My pool, 75 laps. He swam that in 14 minutes and 58 seconds. OK. Seventy-five laps. Right. Takes me up to three days or so to do that. And finally, we have Will Roberts who transferred to swim at Cal. You were at Michigan before, right? Is that right? So Will transferred for graduate school. He was part of the NCAA team as well. He is also a distance swimmer and I saw a 500-free time, which is 20 laps of 4 minutes, 17 seconds, 20 laps. He’s now working in San Francisco and helps athletes start businesses. So, the three swimmers have some gifts for you to thank you for coming to visit.
Lewis: Thank you, so—
Seeliger: I liked to mention something. So you’ve mentioned that you almost killed, you almost killed Sam Friedman on a two-hour walk. So, we want to make sure you don’t die on a two-hour swim. And we got a little bit of things for you here today. So thank you for coming with you talking.
Lewis: Thank you. Thank you.
Chatman: Thank you, Michael.
Lewis: Thank you.
Chatman: It’s so great to see you. Thanks for coming. Bye, great to meet you. Hey, thanks everybody. We’ll see you next semester.
The list is built on exclusive LinkedIn data that examines career outcomes of MBA alumni, including job placement rates, advancement to senior-level positions, and network strength.
“As LinkedIn notes, MBA graduates benefit from the “career-boosting power of the MBA,” said Abby Scott, assistant dean of the Haas Career Management Group. “This ranking captures the depth of our network, recruiter interest, and notably both the C-suite track and entrepreneurial experience.”
“Going to the Haas School of Business was a transformative experience for me,” Daniel Feldman, MBA 10, said in the LinkedIn article. “Yes, it is possible to acquire the knowledge in other ways. What cannot be replaced is the collaboration experience with some very smart people.”
The ranking is based on the following five pillars, including:
Hiring and demand, which tracks job placement rates and labor market demand, focusing on recent graduate cohorts from 2018 to 2022. This assessment is based on LinkedIn hiring data and recruiter InMail outreach data.
Ability to advance, which tracks promotions among recent cohorts. It also traces how quickly all past alumni have reached director or vp-level leadership roles. This assessment is based on standardized job titles.
Network strength, which tracks network depth, or how connected alumni of the same program are to each other; network quality of the recent cohorts (2018-2022), measured by average connections alumni have with individuals in director-level positions or above; and the network growth rate of the recent cohort—before and after graduation. This assessment is based on member connection data.
Leadership potential, which tracks the percentage of alumni with post-MBA entrepreneurship or C-suite experience.
Gender diversity, which measures gender parity within recent graduate cohorts.
Established with a philanthropic investment of almost $17 million from Robert G. and Sue Douthit O’Donnell, the new center will bring together the best minds from a wide range of fields.
Berkeley, Calif.—Ever since Nobel laureates George Akerlof and Daniel Kahneman created a 1987 UC Berkeley course that broke the rigid barrier between psychology and economics, the university has led the way in bringing the once-disparate disciplines together into the field of behavioral economics.
Professor Ulrike Malmendier (Photo: Copyright Noah Berger)
“We went from neoclassical economics that considered humans to be perfectly rational, to behavioral economics that brought in social psychology,” says Ulrike Malmendier, the Cora Jane Flood Professor of Finance, who will serve as the center’s faculty director. “Now we want to move the needle further, bringing together the best minds for rigorous research on human behavior from the sciences more broadly—including neuroscience, cognitive science, biology, medicine, epidemiology, and genetics.”
Funded with a philanthropic investment of almost $17 million by Bob O’Donnell, BS 65, MBA 66, and his wife, Sue O’Donnell, the center aims to become the preeminent hub for the maturing fields of behavioral economics and finance, bringing together leading researchers from a wide range of disciplines for collaboration, conferences, and bootcamps, as well as funding promising PhD students and postdoctoral scholars. The center will also host the prestigious Behavioral Economics Annual Meeting (BEAM), co-founded by Malmendier, every three years.
A nexus for cross-disciplinary research
O’Donnell says he was inspired by the pioneering work of Kahneman, Akerlof, Malmendier, and others who gave Berkeley its leading position in behavioral economics. “UC Berkeley is dedicated to integrating business education with other disciplines on campus, which is essential in this area,” he says. “It should have a center devoted to continuing this work.”
The center, says Berkeley Haas Dean Ann Harrison, will create a far-reaching impact across UC Berkeley, a research powerhouse with many areas of strength. “The goal is to cut through barriers that traditionally hinder research across disciplines, such as different ways of presenting data and publishing results, and bring people together in a different way than what’s usually done,” she says. “The O’Donnell Center will be the nexus of a new form of cross-disciplinary collaboration that pushes behavioral economics toward the future.”
Beyond ‘homo economicus’
Traditional economics was based on the assumption that human beings are perfectly rational, profit-maximizing “robots”—sometimes referred to as “homo economicus” or “economic man,” Malmendier says. Behavioral economics brought in insights from psychology and human behavior to explore the predictable foibles in our thinking, such as decision-making biases, fears of losing out, lack of self-control, and overconfidence. A classic example is Kahneman’s pioneering work with Amos Tversky on loss aversion, which showed that people are willing to take greater risks to avoid a loss than to secure a gain.
These ideas have been integrated into economics and finance departments around the world and have deeply influenced public policy and practice. For example, after Nobel Laureate Richard Thaler and Cass Sunstein developed the concept of the “nudge”—interventions that spur people to act in their own self-interest, such as enrolling in a retirement savings plan—hundreds of “nudge units” were established in governmental and private-sector organizations around the world.
Many other Berkeley Haas researchers helped pioneer this intellectual revolution, including finance professor Terrance Odean, BA 90, MS 92, PhD 97, the Rudd Family Foundation Chair, who was convinced by Kahneman to pursue a doctorate in finance rather than psychology and whose work reveals investors’ flawed decision making.
O’Donnell, the center’s founding donor, says he often applied insights from behavioral economics during his career as a portfolio manager for a large mutual fund group. “It represents a further step in the evolution of financial theory comparable to the development of the efficient market hypothesis,” he says. “When combined with existing financial theory, I believe that its insights enhanced results for my clients.”
Yet, during the 17 years he taught an investment class in the Berkeley Haas MBA program, O’Donnell says he sometimes encountered skepticism when he introduced ideas from the field. “Indeed, one student asked, ‘Isn’t all this kind of woo-woo?’”, he says. “Several years later, that student told me how perspectives from behavioral economics had helped her career in finance.”
Experience effects
Now, after more than three decades of foundational work, it’s time to move behavioral economics past its adolescence, Malmendier says. “Behavioral economics made progress by including psychology, but we didn’t include all the other sciences.”
Malmendier, whose groundbreaking work on “experience effects” earned her a Fischer Black Prize in 2013 for the top economist under the age of 40 and a Guggenheim Fellowship in 2017, has focused on complex economic behaviors. She has studied how stressful experiences with recessions, layoffs, inflation, housing bubbles, and political repression make consumer and investor behavior more cautious and risk averse for years afterward, and she has explored how stress can affect our health, careers, education, and other aspects of life in dramatic ways.
To further that work, Malmendier aims to bring a wider range of researchers together and break down silos. For example, collaborating with neuroscientists, neuropsychiatrists, biologists, medical researchers, and epidemiologists who have studied stress and trauma could more precisely demonstrate how past experiences shape our actions today and across generations. Stress impacts the big variables that economists study, such as completing an education, choosing an occupation, and deciding to have a family, she says.
“As we walk through life, our outlook on the world changes, especially if we suffer trauma,” she says. “Neuroscience says our brain gets rewired. There may be a long-term impact of stress on our longevity, on our aging, and on our health.”
Questioning the status quo
Malmendier, who now serves on the German Council of Economic Experts, is passionate about the potential of behavioral economics to help leaders create better solutions to the most complex and urgent problems of our time—from fighting climate change to battling inflation and avoiding financial crises. “If leaders keep in mind people’s emotions, their personal histories, and their psychologies, they can engineer ways to make things more predictable and give people more control over events help them live better lives,” she says. “That is our ultimate goal.”
Professor Stefano DellaVigna
Moving the field forward will also involve rigorous research to reexamine what has come before. For instance, a recent paper by center co-founder Stefano DellaVigna, the Daniel E. Koshland Senior Distinguished Professor of Economics and professor of business, with Elizabeth Linos of Harvard, suggests that leaders should get more realistic about nudge policies—and better at incorporating them into practice. Two government nudge units opened their records to allow the researchers to look at all their interventions. By examining 126 randomized controlled trials of nudge policies involving 23 million people in the United States, the researchers found that nudge interventions are on average effective, increasing the desired outcomes by about 8%. However, the effects are less than those in published academic papers—about one-fifth the size. The authors attribute the difference to publication bias, or the tendency toward publishing only large, surprising results.
“Our study stresses the importance of research transparency,” DellaVigna says. “This transparent access is quite unique and shows a further innovative impact of behavioral economics, which has led to more evidence gathering within governments.”
In a second paper, DellaVigna and Linos, along with Department of Economics doctoral student Woojin Kim, found that even when nudge policies are found to be effective, public agencies implement them only about a quarter of the time, often due to organizational inertia.
In addition to Malmendier and DellaVigna, the center will include a host of affiliated researchers from Berkeley Haas and Berkeley Economics, as well as from across the university. They include Berkeley Haas professors Ricardo Perez-Truglia, Ned Augenblick, Don Moore, and Gautam Rao, PhD 14—who will join Haas in January from Harvard University—as well as Dmitry Taubinsky of Berkeley Economics and others. The founding gift will establish a permanent endowment to support the center and some of its ongoing activities.
Minister Nishimura Yasutoshi (center) speaks with Acting Dean Jennifer Chatman (right).
Nishimura Yasutoshi, Japan’s Minister of Economy, Trade and Industry (METI) visited UC Berkeley and the Haas School of Business this week to spread the message that Japan is making significant investments to transform its economy through entrepreneurship and innovation.
While Japan may be best known for its big companies like Toyota and Sony, “They began as startups first of all,” said Minister Nishimura, speaking through an interpreter in a conversation with Haas Acting Dean Jennifer Chatman. “Entrepreneurship is really in the DNA of the Japanese people.”
Invited to campus by the Clausen Center for International Business and Policy as part of events surrounding the Asia-Pacific Economic Cooperation (APEC) Summit in San Francisco, Minister Nishimura’s visit also expanded the collaboration between UC-Berkeley and the Japan External Trade Organization (JETRO). During the event, Caroline Winnett, Executive Director of the Berkeley SkyDeck accelerator, signed a memorandum of understanding with JETRO to further advance entrepreneurship, innovation, and scholarship.
Minister Nishimura also toured SkyDeck, which to date has hosted about 60 Japanese startups through its JETRO partnership.
Berkeley SkyDeck was thrilled to host Yasutoshi Nishimura, the Japanese Minister of Economy, Trade, and Industry, for a visit to SkyDeck, following an MOU signing with @JETRO_InvestJP to launch our second international program. Learn more here: https://t.co/5SXLsxzXfyhttps://t.co/coKXsjQwyA
In addition to the SkyDeck collaboration commemorated at Minister Nishimura’s talk, Berkeley Haas has a long tradition of partnering with Japanese companies and universities to promote innovation and entrepreneurship. In the past year, the Berkeley Haas Entrepreneurship Program has worked with Tohoku University to train top startups from the Sendai region in Lean Launch methodology. Haas has also hosted leading Japanese companies at the Berkeley Innovation Forum to explore building their innovation and entrepreneurial ecosystems.
To achieve its goal of a tenfold increase in the number of startups over the next five years, the Japanese government plans to send 1,000 entrepreneurs to the Bay Area over a five year span, and to invest in university partnerships, noted Haas Continuing Lecturer Jon Metzler, who helped organize the METI visit to Haas.
“The government of Japan is taking a number of measures to stimulate entrepreneurship, increase new venture formation, and nurture entrepreneurs with a more global mindset—including sending promising entrepreneurs to acceleration programs like Berkeley SkyDeck,” Metzler said.
‘Unicorns and decacorns’
METI Minister Yasutoshi Nishimura spoke to the Berkeley community on Japan’s innovation goals.
After an introduction by Associate Professor Matilde Bombardini of the Clausen Center, Minister Nishimura delivered prepared remarks and sat for Q&A with Acting Dean Chatman. He said everyone who has visited Japan in the past few years is surprised by how much it has changed.
“In terms of macroeconomy, over the past 30 years because of deflation, it has been a challenging time for Japan. But now we are in an era when big changes are about to take place,” Nishimura said. Within the population of about 125 million, many entrepreneurs have been content to find success within the country. But Nishimura is encouraging young entrepreneurs to think big and “go global.”
“We are looking toward the emergence of many unicorns and decacorns,” he said.
Nishimura also talked about plans to build a next-generation semiconductor fabrication facility in Hokkaido, which will adopt a 2 nm fabrication process—a major technological leap compared to current fabs in Japan.
In addition to the Haas’ Clausen Center for International Business and Policy, the event was hosted in partnership with the Berkeley APEC Study Center, the Institute for East Asian Studies, the Center for Japanese Studies, and Berkeley SkyDeck, with support from the Haas Asia Business Club. The Japan Society of Northern California also helped promote the event.
Left to right: Chris Bush, executive director of the Institute for Business Innovation; Berkeley Haas Lecturer Jon Metzler; METI Minister Yasutoshi Nishimura; Acting Dean Jenny Chatman; and UC Berkeley Executive Education CEO Mike Rielly.
Ruth Porat, president, CFO, and chief investment officer at Alphabet and Google, ranks among the most influential women in finance, having earned spots on both Forbes’ and Fortune’s“Most Powerful Women” lists.
Porat joined the Nov. 1 Berkeley Haas Dean’s Speaker Series, discussing her rich journey from Wall Street to tech.
As a child, Porat said her parents, both scientists, told her to “learn, study, embrace the new, and work really hard.” “And when I graduated from college, I thought I would end up going into labor law,” she said. Later, while earning an MBA degree at Wharton, her path took a turn while taking an amazing mergers and acquisitions accounting class. “That was the game changer for me,” she said. “I ended up applying to Morgan Stanley, starting my career there, and thinking that was the only thing I would ever do: mergers and acquisitions. But as the world changed, I kept moving around.”
After decades on Wall Street, including serving as CFO of Morgan Stanley from 2010-2015, Porat pivoted to the world of technology, joining Google in 2015 as chief financial officer. At Google, Porat was one of the key team members who worked to shift the company’s business model and its name to Alphabet. (Alphabet is the parent company of Google and several former Google subsidiaries.)
(Watch the DSS interview with Ruth Porat)
Even with her years of finance experience, she said she found herself constantly adapting to the new environment at Alphabet—whether by learning new technical tasks or working with new teams.
“The most important thing, from my perspective, is drawing on what you know, but being authentic about what you don’t,” she said. “So just go with it, learn, know that you’ll figure it out.”
As Google’s longest-serving CFO, Porat continues to utilize her strong finance background to lead.Throughout her career, Porat said she has also discovered the importance of what she calls a “work-life mix.” Unlike the traditional “work-life balance,” which can lead to guilt, she said she prefers to look at life as a kaleidoscope—in which both personal and professional lives co-exist.
“What I always tell people on my teams is, ‘Look, I trust you. That’s why you’re on my team,'” she said. “If there’s something you need to do at home with kids, with family, do it. Don’t feel guilty, don’t check in with me. And when you need to be here, you know, really torquing it for work, you’ll be doing that. It works out over time.”
Read the full transcript:
Good afternoon, fellow Bears. How are you? I’m Jenny Chatman. I’m the acting dean at Haas. It’s a delight to see you all here for this exciting event. Welcome to today’s Dean’s Speaker Series.
I’m thrilled to welcome Ruth Porat, a powerhouse woman in finance. Ruth has broken barriers her entire career from her start at Morgan Stanley in the mergers and acquisitions department to her current role as president, chief investment officer, and CFO at Alphabet and Google. Ruth has seen finance through many different lenses, private, public, and tech. It is said that she has a magic power of charting paths through uncertainty, especially when she led through the financial crisis of 2008. Ruth has also been decisive in initiating change coming into Google in May of 2015 and being a key member of the team that shifted the business model to Alphabet.
A few months later, Ruth even finds the time to mentor others and serve on several boards, including Blackstone, the Council on Foreign Relations, and Bloomberg Philanthropies. In our ever-changing world, I’m grateful that we can learn from someone who has led with resilience and strength throughout her career.
Ruth, thank you so much for taking the time to come to Haas and speak to us today. So, just a note on our process today: You have note cards on your seats. If you have a question anytime throughout the conversation, please jot down that question, and be sure to put your name and which program you’re from and give it to our monitors, and they will get the question to our question asker. So, we’ll be collecting those cards throughout the event, and we’ll save time at the end to answer those questions. So, I’m now going to turn it over to Madhu Gupta and Paula Gutierrez, who are going to moderate today’s discussion. Thank you.
– Good afternoon everyone, and thank you so much Ruth for being here. We’re super excited to have you.
– Just a huge thanks, just wonderful to be with all of you, and thank you for those very, very kind comments. It’s wonderful to be with the group.
– My name is Paola Gutierrez.
– And I’m Madhu Gupta.
– And we’re both second-year, full-time MBA students. As a school with a strong interest and love for technology, our community is really excited to hear from you today. In our time together, we want to take you and our audience through a journey, first learning about your career, then your leadership development, your strong passion and advocacy for women in technology, and then, finally, your outlook on the future. Does that sound good?
– Sounds good. Let’s go.
– So you come from a family of scientists—your father was a physicist, and your mother was a psychologist. And you yourself have three degrees from economics, international relations, industrial relations, and an MBA from Wharton. So tell us a little bit: What got you into the business world, and why finance as a place to begin your career?
Ruth Porat: So I feel blessed to have had the parents I’ve had. They were humble immigrants who were very focused on education. They always said, “Education is your passport for life.” And my dad, as he said, he was a physicist. We ended up in California when I was pretty young. He was at the Stanford Linear Accelerator Center. And as a young child, when I was in elementary school, he used to take me up to Slack, and we would build gadgets. He taught me how to use a soldering iron when I was in elementary school. And for those of you who don’t know what that is, it gets to a pretty high temperature, and you can melt things, so you can combine component parts. We built a radio—it didn’t really play good music, but I was proud as an elementary school kid to build that. And my mom was a psychologist. And as a young child, she said it was really important as a woman to have a career outside of the home. And she showed me that it was possible. And so their message early on was always, “Just learn, study, embrace the new, work really hard.” And when I graduated from college, I thought I would end up going into labor law. One thing led to another, graduate school, open doors. I ended up taking an amazing class—a mergers and acquisitions accounting class was the game changer for me. Go figure. But it really was. And I ended up applying to Morgan Stanley, starting my career there, and thinking that was the only thing I would ever do. Mergers and acquisitions. But as the world changed, I kept moving around.
– Wow, you’ve had an incredible career journey. You spent 27 years in Wall Street, and then 2015, you joined Google as CFO. So walk us a little bit through that journey and how you navigated two of the most challenging industries for women—I mean both banking and technology—and how that transition was for you.
– I think there were, over the years, I came up with a couple of rules that I kept going back to. And one of the most important ones, and I tell my teams this all the time, “Anchor everything in data, and the rest will follow.” And I think as a young woman growing up in the financial services industry, when you have data and you lay it out in a compelling way and it tells a story, and in particular, when you build sensitivity analysis that forces engagement on, “So, what are the key variables? Is it revenue growth, or is it operating expense expectation? Why? Where do you think the world will go?” It sort of just starts to transcend “Who are you,” and, “Why are you there?” And you go right to data, and there was an expression at Morgan Stanley: “The answer is a number.” I think that’s really true. And I always tell my team, “Sensitivity analysis, grab people in a different sort of way.” So anchor in data. I think the other thing that’s really important is: Find a great boss. So, my first project at Morgan Stanley, I was working around the clock, and I never got to go to even internal meetings, let alone client meetings. And finally, after about a month, I was brought into a meeting, and the managing director looked at this guy and said, “So are you the one that I keep hearing about?”, which sort of made it pretty clear he was taking credit for my work, and it taught me, “Go find somebody you really want to work for who will take a risk on you and has your back.” And I did that repeatedly. And probably one of the most important stories for me was, I worked for somebody who eventually became the head of equity sales and trading. And when I was asked to run technology equity capital markets, which is a joint venture between banking and sales and trading, he called me into his office and he said, “I think you’re going to soar, but if you slip, I’m here to backstop you. I will be your senior air cover.” And I just thought that that was such an important phrase. We all need senior air cover, and we all need to be senior air cover for someone. So that’s the second lesson. And then the third, which is sort of a corollary, is when you have that great person, you can also have open-ended conversations about your career. So, my go-to phrase that I think has served me well—and I always advise everyone to use—is: Don’t pinpoint where you want to be and at what time, but say, “What’s my highest and best use,” whenever that opening comes. Because every door that opened for me, virtually every door that opened for me, what came out of that kind of conversation, what’s my highest and best use? And then it would, that person I trusted who took a risk on me, who was backstopping me, would point to something, and we’d have an open dialogue about whether it made sense, whether I wanted to do it. So those would probably be the three most important rules.
– Just a quick follow-up. So many of us, at least MBA students, are looking at pivots in our career. So in that pivot that you made from banking to tech, were there any points of time where you felt a little nervous or kind of unsure of what was what you were going to be facing, and this also very new and growing industry?
– Well, I think pivots are great. I think pivots actually, the most important thing from my perspective is drawing on what you know but being authentic about what you don’t. And so, the pivot from Morgan Stanley to Google wasn’t as dramatic as it seems. I had run tech banking at Morgan Stanley, I’d taken Google public, I knew a lot of the people, but a lot was definitely very new, but probably one of the most important pivots I made. Going back to this conversation, highest and best use, I was asked at one point at Morgan Stanley to take over and run the investment banking business focused on financial services. So banks, insurance companies, asset management. And I had done tech mergers, private equity. So I had a very clear answer, which is, “That sounds horrendously boring.” Like, there’s no way I want to do that. But somebody I trusted who ended up becoming president of Morgan Stanley said, “You got to trust me on this one. Running financial institutions is actually a lot like running tech—25% of the global economy, multi-sector, tech, you’ve got hardware, software, semis, in financial institutions, banking, insurance, et cetera. You got to try this.” And he was trying to be helpful. The first meeting he set up for me was with Larry Fink, who’s the founder and CEO chairman of BlackRock, largest asset manager. And I’m thinking, “OK, this is terrifying.” I know nothing about asset management at this point. So to your question, where there are moments where it’s like, “Why am I here?” Yes, but I concluded, and he was trying to do me a favor, introduced me to one of the most important people in that sector. And I said, “They have a section of BlackRock that is all about technology. I’ll lean into that. I won’t pretend I know asset management, and that’s the most important thing.” Be authentic with what you know—you’ll learn the rest later. And just one last bit, the transition to Google, there was a lot I didn’t know, and I was constantly Googling terms, and I literally, at one point, I’m in a meeting with Larry Page and Sergei Brin, and Larry turns around and sees me doing this, and he said to the group, “She’s Googling everything.” I’m like, “That’s OK. I’m learning.” So just go with it, learn, know that you’re not, you’ll figure it out.
– You’re doing, I guess now, a slightly less dramatic pivot, but you’ve been CFO for 14 years, and now in July, you became president and chief investment officer of Google. So why now? And why the need for this role?
– Well, I felt like the position I’ve had as CFO and still have, it’s a privilege to be in this role, and it’s been extraordinary. And as CFO for eight years and the longest-serving CFO—and I’m still the CFO—and I will, I’m still massively focused on landing our plan and where we go from here. But it just seemed like the right time. Fourteen years as CFO, longest one at Alphabet and at Sundar, and I talked about it, there’s a real opportunity to say, “Where do we sharpen our focus on investments? How can he and I work together on that? And what’s the interplay between investments and global policy?” And I think it’s an exciting time on this planet, and so, it just seemed like the right time. So I’m grateful for it.
– Thank you, Ruth, for sharing your early interest in finance, your career, and how you’ve grown along the way. Shifting gears now a little bit to learn about who Ruth is and the personal experiences that have shaped her. I recently read that, when you interview candidates at Google and Alphabet, you often ask about their battle scars, which, correct me if I’m wrong, but for the audience here, asks, “What has happened to you, and how have you learned from it?” Today, we would love to pose that same question to you and learn a little bit about your personal battle scars and how they have shaped who you are today.
– I do ask that question in every interview. I think it’s a really valuable one to see, “How have people learned, and what pattern recognition do they have as a result of some of the toughest things that you’ve been through in life?” And so, there are probably two worth noting on the personal, ’cause you call, you said personal battle scars on the personal, I’ve had cancer twice. First, in 2002, 2000, I’m sorry, 2001. I’m blocking the whole thing out. 2001, and then again in 2004. And at the time, my kids were very little, first time around 5, 7, and 9, and it was clearly terrifying. I’m completely fine. I’m grateful for the amazing care that I got, but if it taught me anything, it’s to make sure everyone knows: Don’t assume that you can plot out a life on a timeline and defer to later what you want to do now. When I was in the hospital for surgery, I had these three amazing kids. I’ve been married to this amazing man forever. I am really happy with my career there. There were, I was the oldest in the cancer surgical center, and I looked at younger women, and my fear for them was “Had they done what they had wanted to do?” So, all I can say is, whatever it is, “Grab life by the moment.” Every day really is precious. And don’t defer because you don’t actually control the timeline as much as we all would like to think, professional, but I’m fine. So that’s the good news. Medical care is amazing, in terms of professionally, probably the biggest battle scar was going through the financial crisis. And because I didn’t actually go with my instinct on that, no way am I going to do financial services. I did end up running it in 2006, and then crisis, when you were in a bank started in 2007, 2008, secretary Hank Paulson asked if I would, a team of us from Morgan Stanley would, we got seconded to the Treasury Department. I worked with him very closely on Fannie Mae, Freddie Mac, when we went through the various Lehman, et cetera, weekends, and then AIG. And it was extraordinary to go through that and just really see the imperative of making crisp decisions at the right time, in the right way, with the right team.
– Thank you for sharing. I know many of us in this room can draw inspiration from the immense strength and courage with which you’ve navigated these very difficult experiences. Now forging a path in a successful path, I should say, in these industries, does not come without personal sacrifices and evaluating trade-offs. Now, of course, you are no stranger to that, having navigated many challenging periods in your professional life as you just mentioned. So navigating the 2008 financial crisis, a long battle with cancer, and most recently the pandemic and tense economic conditions, what have been the most important lessons that you have learned along the way—and how have they changed the way that you show up and lead every day?
– That is a great question. I think one of the most important things I come back to all the time, I say it frequently, is “the absence of information is filled with dirt.” And when you’re going through any crisis, personal or professional, the absence of information is filled with dirt. Those around you fear the worst. And one of my kids, ’cause I also use this expression at home, said, “Actually, mom, when you’re a teenager, sometimes it’s filled with fun,” and he’s totally right. But fundamentally, the absence of information is filled with dirt. And I think that, to me, the fear that our teams had going through COVID, you don’t know everything when you’re going through a crisis, obviously it’s so rapidly evolving, you don’t want to overstate and then under-deliver, but sharing what you know, how you know it, making it clear you care and you want to bring people along, is absolutely imperative. And when I look at all of you thinking, you’re about to enter the workforce, I tell my teams this all the time because also, it’s really important actually, as when you’re on a team, if you don’t tell your boss what you’re doing, sometimes they assume, “Well maybe they’re not actually doing very much or doing what I want them doing.” Communication is really important. I had a boss who said, you can never over-communicate enough. I think that’s right. That’s probably one of the most important. And then the second really important one is something I learned actually from Hank Paulson, secretary Paulson as we were going through the financial crisis. And as I’m sure many of you remember, at one point, the biggest concern was about Greece, and was Greece at a tipping point? And he said the problem when you’re going through a crisis is, “You have to have the will and the means, the political will and the financial means, too often by the time you have the will, you no longer have the means.” Problems get bigger over time. And I think it’s very instructive for all of us. When you see an issue, it’s easier. First of all, it’s easier to prevent than to fix. And it’s easier to fix early than to let it grow. So act, be decisive, you’re always dealing with least-worst options. There’s no good option. Those would be some of the main lessons.
– Thank you. You touched upon how you have led through these very trying times for the world. And, of course, your incredible leadership has earned you the title of the most powerful woman on Wall Street. And one of the most powerful women in the world by Fortune and Forbes. I want to ask you, what do these labels mean to you, and how do you shoulder this responsibility for the women and minorities around you?
– You know, in the early days, it was uncomfortable to hear something like that. But then I realize what’s really important. I am here because of the many women before me who made this possible, my mom, who said, “Have a career,” and I saw you could be a great mom and have a great career. And oftentimes, I’d come home and wonder, “Why did everybody else get to come home?” And their mom was there, mine wasn’t. But I saw what an important role model to us. And she’s really, that generation cleared away so much our, my generation is trying to clear away more for all of you and other underrepresented groups. So I think it’s really important that we, A., understand and see the various roles that women and other underrepresented groups have in these industries and are there for one another. And really, again, that senior air cover backstop be there for one another. Some of the things that we may each think, we’re idiosyncratically going through it. No, probably a number of us have dealt with it before. And so having that open network is really, really valuable.
– Yeah, just to follow up to that, What do you believe is the biggest priority to get more women into tech and leadership roles?
– Well, I think for every organization, it has to start with tone from the top. ‘Cause tone from the top sets that expectation for all. But that’s not enough. You then, I firmly believe, need to ensure that the organization has invested in process systems, and I’m going to come back to it and data, at the end of the day, set your goals, hold yourself accountable, and see how you’re doing with data. Data will tell you, will make it really clear, elucidate where you’re missing. You’re falling short of expectations. But I think of it like any supply chain issue. If it’s not working, you need to basically go back through, “What is it, do a postmortem, what’s not working, what in our supply chain is not working?” And it starts with clarity about what your objectives are, the data, and then putting process around recruiting, retention, training, visibility, every element of it to make it possible.
– You’ve been a strong champion for women in tech basically for all of your career. Even in 2018, you joined your team in the walkout protesting sexual harassment at Google and at the Wall Street Journal Tech Live conference, you asked, “If the tech industry can make cars that drive themselves, why can’t it do better when it comes to sexual harassment?” Many of our MBA students, myself included—and we spoke a little bit about this before coming out to the stage—are focused on centering diversity, equity, justice, and belonging in their careers and future ventures. When you’re thinking of your role as CFO—and now as the chief investment officer—how do you make decisions to advance DE&I, not only in the makeup of employees and the organizational culture but also in the way that products and services are designed and taken into market?
– That’s a great question and so important. Look, I think it starts with a deeply held view. I have, Sundar (Pichai) has, our senior leadership has, that diversity is not, and diversity, equity, and inclusion in an org, is not just the right thing to do, but it builds a much better, stronger, more capable organization. The diversity of views lets you understand and see things that you don’t otherwise see. And so, everything I said about put process and systems so that you’re making sure that you have at the broadest representation that you’re supporting people throughout their careers, giving them the access, the opportunity is key. And then, as we talked about briefly, the impact on product is absolutely imperative. It goes to the same point, one of my favorite stats, 1.3 billion people on the planet have accessibility challenges. So when we think about Google and our mission to organize the world’s information and make it universally accessible, one of the important thing, universally accessible, 1.3 billion people on this planet are in need of some elements of what we can do with technology that will open the ability, access to information, access to different elements. And so it makes our products better. Everybody should be focused on this. I also, as a CFO, one of the things I’m really proud that we do, is we have a digital skills training program. And it started when our colleagues in New York wanted to find people from underrepresented communities in New York, train them to do IT support. Fast-forward many years, it was such a success, their conclusion was, “If we want to really have an impact, what we should do is create certificates that are portable,” which we now have nine, “Build a consortium.” We now have more than 250 companies in the U.S. More than half of the people who go through this program are from underrepresented groups. And what we’re doing is giving them access to high-growth careers. Well-paying careers. And what is extraordinary to me is, if you want to have sustainable economic growth in society, you need to have everybody participating. You need to address the opportunity gap. And so, we’re addressing it through our products, but also through other efforts where we can say, “How do people participate in this growing, thriving, changing economy?” And so, I am proud of it, it’s very core to the way we think about it.
– That’s amazing. Sometimes there are things that we can’t control based on the society and the systems that we work under. So, I want to switch gears a little bit and talk about the things that we can do personally to set ourselves up for success when we’re facing some challenges in our career. So, you’ve been very vocal about not liking and banishing the term “work-life balance” because you believe it sets us up for failure, both men and women. And you are a big advocate for a work-life mix. So can you kind of speak a little bit to what that means and how you’ve created that for yourself?
– Yes, it’s one of my favorite topics. I love your chapters back and forth here. So look, I think where you said it in the question, work-life balance, like balance, the physics of balance is really hard. And I think that when you’re trying to have balance, all you do is feel guilty that you’re not doing enough at work, you’re not doing enough at home. You haven’t, you’ve let somebody down. So the metaphor, you know, I keep coming back to is, “Life is like a kaleidoscope.” If you have one side that’s equal in size to the other, and one’s yellow and the other’s green, that’s pretty boring compared to what life really is. Lots of different shapes, lots of different colors, they move over time. And so, what I always tell people on my teams is, “Look, I trust you. That’s why you’re on my team. If there’s something you need to do at home with kids, with family, do it. Don’t feel guilty, don’t check in with me. And when you need to be here, you know, really torquing it for work, you’ll be doing that. It works out over time.” And to me, it’s that work-life, mixed kaleidoscope that’s really important. And you’re absolutely right. It is for all of us. All of us need to figure out in our lives, how do we actually combine a mix? And for me, a large part of it was kids, but it may be something else. It may be sports or community service or whatever it is, you need a mix. Because the other point is, if you don’t have a mix, I think you burn out on your job. There’s no way that any job, I love my job, I’m so grateful to have this opportunity, but if this was it, I can’t imagine that it would be completely all nourishing. So, figure out a mix, recognize that you’re, do it whenever you want to do it. No timeline thing. Going back to the first question and then that mix is going to nourish you over time.
– A quick follow-up on, you talked about kids was part of your mix and figuring that out. How did you figure out what was right for you and what felt right for you? If you know that being a mom was going to be a big part of that mix, or was that something that you tested, maybe a few things you didn’t like? Try some other things until you found the right recipe?
– Yeah, I probably, if my kids were here, I don’t know what they would say, but hopefully, it would be good. It does start with the fact that my parents were amazing, and as I said, with a mom who worked, I think that really helped because I had a pattern that I saw actually could work. And I think part of the mix element is I didn’t try and have two separate lives. My kids were very aware of what I was doing. And they met the people with whom I worked, so we played games. If I was working on a deal, I would explain how the globe worked and the markets where they open, and we would follow it. Which may sound like a weird set of games. Some of you’re probably like, “Wow, great mom.” But, you know, I, one thing I have right on my dresser ’cause it means so much to me working during the financial crisis, we were literally working around the clock and that AIG awful weekend, or Monday, Tuesday, Wednesday, rather, I was around the clock, and I came home and my kids had each written a little note to me, yellow sticky note, and it totally reflected their personality. The oldest must have been 14 or something at the time, was like, “Mom chillax, this’ll be fine.” Which is his personality. And then the middle guy was like, “This is so important for the country.” And the little guy was like, Mommy, hurry up and fix this because I want you back.” And it was, but they got it. They got, it was, I was doing something that mattered. And to me, that was because we always talked about it. And also because I was present when in everything important in their lives. So that is a way of saying, I really, this whole thing. Can you have it all? Well, I think you can, you just have to define what that is. Maybe there are plenty of things I haven’t been able to do and plenty of things where I wish I could have done more. But it’s a beautiful mix when you think about it. It’s the kaleidoscope.
– Thank you for sharing.
– Sure.
– Yeah. Thank you for taking us along your thoughts on balancing professional and personal lives. And I personally loved the kaleidoscope analogy, so I’m going to be using that. We are now at your, let’s see, eighth year at Alphabet and Google, and congratulations, what an incredible journey that has been for you. Google, as we know, is known for its transformative world, changing ideas, often being the pioneer of groundbreaking innovation. But investing into such projects requires a high degree of risk and uncertainty. How do you evaluate and measure the impact and potential of these projects against the risk and the potential consequences they may carry?
– Yes, it’s a great question. I think, for all of us, coming out of business goals and focusing on finance and capital allocation is one of the most important things that we do. And I think there are really two parts to your question or two parts to the answer—one I learned really early in my career. I was on a deal at Morgan Stanley, the Gillette hostile takeover defense. It was written up in the book from Good to Great. And the reason it was written up is, the CEO said, “Do whatever you need to do to keep me independent, but you cannot touch my R&D budget, and I will not tell you what it is, but I’m better off dead than existing without that budget.” And it ended up, I learned years later it was the Sensor razor. And I think the message I got as that young associate was, “If you don’t invest for long-term growth, you are starting to sow the seeds of your decline.” And so, you are totally right, there are risks associated with it, but there’s a bigger risk not doing it. And so, really important to invest for long-term growth. Now, that needs to be calibrated, you got to have the engine, but by the time you need that growth to kick in, I have seen too many companies across too many industries where they think about it too late, and then they’ve sort of run out of runway. So then, how do you analyze it, to your question? It’s hard to do. I mean, it starts with, again, data. What are the assumptions that you need to look at? And oftentimes, and I learned this really working at Morgan Stanley and thinking through, “How do you determine what to take public in many instances, the articulation of what is the model, how can it evolve, how does it defy what is already out there in the conventional world,” gives you a sense of what’s the art of the possible but also what’s the aspiration and ambition of the CO. Do you have the right team that’s going to drive to get to the top of the mountain? And so the analytics are hard. It has to be a problem that’s worthy of taking on. We often start with, it’s got to be, have the opportunity to really benefit people around the globe in a meaningful way. It has to be big enough to matter. And then you look at, “How is it transforming? Is it truly a different approach, a different experience?” And so, it’s, yeah, and you have to, and then finally, I’m sorry, set metrics along the way so that you can kind of mark yourself, metrics and milestones along the way.
– Thank you for sharing. It’s really fascinating to sort of hear about that data-driven approach that you just described. All of us MBA students in the room today. We are super excited about the future. We’re very hopeful, but at the same time, we are living in very uncertain and anxious times with the emergence of gen AI and the impact it can have on the workforce. Very tense economic conditions and worsening climate change. And the list just goes on, with that. When you think about the future, Ruth, what keeps you up at night? What helps you keep going and what are you most excited about?
– There’s a lot to be excited about, and I think you’re absolutely right. There’s so much to be concerned about. I do think technology throughout history has been a catalyst to solve problems. It’s been a catalyst for economic growth. When we talk about AI, we want to make sure that we’re bold and responsible. We’ve talked about the fact that, when you have a technology, that “is this extraordinary and transformative?”, and then Sundar, our CEO years ago in Davos said, “It’s like fire. It can sterilize water, it can heat your home, it can burn it down. It needs to be properly governed.” So, I think, when I’m very excited, when I look at what AI can do, if I go back to cancer as an example, when I got to Google, shortly thereafter, our amazing team had a breakthrough in early-stage detection of metastatic breast cancer. I had breast cancer. And so, I call my oncologist at Sloan Kettering and said, “Is this as important as it seems, or is this just kind of Silicon Valley believing itself?” And he said, “You cannot, we cannot transform health care, we cannot democratize health care.” That was his language. “We cannot democratize health care without AI.” And to me, that’s extraordinary, because I had amazing care because I was at an extraordinary institution. But not everybody lives near Berkeley or near Sloan Kettering or you name it. Not everyone lives in these areas. And so the upside, whether it’s in health care, and many cancer docs will believe that we will solve many aspects of cancer in our lifetime. That’s amazing, right? Whether it’s with education, whether it’s applying it to climate change, there’s a lot to be excited about. But we do need all of us focused on, “How do we use this productively in the right way?” Climate change is so self-evident that the pace at which the evidence is in front of us that we need to make sure that we’re individually, collectively applying ourselves. And at Google, what we look at is, “What can we do through products and services that will help more than a billion people on the planet make decisions in their daily life?” And, “What can we do at, across Alphabet to transform tech with technology that can transform solutions?” And, “How can we run our data centers 24/7 on carbon-free energy? What do we need to do?” So, we each, I’m concerned and excited, and I think that’s the right way to think about it because what the solutions are here if we apply ourselves with gusto, and we need to collectively own these issues.
– Thank you, I think we definitely needed that inspiration.
– Last question for today. You were in our shoes once at Wharton a few years ago. What is your-
– A few years ago, that’s so generous. A few decades ago.
– Just a few years ago, we have a room full of MBA students here who are very excited to embark back into their professional lives. What would your advice be, and if there’s one thing that you could do differently when you were in business school, what would that be?
– So I feel like you keep asking a question. I give a two-part answer, apologies. But I graduated from Wharton, I’ll date myself because it’s relevant to the story. I graduated in 1987, I started at Morgan Stanley in August of 1987. And for the historians in the room, October of 1987 was the single worst percentage decline in the history of the stock market. And that record has not been broken. So I started my career six weeks before I thought the world—the finance world—was falling apart. It didn’t, if you now go and actually Google it and look at do a chart, right? August 1987, to the present, it’s a tiny blip. It is irrelevant. In the moment, it felt like everything I’d worked so hard for maybe was gone. And what I ended up doing was I thought I would only be in M&A, and I was never going to do anything other than mergers. But new things came out of banking after that. And so, first of all, no matter what the world throws you, I do think these things open up new doors and keep it in context. It feels much worse in the moment. Number two, be open to new ideas. If you love what you’re doing, stay with it. You don’t need to move around. But if you get to a point where I did a number of times in my career where I felt like I was plateauing, I went back to the, “What’s my highest and best use?” And I was open to change. And just make sure you’re working with great people, ’cause they will coach and train you. They will get you up the curve much faster. I ended up hiring somebody when I got to Google who was close to retiring as controller of Intel. He had a bit more time left. But I said, “Come over to Google because we have amazing young rising superstars, but I want someone with your pattern recognition.” And that’s what he did. He got all of the team up the curve really quickly ’cause he brought so much wisdom from his many years of experience. So, lean on those people. If you’re working with great people, they’re going to love to coach and see you rise up, and you’re going to have fun.
– Well thank you, Ruth. It’s been an absolute honor chatting with you today, and I speak, obviously, on behalf of all of us when I say we’re so grateful for the opportunity to learn from you. With that, I think we’re ready to move on to audience Q&A.
– Cool, thank you. Thank you both for the questions.
– I’m Don Moore. I am the associate dean for Academic Affairs here at Haas. Thank you, Ruth.
– Thank you.
– For this wonderful, insightful discussion.
– Is your mic on?
– Your mic’s not on
– It’s not on? Oh, nope. OK, thanks. So let’s see, I have a few questions from the audience. Given the fact that Google’s on the forefront of the AI revolution, can you take us into the future and share with us what your or Google’s vision is for that future and help the aspiring young professionals in the audience place themselves in that future? How should their careers take account of where things are headed?
– So AI, what’s interesting about it is it’s so, so much a part of every conversation that we’re having, but the reality is, of course, we’ve all been using AI for quite some time. Anytime you take, you do a photo search, or anytime you’re traveling and you want to translate to another language, across the board, contact centers are currently using AI to provide operating leverage to the teams they have there directing questions queries most efficiently. So, it is here. That being said, your question is a great question because the inflection is extraordinary, and I think you’re going to see it in every industry and it’s going to, so wherever you are going, whatever you’re going to do, make sure that you’re fluent and fast and, “How can I use AI to either get closer to customers or think about operating efficiencies in my business? Where should I get operating leverage? How can I use it as a risk tool?” Those are sort of the business answers. When I think about the implications for the world, I’ve hit on a lot of it. And to me, that is what’s exciting, the implication for health. So as an example, our leading AI group, Google DeepMind. So at DeepMind, they open source to the world, something called AlphaFold, where it’s basically giving to the world protein structure as a base for researchers, scientists globally to work on drug discovery, climate change solutions. And what I’ve heard doctors say, researchers say is, “This is the most important foundation for drug discovery.” And to me, these types of things are what get me really excited. So, it’ll be in every part of your life. And I think those of you say, “I want to go into governance around it,” that’s a great part as well. Making sure that it is safe, that bias is addressed. Oftentimes, I’m asked, “Well what’s the role if you’re not a computer scientist?” Plenty. Because much of what we do in the real world today has bias embedded in it. You don’t want to just replicate that. So we like to bring in social scientists, humanists to make sure that what you’re looking at, we’re thinking about how to improve upon this. And then the last point I’d make is, I personally really like the concept that it’s not artificial intelligence—it’s augmented. And for each one of us, it should augment what we do. It’s a tool for us to use, but judgment and bringing teams together, creativity, it is going to be a foundation, just like I’m old enough to remember my first calculator, my first PC. These are all operating leverage, and we should use it that way.
– A follow-up question. Google is at the forefront of organizations racing toward the transformative introduction of general AI, and there are some intelligent observers who worry about the risks that unleashing AGI on the world could pose competitors racing toward that frontier may all want to get ahead of their rivals and may all wish that the government imposes some safety regulations on all the competitors. What sorts of regulations would Google like to see imposed?
– It’s a really important question. The White House actually has done a very good job here bringing industry in. And I think the group of us who’ve come together, and they just issued their executive order on AI, but the principles around governance for AI have been very important to do red teaming, to test what you’re doing, to provide transparency, to look at watermarking, all of these issues where you look at it as a collaborative body trying to ensure that we prevent misuse, abuse, and the downside risk. And I think one of the other things that’s been very important that the White House has also done is, what we don’t need is a U.S. solution and a Europe solution, and fill in the blank. So trying, for example, the G7 came out with some added principles, and everyone’s trying to constructively come together to delineate, “What are the rules of the road that will make a difference?” And we’re pleased to see that that is the way people have approached it
– A couple of times already. Today the issue of climate change has come up. How are you thinking about the current climate crisis from the will means perspective? What’s Google’s role, especially from an investment perspective in helping create a better, more sustainable future?
– Well, I’m very proud that from the earliest days the founder, our founders Larry and Sergey had been focused on climate change. And so, we were the first to be carbon neutral than we’d said in 2012. We wanted to match 100% of our energy consumption with renewables, figuring that if you put basically a bid out in the market, you would catalyze more supply. That, at the time, the team thought it would take about a decade to get there but hit that goal by 2017. And so, a number of years ago, we said, “What we now want to do is work on actually not just matching but never emitting. So let’s run all of our data centers, all of our office campuses on carbon-free energy 24/7.” It is not easy to do, but we’re making a lot of progress on it because, again, collectively, we need to set clear aspirational goals. The data are self-evident, they’re going in the wrong direction. And so, that part of that’s about “how do you use AI.” For example, one of the things that we found is we can make our data centers more efficient. We think we’ve had the most efficient data centers on the planet, and yet, with cooling, you can make them more efficient with an application of AI to measurement and looking at where you cite them so that you can actually use alternate source of energy. If anyone wants to come down to Sunnyvale and see our campus there, we’re really proud of the way we’re building, we’re using in our Sunnyvale facility, geothermal energy, you can see our solar panels on the buildings. And so, building it into everything you do is one, the second I’ve already mentioned, “How do we make sure that our products address what people around the globe are asking for, which is how can we each have an impact?” So eco-friendly routing is the one example, and if you search on flights, “What’s the carbon footprint from flights?”, that should motivate every CEO of a company that is the bottom of the list to move higher up on the list. And so again, it’s another form of saying transparency, and then we have some exciting breakthroughs in our… across what we’re doing in research that are still early,
– Such important contributions. So, the issue of the global climate crisis and wise shared guardrails on the development of AGI both necessitate international cooperation. Shefali is a full-time student in our MBA program and a former U.S. diplomat. She asks, “Could you please share more about your engagement with international relations and how this connects with your career in finance and tech?”
– Great question. So, I look, I firmly am of the view that there’s an interplay between public policy and the types of investments that one makes, would want to make. For example, if you’re citing a data center somewhere, you want to make sure that we can actually protect users’ data. That we don’t actually lose it because there’s an expectation. And so, there is unequivocally a linkage between getting the right policy in place and then people do want to invest, invest responsibly. And I think bringing that lens to all of the discussions is key. I saw that unequivocally during the financial crisis, you, and each one of you working, where you work will have technical insight, and the question is, “What actually is in the art of the possible that can land that doesn’t have unintended consequences?” And what’s very important is, you come at it trying to solve the problem for the country, trying to actually step outside and into the role of the person you’re working with. It is extremely transparent when you’re not doing that, and as somebody who sat on the other side of the table, you want to make sure you’re engaging with people who are constructively trying to solve the issues at hand for the broader society and bringing their technical expertise. So I think that interplay between finance, investment, public policy, is a wonderful nexus that enables us to have stronger public policy.
– Have you been able to apply your studies in international relations to your work?
– Well, it’s funny, because my thesis a million years ago was about nuclear energy and nonproliferation of nuclear weapons. And, at the time, I was very clearly saying this is a concern. Fast-forward many decades, not many years, but many decades. And I actually think to the climate change question, there’s a real opportunity, in particular, given we have smaller scale of nuclear energy opportunities to look at what’s the interplay there. And are there ways that we should be rethinking some of the things that I learned many, many years ago. But absolutely, the lessons of history are lessons we keep learning over and over again. And whether it’s how do you solve, how do you bring together the public-private sector to convene in a way that develops and delivers very responsible governance around AI. There are plenty of history lessons there, or whether we think about where else we can execute. I think every discipline that any one of you has gone through, you will find a nugget in there that’s relevant.
– Nebo Iwenofu is a student in our evening weekend MBA program and asks, “You have to have broad knowledge and deep understanding to be successful at your level. How would you coach a leader in your organization to be both broad and deep in their area of responsibility?”
– I think you develop that over time. Don’t expect too much upfront from yourself. Do what you’re doing—do it really, really well. I think there was one point in my career at Morgan Stanley where I actually stepped back as we were getting to the year-end process, and I realized I was working for too many people, I was supporting too many people. I was in equity capital markets, I think, at the time. And so, I had a whole host of business partners, and I think focus yields results, and so, go deep, have a great boss or series of bosses who will coach and groom you. Then, you get expertise that you can then continue to build upon, and you have plenty of time ahead so you don’t need to rush it. I think it’s very easy to be super impatient and not have that context, and you’ll be surprised how over the years it just sort of is like a patchwork quilt that builds on itself.
– If you could go back in time to deliver a message to your 27-year-old self, what would you tell yourself?
– Probably, “It’s going to be OK.” I don’t actually look on things where I’ve messed up. It’s like mistakes. I view them as learning experience, and so, I don’t actually record them that way because they are learning experiences, and I think just keeping things in perspective and appreciating the kaleidoscope that life does evolve over time. There were plenty of times, actually, I finally have a good answer as I was rambling on and on too. Inarticulately, the most valuable is that you’ll be able to get there and learn and grow and just grab the moments when you see them and enjoy it as you go. Don’t feel guilty, maybe, I don’t know what it was in my life, but I have felt guilt all the time. So I’m very articulate about saying, “Don’t feel guilty.” Work-life mix, not work-life balance. It came from feeling guilty, right? That I wasn’t doing enough, and only when I deconstructed why and got to the kaleidoscope and got to the fact that I have amazing kids and incredible partner in life, did I realize be there in the moment and be wherever else you need to be in that moment. And it’s OK. Guilt doesn’t actually do anything productive in life.
– Thank you. We should wrap it up there. Let me thank our question-askers, Madhu and Paola, and thank Ruth for the wisdom that you shared with us today. Thanks to all of you for coming.
– Rather than ending on the word guilt, I’m just going to say, “Have fun.” You’ve got so much ahead of you. So it’s a pleasure being with all of you, and thank you.
After a series of high-profile research findings failed to hold up to scrutiny, a replication crisis rocked the social-behavioral sciences and triggered a movement to make research methods more rigorous. A six-year effort to test these emerging methods, led by labs at UC Santa Barbara, UC Berkeley, Stanford, and the University of Virginia, has shown they can produce new and highly replicable findings. The paper, published in the journal Nature Human Behavior and co-authored by Berkeley Haas Professor Leif Nelson, is the strongest evidence to date that the methodological reform movement known as open science can lead to more reliable research results.
Image: Robert Kneschke for Adobe Stock
Roughly two decades ago, a community-wide reckoning emerged concerning the credibility of published literature in the social-behavioral sciences, especially psychology. Several large-scale studies attempted to reproduce previously published findings to no avail or to a much lesser magnitude, sending the credibility of the findings—and future studies in social-behavioral sciences—into question.
To confront this crisis, a handful of top experts in the field set out to test whether emerging research practices can produce more reliable results. Over six years, researchers at labs from UC Santa Barbara, UC Berkeley, Stanford University, and the University of Virginia discovered and replicated 16 novel findings with ostensibly gold-standard best practices, including pre-registration, large sample sizes, and replication fidelity.
Their findings, published in the journal Nature Human Behaviour, suggest that with high rigor, high replicability is achievable.
“The major finding is that when you follow current best practices in conducting and replicating online social-behavioral studies, you can accomplish high and generally stable replication rates,”said UC Santa Barbara Distinguished Professor Jonathan Schooler, director of UCSB’s META Lab and the Center for Mindfulness and Human Potential, and senior author of the paper.
Their study’s replication findings were 97% the size of the original findings on average. By comparison, prior replication projects observed replication findings that were roughly 50%.
The paper’s principal investigators were John Protzko of UCSB’s META Lab and Central Connecticut State University, Jon Krosnick of Stanford’s Political Psychology Research Group, Leif Nelson at the Haas School of Business, UC Berkeley, and Brian Nosek, who is affiliated with the University of Virginia and is the Executive Director of the Center for Open Science.
“There have been a lot of concerns over the past few years about the replicability of many sciences, but psychology was among the first fields to start systematically investigating the issue,” said lead author Protzko, who is a research associate to Schooler’s lab, where he was a postdoctoral scholar during the study. He is now an assistant professor of psychological science at Central Connecticut State University.
The question, Protzko said, was whether past replication failures and declining effect sizes are inherently built into the scientific domains that have observed them. “For example, some have speculated that it is an inherent aspect of the scientific enterprise that newly discovered findings can become less replicable or smaller over time,” he said.
The researchers decided to perform new studies using emerging best practices in open science—and then to replicate them with an innovative design in which they committed to replicating the initial studies regardless of outcome.
“It is important to test the replicability of all outcomes,” said Nelson, the Ewald T. Grether Professor in Business Administration & Marketing at the Haas School of Business, UC Berkeley. Scientists and scientific journals will always prioritize emphasizing newly confirmed hypotheses, but consumers of science care just as much about the hypotheses that were not confirmed. We should care about the replicability of both outcomes.”
Replicating 16 new discoveries
Over the course of six years, research teams at each lab developed studies which were then replicated by all of the other labs. In total, the coalition discovered 16 new phenomena and replicated each of them four times involving 120,000 participants.
Across the board, the project revealed extremely high replicability rates of their social-behavioral findings, and no statistically significant evidence of decline over repeated replications. Given the sample sizes and effect sizes, the observed replicability rate of 86%, based on statistical significance, could not have been any higher, the researchers pointed out.
They also ran several follow-up surveys to test the novelty of their discoveries. “It would not be particularly interesting to discover that it is easy to replicate completely obvious findings,” Schooler said. “But our studies were comparable in their surprise factor to studies that have been difficult to replicate in the past. Untrained judges who were given summaries of the two conditions in each of our studies and a comparable set of two-condition studies from a prior replication effort found it similarly difficult to predict the direction of our findings relative to the earlier ones.”
Indeed, many of the newly discovered findings have already been independently published in high-quality journals.
Because each research lab developed its own studies, they came from a variety of social, behavioral, and psychological fields such as marketing, political psychology, prejudice, and decision making. They all involved human subjects and adhered to certain constraints, such as not using deception. “We really built into the process that the individual labs would act independently,” Protzko said. “They would go about their sort of normal topics they were interested in and how they would run their studies.”
Collectively, their meta-scientific investigation provides evidence that low replicability and declining effects are not inevitable, and that rigor-enhancing practices can lead to very high replication rates. Even so, identifying which practices work best will take further study. This study’s “kitchen sink” approach—using multiple rigor-enhancing practices at once—didn’t isolate any individual practice’s effect.
The additional investigators on the study are Jordan Axt (Department of Psychology, McGill University, Montreal, Canada); Matt Berent (Matt Berent Consulting); Nicholas Buttrick (Department of Psychology, University of Wisconsin-Madison), Matthew DeBell (Institute for Research in Social Sciences, Stanford University), Charles R. Ebersole (Department of Psychology, University of Virginia), Sebastian Lundmark (The SOM Institute, University of Gothenburg, Sweden); Bo MacInnis (Department of Communication, Stanford University), Michael O’Donnell, (McDonough School of Business, Georgetown University); Hannah Perfecto (Olin School of Business, Washington University in St. Louis); James E. Pustejovsky (Educational Psychology Department, University of Wisconsin-Madison); Scott S. Roeder (Darla Moore School of Business, University of South Carolina); and Jan Walleczek (Phenoscience Laboratories, Berlin, Germany).
This Veterans Day, we asked some of the many veterans in our community to share their stories.
Phil Ickes didn’t come from a military family. But a desire to explore the world—and make it a safer place–drew him to join the U.S. Army.
Phil Ickes, MBA 24
Ickes, MBA 24, began his military career as an undergraduate in the ROTC program at the University of Pittsburgh. Between his junior and senior years, he studied Arabic in Jordan and volunteered at Syrian refugee camps, which he describes as a turning point.
“One weekend, I met a family that had been severely wounded by a car bomb while they were still living in Syria,” said Ickes, who grew up outside Pittsburgh. “Meeting that family made me feel compelled to do something about it.”
After graduating, Ickes joined the U.S Army, training in the Naval School Explosive Ordnance Disposal (EOD), a school jointly run by the Army, Navy, Air Force, and Marine Corps. Working as s a platoon leader, his team supported the U.S. Secret Service, protecting several presidents, vice presidents, and foreign dignitaries.
As an EOD operations manager, he later directed an operations cell that supported more than 600 soldiers in full-spectrum bomb disposal.
In 2021, Ickes traveled to Syria and Iraq as an EOD company commander. “That experience definitely left me feeling like I left the world better than I found it,” Ickes says. “The act of disarming bombs and rendering explosive devices safe and leaving communities overseas safer than I found them was definitely very rewarding.”
Phil Ickes helped to detonate bombs around the world while serving in the U.S. Army.
Working with robotics and machine learning in the military piqued his interest in tech, and drew him to apply to Haas, where he’s working toward a career in technical product management.
Last summer, he interned at San Mateo-based drone startup Skydio. He said he believes drones have the potential to benefit fields including law enforcement, infrastructure inspections, mapping, and commercial delivery.
“I like products that make people or businesses’ lives easier or more efficient,” he said. “Usually these products are at the intersection of software and hardware.”
On making the transition from military life to an MBA program, Ickes said he immediately found a collaborative spirit and welcoming environment at Haas.
“Everyone is ambitious yet laid back,” he says. “Nobody takes themselves too seriously.”
“Join the Navy, see the world”
Just after turning 30, while working as an accountant in Santa Barbara, Emily Hawkins decided she wanted something more in life.
“It was a great job, but it kind of felt like I was lacking purpose, and it was at that time in your life where your friends are settling down and having families,” said Hawkins, MBA 24.
Emily Hawkins went from boot camp to an aircraft carrier and a seven-month deployment off the coast of Japan in 2010 and 2011.
She’d always been interested in the military and, after some research and inspired by the slogan “join the Navy, see the world,” she decided to enlist.
“My plan was to enlist for one term, which is four years, learn some new skills, have an adventure, be part of something bigger than what I had been doing, and then return to what I thought of as my normal life,” Hawkins said.
Adventure is what she got. Hawkins went straight from boot camp to an aircraft carrier and a seven-month deployment off the coast of Japan in 2010 and 2011.
Hawkins and her team were called in to help with the Fukushima nuclear accident in 2011. “I had a chance to participate in the humanitarian operation, and it was amazing, and it kind of broadened my perspective of what a career in the military could be, and I was hooked,” Hawkins says. “And that was about 14 years ago.”
Hawkins is still serving in the Navy while earning her MBA, but her role has shifted from working on an aircraft carrier to serving as an officer in supply, logistics, and financial management.
While she was accepted to three MBA programs, she chose Haas due to the support of the school’s Veterans Club. “They were by far the most engaged in terms of helping you with your resume, reviewing your essays, talking to you pre- and post-interview,” Hawkins says. “They were so engaged and so supportive that I knew there would be a good community for me.”
Veterans Day, for Hawkins, is a time to reflect. “It’s a time to think about how we as a society view military veterans and the programs we provide for them in terms of education, transition programs, and medical care.”
With approximately 44 million Americans having reported daily feelings of loneliness, U.S. Surgeon General Dr. Vivek Murthy earlier this year declared that we are facing a “loneliness epidemic.”
Juliana Schroeder, the Harold Furst Chair in Management Philosophy and Values Professor and Barbara and Gerson Bakar Faculty Fellow at Berkeley Haas, explored this crisis in a recent TEDxMarin talk, sharing strategies to fight loneliness and live a more connected life. Schroeder is a behavioral scientist who researches the psychological processes behind how people interact and make social inferences about others.
In fact, Schroeder herself once felt plagued by loneliness. She shared that while riding public transit early in her career, she used to feel particularly disconnected from those around her. Technology is only exacerbating our loneliness, she added.
“Avoidance is easier for us than ever,” she said in her talk. “Online avoidance feels convenient, but it carries an inconvenient consequence.”
“Avoidance is easier for us than ever.”
This “inconvenient consequence” extends beyond the emotional impacts of loneliness. In fact, Schroeder noted a meta-analytic review in the journal PLOS Medicine that found sustained loneliness is potentially as harmful to human health as smoking 15 cigarettes a day.
When people refuse to interact with others and instead retreat into their tech devices, Schroeder explained, the cycle is only perpetuated.
“The paradox of loneliness is that people who are lonely don’t want others to think there is something wrong with them,” she explained. “So they further isolate themselves, creating a cycle of loneliness.”
“The paradox of loneliness is that people who are lonely don’t want others to think there is something wrong with them. So they further isolate themselves, creating a cycle of loneliness.”
Strangers on a train
Schroeder, who also holds affiliations with the Social Psychology Department, Cognition Department, and Center for Human-Compatible AI at UC Berkeley, has explored this paradox in her own research, looking at not only the causes behind the loneliness epidemic but also at potential solutions. When completing her doctorate in social psychology at the University of Chicago, for instance, she ran an experiment inspired by her own experiences on the train.
She found that people expected that talking with a stranger on the train would result in the least positive commute experience—but, in reality, it did the exact opposite. Those who engaged with others on the train reported having the most positive commute experience, leading her to beg the question: Why do people choose to avoid each other if they’d be happier connecting?
One of the main reasons, she finds, is that people tend to overestimate the social risk that comes with connecting with others. Citing the rule of social reciprocity, however, Schroeder noted that nearly all participants received a response when engaging with another person on their commute.
Fostering deeper connections
Curing loneliness is about more than just making small talk—it also requires establishing deeper connections with colleagues, friends, and more. In another study published in the journal Psychological Science, Schroeder found that the medium through which communication occurs is crucial to its quality. That is, voice-based communication like in-person and phone conversations—as opposed to text-based communication like texting, emailing, or DMing on social media—changes how words are received and understood, influences word choice, and affects the synchronicity of exchanges.
In fact, research suggests voice conversations enhance brain wave and heart rate synchrony—the neurological and cardiovascular evidence of psychological alignment.
“Combating loneliness means making the deliberate choice to connect when all you want to do is avoid,” Schroeder concluded. “These choices might feel small, but in aggregate, they have the power to change us from feeling lonely to feeling connected.”
The 2023 Finance Fellows: Back row (left to right): Erik Swisher, Renzo Viale Paiva, Gauri Deshpande , Marya Unwala, Martin Lima; front row (left to right) Rogerio Rios, Venky Vuppalapati, Yvonne Mondragón, Isabella Fantini, Hector Alamillo, Daniel Espinoza Birman. Photo: Jim Block
When Yvonne Mondragón finished the Berkeley Haas undergraduate program in 2016, she worked for seven years in finance, planning a long-term career in investment banking.
“I knew I wanted to come back to school in order to pivot into investment banking and work in banking at the highest level,” she said.
Mondragón, MBA 25, is now well on her way, as one of 11 first-year full-time Haas MBA students named among Haas’ 2023 Finance Fellows.
As fellows, the students receive a scholarship award and are assigned mentors—Haas alumni working in finance, including recent graduates and senior executives.
The 2023 fellows include:
Mondragón, for the C&J White Fellowship in Finance.
Isabella Fantini, Renzo Viale Paiva, Marya Unwala, and Martin Lima for entrepreneurial finance.
Venky Vuppalapati, Gauri Deshpande, Hector Alamillo, and Erik Swisher for investment banking.
Daniel Espinoza Birman and Rogério Rios for private equity and investment management.
About 45% of these new fellows are international, reflecting the percentage of the overall MBA class, said William Rindfuss, managing director for Strategic Programs with the Haas Finance Group. Several of the students bring work experience in different finance sectors from their home countries, and are looking to pivot to larger sectors in the U.S.
Vuppalapati, who is from India, said he’s drawn to the excitement of technology investment banking, and closely tracks how world events, the day’s news, and government policy impact financial markets.
“When I think of investment banking, I also think about how much any one deal can impact different people and different industries,” he said. “Tech has the largest impact, so it feels like a great fit.”
Rios, originally from Brazil, said he’s fascinated by innovation in health care, which led him to pursue a MBA/MPH degree.
“Innovation and technology are going to shape the future, and I want to be in a place that would not only give me an opportunity to be close to financial markets but also provide a solid understanding of how business and tech intersect with health care.”
Inspired by the four Berkeley Haas Defining Leadership Principles—Question the Status Quo; Confidence Without Attitude; Students Always; and Beyond Yourself—Rios added that he is seeking to make an impact on the world and give back to his family.
“I’m a first-generation student, so a lot of my efforts are in the spirit of giving back to them and to my community,” he said.
Mondragón, who is also a first-generation college student, said she hopes to serve as a role model.
“Having someone who looks like me in the finance space is so important,” she said. “I have the lived experience of someone who did not benefit from this space. I grew up not having much access to any of the knowledge that I have now.”
Fantini said she is coupling passions for both technology and venture capital at Haas—and adding a lifelong interest in the food supply chain.
“Haas has such an amazing focus on sustainability and food,” Fantini said. “I knew I could stay connected to Silicon Valley, stay connected to venture, and get even more connected to food resources by coming here for an MBA.”
Choosing a Medicare plan is both complicated and consequential. Berkeley Haas research has fueled a new company that simplifies the process, promising to save money and improve health for millions of people.
Photo courtesy of Healthpilot
It’s Medicare open enrollment season, and the tens of millions of retirees who rely on the government program for health care are grappling with an abundance of options, a dearth of information, and no good way to personalize or compare plans.
“It is not a well-functioning market,” says Jon Kolstad, an associate professor at UC Berkeley’s Haas School of Business who studies the economics of health care. “And yet the choices people make have high financial stakes—consumers are typically on fixed incomes—and critical health implications.”
Kolstad has been studying this challenge since he was in graduate school and, with several academic collaborators, recently helped turn a broad foundation of research into a company centered on helping people make better decisions when choosing a Medicare plan. Healthpilot, which launched in late 2020, uses machine learning to compare Medicare plans and suggest options that are personalized to each person’s current circumstances, projected health needs, and risk tolerance. It’s also free to use.
“We recognized the power of this highly predictive algorithm developed to solve a critical unmet healthcare need for seniors who are evaluating Medicare plans,” says Healthpilot CEO Seth Teich. “We believe that Healthpilot’s platform is a transformative technology that empowers consumers to easily navigate through the complexity of plan choices to find, and enroll in, their best coverage option.”
A desperate need for innovation
People with questions about Medicare enrollment have long relied on phone calls to private agents who walk them through the decision. But there’s a problem: “In reality, these brokers, who are supposed to be experts, do no better at selecting a plan than the average person,” Kolstad says.
In a 2021 paper, Kolstad and several colleagues, including UC Berkeley economist Ben Handel, demonstrated that brokers are prone to the same flawed judgment as everyone else. For instance, they place too much weight on a plan’s premium while overlooking other costs, such as out-of-pocket expenses. The result is that consumers working with brokers pay $1,260 more per year on average than they would if they enrolled in the best plan.
This is not the result of brokers’ bad intentions but simply because solving which plan is best for which person “is a very complex computational problem,” Kolstad says. In fact, the 2021 paper found that when brokers were provided with an AI assistant to help them suggest a plan, they saved consumers about $300 per year. (This is a conservative estimate.)
Healthpilot’s promise lies with its ability to use AI to properly weight the many fixed and projected costs of every available plan, sifting carefully—and impartially—through these multidimensional relationships. The algorithm operates by comparing every Medicare enrollee with millions of similar people and then forecasting the likelihood of different medical complications. By pairing this forecast with known information—including, with users’ permission, secure access to the medications people take and the doctors they see, along with information they provide directly—Healthpilot then determines which plan is ideal and ranks the alternatives.
The algorithm also considers individual appetites for risk. “Some people have very little risk aversion, and they would rather have low payments now and gamble on how they fare,” Kolstad says. “The plan that gets recommended to this kind of person should be different than the plan that gets recommended to someone who is very risk averse, who wants a high premium now in order to know that they’ll be covered.”
Benefiting individuals and the marketplace at large
The financial benefits for individuals are straightforward: Choosing the right Medicare plan generally means better coverage and less expense. These savings also accrue to the federal government, which finances Medicare.
A subtler benefit are gains in well-being and even lower mortality rates. One working paper co-authored by Kolstad found that people who have to pay more out of pocket cut back on important health care services. A related paper, co-authored by Ziad Obermeyer of Berkeley Public Health with researchers at Stanford and Harvard, found that a $100 bump in per-month cost-sharing for drugs—exactly the kind of mistake people make without good guidance—increases mortality by 13.4%, as people forego essential drugs such as blood pressure medication.
Healthpilot is able to deliver these financial and health-related benefits to consumers for free because of the structure of the Medicare market. Since Medicare is a valuable source of revenue for insurance companies, the companies pay commissions to brokers for each person that they enroll. If Healthpilot sends someone to Humana, Humana pays; if instead the enrollee goes to Blue Cross-Blue Shield, then Blue Cross-Blue Shield pays.
That’s a crucial point: Because these commission amounts may vary by carrier, human agents may be biased in their plan recommendation based on the commission they are paid. Healthpilot’s algorithm does not factor commissions into its recommendations and does not steer people toward any particular plan or company based on financial incentives. “There’s no distortion in the platform or plan recommendation, which is unique in the industry,” Kolstad says.
This also has the potential to inspire greater innovation and efficiency in the insurance market as a whole—one of Kolstad’s main interests. As a point of comparison, consider the tech market: When a company like Apple creates a product that people like, they buy it; when it creates a product people don’t like, they don’t buy it. This is quickly reflected in the company’s revenue and share price.
Because insurance products are so much more complicated, consumer decisions rarely reflect clear notions about quality; people often enroll, and stay enrolled, in plans that don’t deliver value. Healthpilot, by sorting people into plans that genuinely benefit them, could bring much greater transparency into the marketplace and produce meaningful information for companies to build better plans, Kolstad says.
“For better or worse, we rely on competing private plans in Medicare. That’s the approach we’ve taken because we believe that a private market will offer innovation,” Kolstad says. “Giving customers a greater ability to match with plans that give them the coverage they want and need will reward innovators. That means Healthpilot isn’t just a digital enrollment solution for consumers but can be a tool to make the whole market function more as it should.”
Berkeley — A team of researchers who developed tools for investors, academics, and businesses to measure economic risks from the loss of the planet’s biodiversity has won the inaugural Berkeley Haas Sustainable Business Research Prize.
It should have been a red flag that FTX’s organizational chart was created behind Sam Bankman-Fried’s back by his personal psychiatrist. Or that Bankman-Fried didn’t even want an org chart in the first place. 
Ruth Porat, president, CFO, and chief investment officer at Alphabet and Google, ranks among the most influential women in finance, having earned spots on both Forbes’ and Fortune’s 
