Laila Tarraf, MBA 97
Chief People Officer, Allbirds

Head and shoulders shot of Laila Tarraf, MBA 97, smiling.

Human resources expert Laila Tarraf knows how to cultivate talent. She was a founding member of Walmart.com, adding 250 employees in one year, and handled HR for Peet’s Coffee and Tea as it redefined its values as a national brand. But it wasn’t until she embraced her own vulnerability that she truly understood how to lead.

Tarraf’s leadership journey, however, was not an easy one. Her husband then her parents died in quick succession, sparking the self-discovery that led her to find compassion and authenticity, experiences she recounts in her recently published memoir, Strong Like Water (She Writes Press, 2021).

“I was afraid I would be judged with this book,” says Tarraf. “But actually, it’s breaking down walls and bringing me closer to others.”

Currently, as the chief people officer for Allbirds, a sustainable footwear and apparel company that seeks to impact climate change and make a profit, Tarraf prioritizes genuine connection to develop company culture.

She led Allbirds through the pandemic and social unrest by establishing working agreements, essentially guiding principles for how employees connect with each other, like choosing courage over comfort in conversations and practicing gratitude daily. “If you commit to having the hard conversations with an open mind and an open heart, that’s really what builds greater connection and ultimately creates a stronger culture,” Tarraf says.

Her approach is working. Allbirds was named America’s best startup employer of 2020 by Forbes. “A strong culture acts as the glue in an organization,” she says. “It can propel, unite, and connect you.”

linkedin.com/in/lailatarraf

Rodrigo Hetz, MBA 06

Chilean HR expert

Rodrigo Hetz, MBA 06

Rodrigo Hetz, 46, an executive in international business, strategy, and human resources, died unexpectedly in January. Colleagues and friends say Hetz had a passion for connecting with people and empowering them.

“He had a sensibility for understanding how human beings work, how we behave and react, and how we can be motivated,” says Christian Urazan, MBA 06 (read more in his alumni note).

At time of his death, Hetz was the corporate people manager for CMPC, a Chilean pulp and paper company. He is survived by his wife, Claudia, and children, Emilia and Diego.

To catch the most COVID-19 cases, testing policies should vary based on demand, study finds

Cars line up for COVID-19 testing outside Hard Rock Stadium in Miami Gardens, Fla., on Tuesday, Jan. 5, 2021. (AP Photo/Wilfredo Lee)

With months to go in the mass rollout of COVID-19 vaccines, testing is still critical to control the surging pandemic. Yet with testing capacity still limited in some areas, health authorities have struggled with how to catch the most cases: Test on a first-come, first-served basis, or prioritize testing for those with symptoms? Provide free testing for all?

In a recent working paper, Berkeley Haas Asst. Prof. Luyi Yang found that free testing for all—with no prioritization—can backfire when demand gets too high. Along with co-authors Shiliang Cui and Zhongbin Wang, Yang developed a model to project how testing facilities should schedule and price COVID testing to reduce infection rates.

“Long lines may discourage people from getting tested promptly, which of course can be dangerous from a public health standpoint,” Yang says. “My co-authors and I figured there had to be a way to make testing lines more efficient.”

Long lines may discourage people from getting tested promptly, which of course can be dangerous from a public health standpoint.

Testing centers in some cities, like San Francisco or Washington DC, have chosen to give people equal priority regardless of whether they have any symptoms. Other agencies, like the French government, have given priority to symptomatic people.

Yang and his co-authors’ model predicted that free testing without prioritizing those more at risk does not identify the most cases if testing demand is high. That’s because when testing facilities become overly congested, free testing results in too many asymptomatic people getting tested at the expense of symptomatic people, who are most likely to carry the virus. They concluded that when demand is higher than capacity, charging a fee increases the likelihood of testing more symptomatic people, because asymptomatic people’s decisions are more sensitive to price.

Conversely, they found that if a priority testing policy is used, testing should be free. When people with symptoms are given priority, the decisions of asymptomatic people are no longer a factor in their decision whether to get tested—even if lines are long, they’ll get to move to the front. As a result, charging a fee will only discourage both symptomatic and asymptomatic people from getting tested. This policy is exactly what the French government does: Testing is free for all, even those with no symptoms, but symptomatic or high-risk people are given priority.

Policies to detect the most cases

This analysis raised the question of which approach testing facilities should take. Yang said that the most important move facilities should make is to be flexible with their scheduling policy.

When testing demand is low and there’s no wait time, the researchers’ model predicts that either policy will be effective. As testing demand surges, priority testing for symptomatic people catches more cases.

However, when there is a moderate level of demand, the researchers’ findings suggest that it does not make sense to give priority to symptomatic people. High-risk people are still likely to get tested, but the hassle of waiting might push low-risk people away, reducing the chance of identifying asymptomatic carriers. In those situations, the best policy is in fact to prioritize people without symptoms.

“All else equal, people without symptoms are less motivated to seek a test, so if there is enough capacity, we would like to create an incentive for more of them to get tested,” Yang says.

All else equal, people without symptoms are less motivated to seek a test, so if there is enough capacity, we would like to create an incentive for more of them to get tested.

Though there are certainly other factors that determine the spread of the disease, Yang believes there are actionable items that testing facilities can take depending on the demand for testing.

“The high-level takeaway is that the optimal testing policy depends on the level of testing demand relative to testing capacity, so it should vary by region and evolve over time. That is, one should caution against a one-size-fits-all approach,” Yang says.

Investing in AI boosts firm growth—and increases market dominance, study finds

Amazon headquarters
A September 2019 photo shows employees at Amazon.com Inc.’s headquarters in Seattle. Amazon topped the researchers’ list of firms with the most AI jobs. (Credit: Kyodo via AP Images)

Large companies with their greater resources have a natural advantage when it comes to investing in artificial intelligence. Those investments, in turn, help those large companies to grow even larger—creating a virtuous circle that leads to even greater market dominance.

In short, AI has helped “superstar” firms such as Amazon, JPMorgan Chase, and UnitedHealth, get even bigger, according to a new paper co-authored by Berkeley Haas Assistant Professor Anastassia Fedyk.

“AI investments have been concentrated in large firms that were already productive, enabling those firms to grow even larger and capture even more market share,” Fedyk said. “By facilitating the rise of the ‘superstar’ firms, the new technology is leading to increases in industry concentration.”

Along with co-authors Tania Babina, an assistant professor at Columbia Business School; Alex He, an assistant professor at the University of Maryland; and James Hodson, the CEO of the AI for Good Foundation, Fedyk found that firms that invested more in AI technology increased their sales and employment, leading to higher levels of industry concentration.

“We wanted to look at whether this recent technological change adopted by firms led to something concrete,” Fedyk said. “Is it the case that modern technology is improving firm productivity and stimulating growth?”

The answer to that was mixed, they found.

Analyzing AI job postings and resumes

AI technologies, such as machine learning or natural language processing, rely on computer science to simplify tasks involving decision-making or forecasting. Because AI relies on big datasets, it’s possible that larger firms have an advantage because they have more data and can more efficiently tailor products to different consumers. Moreover, this streamlined technology may simplify production, resulting in higher firm productivity.

Quantifying how AI affects the economy has been difficult because there is little data on individual firms’ AI usage. Fedyk and her coauthors overcame this challenge by using online job postings and employee resume data to look at how many of the firms’ job postings or workers had AI-related skills and create an index of companies’ use of AI.

The researchers then looked at the types of companies that use AI technology. They found higher investments in AI by “superstar” firms—those with larger market shares, higher cash reserves, and higher R&D intensity. The ten firms with the most AI jobs were Amazon.com Inc., International Business Machines Corp. (IBM), Microsoft Corp., Apple Inc., Facebook Inc., Intel Corp, Alphabet Inc., Capital One Financial Corp., multinational consulting firm BearingPoint Inc., and General Electric Co. However, the rise in AI investments from 2010 to the present has been ubiquitous across all industry sectors, with roughly a sixfold increase in the share of AI workers across the board.

List of the 20 companies with most AI jobs

Growth for the largest firms

In terms of economic growth, the researchers found that companies investing more in AI technology had higher growth rates from 2010 to 2018. A one-standard-deviation increase in the share of AI workers was associated with a 16% growth in sales, and, interestingly, a 15% increase in employment. The researchers note that this last finding assuages some of the conventional concern that AI technology might destroy more jobs than it creates.

Unlike the adoption of robots, which other studies have found increases employment at the firm level but decreases employment at the industry level, Fedyk found that firm-level growth from AI investments did translate into industry-level growth in sales and employment. In other words, firms benefitting from AI did not, in general, do so at the expense of other companies within their industry.

The researchers concluded that the findings were driven by firms that were already larger and more productive before the adoption of AI. For instance, the largest third of companies increased sales by 17%, while the smallest third of companies saw no increase at all. Moreover, the large firms that adopted AI simultaneously expanded into new geographic and product markets. The researchers interpret these results as evidence that AI has helped the most productive firms scale more efficiently.

Fedyk points out that while this growth has led to greater market concentration towards the largest firms, that’s not necessarily a bad thing, as more market share is being allocated to more productive firms.

At the same time, there was no evidence that AI-adopting firms became more productive as a result of the technology. However, the researchers cautioned that productivity gains may take some time to materialize. “It’s still early on as AI hasn’t been around for that long,” Fedyk said. “It’s possible that it will take longer to see improvements in efficiency.”

Expert Panel: How can we safely reopen the economy?

Returning society to some version of normal will require customized plans that may vary by locale, depending on the intensity of COVID-19 infections. Even so, the economy can’t be safely reopened without strong data, unified decision-making frameworks, and some policies that span the country.

That was the consensus of experts from the Haas School of Business and the School of Public Health who took part in a virtual discussion on reopening the economy Friday as part of the Berkeley Conversations COVID-19 series.

“One size does need to fit all for at least large swaths of the population,” said Assoc Prof. Jonathan Kolstad, a health economist with joint appointments at Berkeley Haas and the Department of Economics. “Everyone’s behavior affects everyone else. (Reopening) in the absence of any sort of coordination is an incredibly costly strategy.”

One size does need to fit all for at least large swaths of the population. —Assoc. Prof. Jonathan Kolstad

According to Maya Petersen, associate professor and co-chair of the Graduate Group in Biostatistics at the School of Public Health, fragmentation hurts the ability of any small population anywhere to respond effectively to their epidemics.

“Ideally what happens is you have a unified decision-making framework, you have unified communication, you have clear policies that span the country,’ Petersen said. “And within those, you have the ability to use your data locally to meaningfully fine-tune your epidemic response.”

If there was one steady drumbeat throughout Friday’s conversation it was data, data, data—which panelists agreed are a prerequisite for reopening, and which must be used to guide testing and identify outbreaks. Other key themes were putting proper systems into place, as well as restoring trust.

To do that, leaders need to be realistic, consistent, and deliberate, said Jennifer Chatman, professor of management and Associate Dean of Learning Strategies at Berkeley Haas. “The mental calculus of leadership is even more vital now because you need to anticipate how people are going to react to what you say and what you do,” Chatman said.

The mental calculus of leadership is even more vital now because you need to anticipate how people are going to react to what you say and what you do.” —Prof. Jennifer Chatman

“Leaders should be realistic with their people—the future is going to be complicated, and it’s going to be challenging. At the same time, they also need to be reassuring, so people can continue to have some semblance of calm and be productive. Leaders need to ask people to comply with rules, but at the same time they need to call on people to use their ingenuity to address problems that we haven’t confronted before,” she said. “If there is any time that a deliberate leader was needed, now is the time.”

Prof. David Levine, a labor economist at Berkeley Haas, said the positive news is that all the tools of good management apply.

“For generations, we’ve been figuring out how to improve product quality, how to make food safer, or how to avoid environmental disasters. And the answer is good management,” he said. “There are lots of management tools around training, incentives, monitoring, and continuous improvement that we know how to use for lots of old threats. Coronavirus is a new threat, but the tools to fight it are the same tools.”

“There are lots of management tools around training, incentives, monitoring, and continuous improvement that we know how to use for lots of old threats. Coronavirus is a new threat but the tools to fight it are the same tools.” —Prof. David Levine

One key thing organizations must do is make it easy for employees to be safe. For example, it’s not enough to just tell people to wash hands: Managers must give people breaks to wash their hands. All states should require every workplace to complete an assessment to look for risks, as California does. Employees should have the authority to stop production if they see a health problem—right now, in most states, they don’t.
“Managers need to make clear that this is how you become a hero, and not a former employee,” Levine said.

However, if one large company has the wherewithal to implement safe solutions for their employees, but those employees live with people working at other firms that don’t, “it verges on futile for that large firm to do all those testing and safety strategies,” Kolstad commented. “At every point, coordination is critical from a health, economic and messaging perspective. If you’re a big employer across a lot of states, keeping your workforce healthy and safe is good for reopening, and good for your employees.”

A woman wearing a protective mask walks past a closed children's clothing store in Chicago, Wednesday, April 15, 2020. (AP Photo/Charles Rex Arbogast)
A woman wearing a protective mask walks past a closed children’s clothing store in Chicago, Wednesday, April 15, 2020. (AP Photo/Charles Rex Arbogast)

People need to remember, however, that our goal as a society is not to get to zero transmissions: Unless we have a vaccine, the goal is to minimize the spread of the virus, Petersen said. The way to do that is to continue using public health techniques such as social distancing and hygiene, while employing integrated data streams to guide testing, identify outbreaks as early as possible, and quickly isolate any new cases.

“We all navigate risks in our lives every day. Thinking in terms of good public health principles, what you need to do is communicate risks clearly to people, have the data available to be able to quantify risks accurately, and you need to have people’s trust so when you say this is the best estimate of your current risk and this is what you need to do to mitigate it, people believe it,” she said.

We all navigate risks in our lives every day. Thinking in terms of good public health principles, what you need to do is communicate risks clearly to people, have the data available to be able to quantify risks accurately, and you need to have people’s trust so when you say this is the best estimate of your current risk and this is what you need to do to mitigate it, people believe it. —Assoc. Prof. Maya Petersen

That’s why organizations must tread carefully, Chatman said. “Crises like this one are opportunities for organizations to display their commitment. Employees are watching closely, and they’re going to remember what you did. If you are known as the employer who, when the going got tough, you got going, there will be long-term cultural consequences.”

This May 1 panel was sponsored by the Haas School of Business as part of Berkeley Conversations: COVID-19. This series of live, online events feature faculty experts from across the UC Berkeley campus who are sharing what they know, and what they are learning, about the pandemic. Panelists were Prof. Jennifer Chatman, Prof. David Levine, and Assoc. Prof. Jonathan Kolstad  from Berkeley Haas and Assoc. Prof. Maya Petersen from the School of Public Health. The moderator was Assistant Vice Chancellor for Public Affairs Dan Mogulof.

 

 

 

Free “Leading Through Crisis” video series features top Berkeley Haas experts

Leading Through Crisis banner

BERKELEY, Calif.—Berkeley Executive Education has released a free weekly video series featuring top faculty offering insights on leading through crisis.

The short videos feature Berkeley Haas faculty responding to the uncertainty and volatility created by the coronavirus pandemic with expertise across a wide range of fields—from psychology, sociology, and organizational behavior to economics and neuroscience.

Produced while sheltering-in-place, the “Leading Through Crisis” series brings the unique Berkeley and Bay Area perspective on culture, leadership, and innovation to our current challenges.

Videos will be released weekly throughout the spring:

  • Leading Culture Through Crisis with Jennifer A. Chatman, the Paul J. Cortese Distinguished Professor of Management at Berkeley Haas and co-founder and director of the Berkeley Haas Culture Initiative. Chatman is a leading researcher in the area of organizational culture and leadership.
  • Leading in a Time of Crisis with Homa Bahrami, a professional faculty member and international educator, advisor, and author. Bahrami specializes in organizational flexibility, team alignment, and dynamic leadership in global, knowledge-based industries.
  • Organizational Adaptation in a Time of Crisis with Sameer Srivastava, the Harold Furst Chair in Management Philosophy and Values. Srivastava’s research unpacks the complex interrelationships that people forge within and across groups. His work uses computational methods to examine how culture, cognition, and networks relate to career outcomes.
  • The Neuroscience of Work-From-Home Productivity with Sahar Yousef, a professional faculty member who specializes in applying and leveraging cutting-edge neuroscience research to improve productivity, innovation, and wellness.
  • Becoming a Changemaker in a Time of Uncertainty with Alex Budak, a professional faculty member and social entrepreneur who created the highly rated “Becoming a Changemaker” course.
  • Keeping your Head in a Crisis with Don Moore, the Lorraine Tyson Mitchell Chair in Leadership and Communication at Berkeley Haas. Moore’s research focuses on overconfidence—including the consequences of people thinking they are better than they actually are or being too sure they know the truth. Moore is the author of Perfectly Confident: How to Calibrate Your Decisions Wisely.
  • How Do I Show up as a Leader? with Maura O’Neill, a professional faculty member and distinguished teaching fellow. O’Neill was appointed by President Obama to be the first Chief Innovation Officer of the U.S. Agency for International Development, where she had responsibility for inspiring and leading breakthrough innovations in foreign assistance and development worldwide. O’Neill is best known for adapting venture capital and drug discovery methods to development by co-creating the Development Innovation Venture Fund.
  • The Economics of a Cultural Shift with Steve Tadelis, the Sarin Chair in Strategy and Leadership and professor in the Haas Business and Public Policy Group. His current research areas are e-commerce, industrial organization, procurement contracting, and market design.

Additional programs are in production with professors Toby Stuart, Catherine Wolfram, Rich Lyons, Cameron Anderson, Zsolt Katona and Tom Lee; professional faculty members Robert Strand, Susan Houlihan and Bill Pearce; and other renowned faculty members across a range of topics.

Sign up here to receive “Leading Through Crisis” videos weekly.

About Berkeley Haas

As the second-oldest business school in the United States, Berkeley Haas has been questioning the status quo since its founding in 1898. It is one of the world’s leading producers of new ideas and knowledge in all areas of business, inspiring new thinking for the new economy. Two of its exceptional faculty have been honored with the Nobel Prize in Economic Sciences. Two of its female faculty, Laura D’Andrea Tyson and Janet Yellen, chaired the President’s Council of Economic Advisers. Janet Yellen also recently stepped down as the chair of the Board of Governors of the Federal Reserve.

Berkeley Haas offers outstanding management education to about 2,500 undergraduate and graduate students who come from around the world to study in one of its six degree-granting programs and to join the school’s network of 41,000 alumni worldwide. Its distinctive culture is defined by four Defining Leadership Principles: Question the Status Quo, Confidence Without Attitude, Students Always and Beyond Yourself.

About Berkeley Executive Education

UC Berkeley Executive Education serves leaders and organizations who aspire to redefine the future of business.  Our immersive learning experiences, led by renowned UC Berkeley faculty, equip global executives and their organizations with the vision, culture, and capabilities to thrive in an ever-changing world. Leveraging the best resources of the world’s No. 1 public university (Forbes) and the surrounding Silicon Valley business ecosystem, Berkeley Executive Education embraces the Haas School of Business mission to develop leaders who Question the Status Quo, exhibit Confidence Without Attitude, are Students Always, and think Beyond Themselves.

Berkeley Executive Education delivers over 150 programs annually, to a global audience, including Open Enrollment programs in leadership, strategy, finance and entrepreneurship; Comprehensive programs (15 days or longer) in leadership, digital transformation and other emerging topics; Custom programs designed and tailored specifically for a specific company, government or university partner’s objectives and organizational culture; and Online programs, in various languages, which offer a flexible schedule with direct application of practical learning exercises. Read more on the Berkeley Executive Education website.

Contact:
Laura Counts | Berkeley Haas Media Relations
lcounts@haas.berkeley.edu | (510) 643-9977

In the developing world, rent-to-own business models offer opportunity, study finds

A boy studies by a solar lamp
Credit: Shylendrahoode for Getty Images

More than a billion people worldwide lack access to electricity, and even a $15 solar lamp is beyond the financial reach for many of them. Yet businesses have found a way to reach this very-low-income market through rent-to-own programs that combine incremental payments with technology to monitor and lock out non-paying customers.

A new paper by Asst. Prof. Jose Guajardo is the first to analyze how usage and payment behavior interact in rent-to-own business models and what works when serving customers in the developing world who have no savings and no credit history. The paper was recently published in Production and Operations Management.

“For low-income people in many parts of the world, it’s almost impossible to acquire products like solar lamps or cookstoves up front,” says Guajardo, who has studied service business models for a range of goods, from aircraft to solar power systems to cars. “This innovation reduces that barrier, giving people the option to make small payments over time, and using technology to enforce good payment behavior.”

What Guajardo found is that higher use is associated with higher rates of payment, payment flexibility can backfire and reduce engagement, and that business analytics models based on early information are helpful in predicting good customers.

Rent-to-own models have long been popular in Western economies to help people buy furniture and consumer electronics, and they’re gaining widespread traction in the developing world.

For low-income people in many parts of the world, it’s almost impossible to acquire products like solar lamps or cookstoves up front. This innovation reduces that barrier.

In a project that received partial funding from the Fisher Center for Business Analytics, Guajardo partnered with a company that sells off-grid energy products in countries such as Kenya, Tanzania, Uganda, and India.

Customers—who are mostly farmers—bought a $15 solar lamp, paying about 20% to 26% up front and making subsequent payments to a local agent over five to 10 weeks. Use of the lanterns is monitored and can be controlled remotely, with customers receiving text messages when a payment is due. When a payment is missed, the lantern can be locked, but customers who resume payments regain access without paying interest charges.

The paper includes three main findings:

  1. People who used the lanterns more heavily were more likely to make their payments on time—that is, an “engagement effect.” Drops in usage were associated with late payments.
  2. Customers who bundled their payments, paying for more than one week up front, ended up using the lanterns less. This counterintuitive “bundling effect” indicates that increased payment flexibility does not necessarily improve overall usage. This was perhaps because customers didn’t interact as much with agents after acquiring and had less chance to get questions answered, underscoring the value of up-front training.
  3. Usage data is valuable to predict payment behavior. Guajardo built predictive models of payment default, and found that usage rates during the initial period can help predict whether a customer will pay. This shows that usage tracking is a valuable tool for companies seeking to reduce the risk of having to repossess one of their products.

The results provide valuable insights for both companies and non-governmental organizations, Guajardo says. “In this case it was an inexpensive solar lamp, but rent-to-own models are also being used for higher-value items such as solar home systems or cookstoves,” he says. “Usage patterns can provide a way to identify the good payers and the less good payers, and identify who is a good candidate for upselling.”

Buy or lease? In going solar, third-party deals offer advantages

Jose Guajardo_commercial solar

When it comes to going solar, is it better to buy or lease? For businesses looking to get on the right side of climate change, choosing a provider that offers solar-as-a-service may be more efficient than buying a system outright, according to new research from the Haas School of Business.

Asst. Prof. Jose Guajardo, who has studied the operational implications of service business models in multiple industries, looked at the performance of nonresidential solar systems installed in California between January 2008 and April 2013. Analyzing data collected by the California Solar Initiative rebate program, he found third-party-owned systems enjoyed a clear performance advantage, generating a 4 percent better production yield than installations owned directly by the businesses.

“In California’s solar energy sector, this research establishes a connection between service business models and operational performance,” says Guajardo, who published his results in the Fall 2018 issue of the journal Manufacturing & Service Operations Management.

For businesses, this is no small matter: The scale of solar projects can be enormous. For example, in 2015, Apple Computer announced it was investing $850 million to help build a central California solar farm, using some of the energy generated by the project to power its Cupertino, Cal. headquarters.

Some firms, such as Ikea, are opting for direct ownership; others, such as Staples, have opted to lease. Yet while firms approach the decision based on a range of criteria, including how much they want to invest upfront, there has been little empirical evidence to help them choose between these competing business models.

Part of what makes solar so attractive is that it comes with subsidies to encourage its use: The federal government offers tax breaks, and many states offer additional incentives. California, for example, has offered performance-based subsidies to solar producers in the nonresidential sector.  In addition, power purchase agreements—in which the user pays a set rate per unit of energy generated—are commonly used by third-party ownership companies. That means the third-party owner has a double profit motive for boosting energy yield.

Better system design

Guajardo analyzed two strategies that third-party operators can pursue to improve performance: better solar panels or better system design, which means orienting equipment to make the best possible use of sunlight. He found evidence that system design, and not superior panel technology, may account for the third-party advantage. In fact, third-party owners tended to use lower-rated panels, but their better design decisions led to better performance overall.

Guajardo believes there’s a knowledge and skills gap between dedicated solar providers and businesses that run their own systems. “By installing many systems, third-party operators can benefit from learning by doing and economies of scale,” he says.

These results, Guajardo cautions, are particular to non-residential systems that received performance-based incentives in California, and may not apply in places without subsidy programs rewarding performance. He stresses, however, that service business models have been widely used not only in solar energy, but also in several other cleantech markets. Moreover, incentives for adoption of this type of technology have been common in the United States and several other countries.

When it comes to the  adoption of solar energy, Guajardo advises businesses to carefully consider how the incentives behind each ownership model can make a difference from an operational perspective.

 

 

 

 

 

 

 

 

 

 

 

 

 

Why the sharing economy can be good news for manufacturers

The sharing economy can benefit manufacturers

The rise of Uber and Lyft has taxi companies running scared, while AirBnb is encroaching on hoteliers. Should the firms that make cars, bikes, and even lawnmowers also fear a sales drop as peer-to-peer rental apps make it easy to borrow wheels on demand?

Not necessarily, says Jose Guajardo, a Berkeley-Haas assistant professor in the Operations and Information Technology Management Group. In a recent working paper, he suggests emerging peer-to-peer rental markets represent more opportunity than menace for manufacturers.  That’s because the existence of these markets might tip the scales for ambivalent buyers who know they can recoup some money from a big purchase—and also because these markets open new opportunities for companies savvy enough to exploit them.

“There is a large variety of cases in which the peer-to-peer rentals can be good news for traditional firms,” Guajardo stressed in an interview about the paper, written with Vibhanshu Abhishek and Zhe Zhang of Carnegie Mellon University.

Renting out your ride

The peer-to-peer market is a notable feature of the sharing economy, whose rise represents one of the most innovative business trends of our time. Peer-to-peer rental companies like Turo for cars and SpinLister for bikes allow regular people to rent out their rides—similar to what Airbnb has done for apartment owners. These services are also creating a world in which consumers are not only customers, but potential competitors.

Guajardo and his co-authors built a model to analyze this rental market’s effects on manufacturers. They found that whether these companies are hurt or helped depends critically on how often people use the products.

Take car sharing, for example. Guajardo’s model showed that in a scenario where nearly all drivers use their cars with about the same frequency, manufacturers are better off without peer-to-peer rentals, which might cut in to sales. In a scenario where some car owners do a lot of driving and others just a little, a company’s best option would be to simply sell to frequent drivers and rent to occasional motorists.

It is when there is a moderate disparity in driving habits within a marketplace that manufacturers can benefit from peer-to-peer rentals. The explanation is simple: If I’m considering buying a car, even though I don’t plan to use it every day, the presence of an active car-sharing market may convince me to make the purchase. I know I can make back some of the price by renting it out on days I’m not driving. In this way, the peer-to-peer market gets some middle-range users to buy and enables infrequent drivers to rent, boosting overall consumption.

Sharing economy benefits

Guajardo and his co-authors say they believe their paper is the first to highlight variation in usage as a key factor determining peer-to-peer market effects. He says he hopes the research demonstrates the benefits available to manufacturers, which can exploit this new market by adjusting their business models and investing in or starting their own peer-to-peer operations.

It’s a lesson not lost on some of the nation’s largest corporations, especially in the auto industry. Ford has invested in bike sharing—recently rolling out a fleet of Ford GoBikes in the Bay Area. And Tesla CEO Elon Musk has declared that his company will let Tesla owners tap a button on their phones to rent out their vehicles, generating income that could make the pricy electric cars more affordable.

Meanwhile, peer-to-peer markets can save consumers money whether they’re owners or renters. “It can be a win-win situation for both manufacturers and consumers,” Guajardo says.

Frequently Discounting Maximizes Retailer Revenues

JC Penney implemented a “best price” strategy in 2012, assuming consumers prefer fair, everyday prices as opposed to sale prices that are discounted from original, inflated prices.

It was wrong.

Longtime customers—loyal fans of sales and coupons—rejected the new pricing policy, and JC Penney reinstated its old pricing model that included frequent discounts.

In contrast, retailers like Zara, which sells women’s and men’s clothing, relies on a low rate of discounting and low stock replenishment or high product turnover. If customers don’t buy a new product right away, it may disappear before they commit to buy.

But there is a third pricing strategy that incorporates the benefits of both approaches and allows the retailer to better match supply with demand. The “discount-frequently” pricing strategy allows retailers to charge high prices when demand is high and is flexible unlike an “every day low price” strategy or “static pricing.”

“A firm that cares about attracting customers to the store as well as maintaining the flexibility to match supply with demand would benefit from the discounting frequently policy,” says Pnina Feldman, assistant professor, Haas Operations and Technology Management Group.

In the paper, “Price Commitments with Strategic Consumers: Why it can be Optimal to Discount More Frequently … Than Optimal” (Manufacturing and Service Operations Management, July 2015), Feldman and co-author Gérard P. Cachon, The Wharton School, University of Pennsylvania, found the discount-frequently strategy proved to be the most optimal.

The findings are based on game theoretic models that compared expected revenue and profits within different pricing strategies. All of the models assumed that customers incur a purchase “cost”—time and effort—to physically shop at a store and will only go shopping when they think it will be worth their while.

Typically a retailer may increase prices when demand is high, or lower prices when demand is low. This is called “dynamic pricing.”

When a retailer discounts prices frequently—even in cases where they would rather charge a high price—Feldman says customers are more likely to visit the store because they value the discounts. At the same time, by not committing to an “every day low price,” it can still raise prices if demand turns out to be very high, and their customers will not abandon them. In this scenario, customers understand that demand may be high so they may not get a big discount; but given the store’s history, they believe they are not being taken advantage of so it’s worth it to continue to shop that store more.

The researchers also contend that customers are equally as strategic as merchants. The discount-frequently strategy is good, says Feldman, if the merchant wants to get more customers to visit the store. Customers may also delay their shopping in anticipation of future discounts. If the latter behavior is more important to the retailer, discounting frequently may not the optimal strategy.

“Committing to discount frequently maximizes revenues by balancing the trade off between dynamic and static pricing,” says Feldman.

“The discount-frequently strategy is about making commitments without sacrificing flexibility. Retailers think of dynamic pricing as charging the best prices to match supply and demand, “ says Feldman. “But by implementing a dynamic pricing strategy that makes no price commitments, retailers do not take into account today’s smart and savvy customers who will visit the store less frequently if they can’t depend on good prices and product availability.”

Study finds that a “discount-frequently” pricing strategy allows retailers to charge high prices when demand is high and is also flexible unlike an “every day low price” strategy or “static pricing” to better match supply with demand. The result: increase revenue and customer loyalty.

Leadership for a New Era

Haas alumni shine amid our changing world

This year, the world changed almost instantly. A deadly pandemic, vigorous racial justice movement, and widespread economic devastation have turned the world upside down, leaving in their wake suffering and turmoil for many.

These crises have put businesses front and center as leaders grapple with the unprecedented challenges, new prospects, and questions that we, as a society, now face. “Companies are adjusting their operations and core business models in ways and at a pace no one could have expected,” says Jonathan Kolstad, a Haas associate professor of economic policy and analysis who holds the Egon & Joan Von Kaschnitz Distinguished Professorship. “It’s requiring massive innovation and, frankly, a massive rethinking of what business leadership is.”

Many Berkeley Haas alumni are driving the path forward into the unknown. Here, we tell the stories of five of them—of pivots they made out of necessity or a desire to help, of their confidence and humility, and of lessons learned. Most of all, they have shown determination to go beyond themselves, reminding us once again of the power of our Defining Leadership Principles in good times and bad.

On the right side of the opportunity line

Chris Becherer

For Chris Becherer, MBA 06, everything shifted when he saw his customer’s Facebook post. A Finnish software executive wrote about waking up feeling fine. But his sleep-tracker—a finger ring developed by Becherer’s employer, Oura Health—told him otherwise. His heart and respiratory rates were up as was his temperature. Because he’d recently traveled near a COVID-19 hotspot, he got tested. The results were positive.

“The world changed for us when we saw that post,” recalls Becherer. The customer’s story wasn’t the first time that he had heard anecdotally that the $300 Oura Ring—dubbed “Silicon Valley’s favorite sleep tracker” by Business Insider— picked up signs of illness before telltale symptoms appeared. Unlike most wearables, including Fitbit and Apple Watch, the Oura Ring measures body temperature. As the gravity of COVID-19 set in, Becherer and his colleagues realized they were in a unique position to help.

Alongside the University of California, San Francisco and West Virginia University’s Rockefeller Neuroscience Institute, Oura donated rings to thousands of healthcare workers as part of new research studies, contributing to a growing body of research on how wearables can help with illness detection, symptom profiles, and recovery. This research even caught the eye of the NBA, which gave its players the option of wearing Oura Rings for the season restart this summer. Oura ring

Oura’s early success in the COVID-19 era is an example of how adaptable and resilient companies can be in times of crisis, says Haas Professor Steven Tadelis, the Sarin Chair in Leadership and Strategy. “Businesses that are data savvy are the ones that are going to recover faster and expand in smarter ways,” he says.

For Becherer, Oura’s pivot raises important questions. “We need to make sure we are helping and pivoting in the right way without being opportunistic,” he says. “That’s a delicate balance for any business that’s doing well right now. We asked ourselves if we were going too far and the answer was no, we are on the right side of the opportunity line here.”

Now, Becherer and his colleagues are grappling with another question: Just how much should they pivot in response? Oura has built its reputation as a sleep and wellness company, not a health care provider. “The knee-jerk reaction would be to arc the business roadmap to the new world,” he says. “We are focused on a longer time horizon. Even though the world looks drastically different right now, it could look drastically different again.”

From strategic thinking to operations 101

Laura TeclemariamHand sanitizer appeared throughout the office of video game developer Glu Mobile, where Laura Teclemariam, EMBA 18, worked. Over Slack and in casual conversations, employees were questioning what COVID-19 might mean for them and the company. Some were Clearly nervous, while others seemed apathetic.

This wasn’t the time for work to slow down. Glu was three weeks away from releasing two new games—one of which, Disney Sorcerer’s Arena, Teclemariam led as director of product management—and she needed to make sure workers were collaborating and thinking creatively about future iterations.

With signs mounting that employees might soon be working from home, Teclemariam started a spreadsheet. She worked with her co-team leads noting who needed laptops, Wi-Fi routers, or other teleworking tools. She analyzed employees’ productivity risks, either work-related or personal due to family demands. Finally, she assessed whether they were in the “fear,” “learning,” or “growth” zone of emotional responses to the unfolding crisis.

When the company order came down to work from home, Teclemariam shifted into hyperdrive. “I went from thinking strategically about game design and ideation to operations 101,” she says. “I was very aware of the potential challenges we faced around communication and collaboration.” She faced her own hurdles on that front: with three young children, her days began at 4 a.m. and ended at 10 p.m. as she and her husband juggled work and family needs.

Teclemariam’s foresight was spot on. “We are in a monitoring and risk-management world,” says Prof. Kolstad. As workforces become more remote, employers will have to assess the psychological state of their teams in ways they never had to before. In physical workplaces, daily health-risk assessments could become the new normal.

“As a mother and as a leader, I will unapologetically support anyone who needs the flexibility of working from home.”

Teclemariam also had to ensure that employees could work efficiently and collaboratively. The release of the new games not only went off without a hitch, they also achieved higher-than-expected engagement levels as homebound consumers sought entertainment.

Success, however, brought new concerns. The prospect that users might disengage meant updating the games at a faster rate than expected and also adding new features that prioritized user engagement over revenues. Since they could no longer brainstorm in front of a whiteboard, Teclemariam had workers devise more fully baked ideas in smaller groups. They began working together in virtual rooms for an hour or two a day. She instituted deadlines for minor tasks.

Teclemariam says the challenges of juggling work and personal demands has changed her as a leader. “Concerns about working from home have been demystified,” says Teclemariam, who left Glu Mobile in May to become a director of product management in Warner Bros. Entertainment’s gaming division. “As a mother and as a leader, I will unapologetically support anyone who needs the flexibility of working from home.”

Girl in safety goggles doing a science experiment in front of a laptop computer. Photo by Kathleen Schwartz Photography
Photo by Kathleen Schwartz Photography

Prioritizing future goals today

Tom StahlAs the pandemic began overtaking the country, Tom Stahl, MBA 93, knew that schools might close. Outschool, the online education company where he serves as head of operations, began preparing for increased enrollments and started hosting free webinars to prospective teachers. Almost overnight, teacher attendance at the webinars surged from one to about 500.

Formed in 2015, Outschool provides a marketplace for teachers to offer live courses to kids and teens. Anyone who passes a criminal background check can sign up to teach a class of their choosing at their own price. The platform had about 65,000 enrolled students, many of them homeschooled, on the pandemic’s eve.

Outschool also offered and, ultimately, donated $1 million worth of free classes to anyone whose school had shuttered. Within hours of the giveaway’s launch on March 13, when schools announced widespread closures, Outschool’s traffic spiked and the website briefly crashed. By month’s end, an additional 20,000 students had enrolled.

To handle the influx, Outschool upended its org chart to redeploy employees. “Within 48 to 72 hours, virtually every business metric—sales, bookings, sign-ups, student engagement, website visits—grew by a factor of 10,” he says. “We had to throw our annual plan out the window.” He also made sure employees received significant cash bonuses for their monumental effort.

By June, Outschool had hired 19 full-time employees over Zoom and brought in some 80 contractors. Some 154,000 students were active on the platform.

Sean Foote, a longtime Haas lecturer, says online education’s coming-of-age moment epitomizes how crises accelerate disruption. “Sharp shocks like COVID-19 are just force multipliers for trends that were already happening,” he says. Foote is the founder of Transform Capital and teaches venture capital and private equity.

For Outschool, surging demand meant long-term goals rose to the top of the to-do list. Efforts to recruit thousands of new teachers from across the English-speaking world ramped up. The company began working with school districts to offer its platform as a supplement to their educational offerings. It also recruited more than 80 organizations to provide summer camps online.

“We are proving that there are unique advantages to bringing together students and teachers from all over the world in a live setting,” Stahl says.

The unlimited  ROI of going  Beyond Yourself

Wolfgang WörnerNearly 6,000 miles and nine time zones away, Wolfgang Wörner, MBA 14, had to navigate a literal traffic jam as CEO & co-founder of Sixfold, an Austria-based provider of real-time and predictive supply chain software. A massive breakdown in Europe’s transportation network left trailers loaded with medical equipment, pasta, and toilet paper idling at borders for 24 hours or more, stuck in lines dozens of miles long. Many of Sixfold’s customers, which include Nestlé and Coca-Cola, were desperate for insights to get cargos moving.

Sixfold had the data they needed. But Europe had been borderless for almost a quarter of a century, which meant there had not been a need to identify widespread bottlenecks and alternate routes at this scale. As Wörner and his team raced through a Red Bull-fueled weekend to pull the data together into  a single, real-time virtual map, he made a critical decision that was both humanitarian and smart business: to make the tool available for anyone to use.

“We were just wanting to do our part to get supplies where they needed to be. For us, the silver lining has also been that we were at the right place at the right time.”

When the “COVID-19 map” was released in March, not even Wörner could have foreseen what happened next. Website traffic soared in one day to half a million visitors as suppliers, truckers, central and commercial bankers, the International Monetary Fund, and government agencies used the tool and media outlets like the Wall Street Journal wrote about it. Within two weeks, the European Commission was showcasing the map as part of its daily press briefing on its pandemic response, which included developing a mobile logistics app using Sixfold data. The European Commission president personally thanked Wörner for Sixfold’s contributions.

“We were just wanting to do our part to get supplies where they needed to be,” says Wörner. “For us, the silver lining has also been that we were at the right place at the right time.”

Olaf Groth, a Haas professional faculty member in international business strategy specializing in digital-disruption strategy, describes the pandemic as a “wake-up call” for logistics managers to rely less on human relationships and more on technology. “Supply chains tend to be incredibly fine-tuned and sophisticated,” says Groth, the CEO of Cambrian Futures, an advisory think tank. “But they are also very rigid and very fragile, and the pandemic has exposed those weaknesses.”

Wörner sees the potential payoff. But rejiggering supply chains is hugely expensive, and there’s too much economic uncertainty for companies to invest in better technology in the short run. “We really don’t know how this is going to play out,” says Wörner. “But we’ve proven, without question, the value of real-time data and insights.”

Map of Europe showing Sixfold’s real-time visibility of the entire supply chain.
Sixfold’s real-time visibility of the entire supply chain, which gives precise shipment ETAs to shippers, carriers, and end customers.

A new chapter in innovation

Sally AllainIn 2019, Johnson & Johnson Innovation–JLABS announced their next site in Washington, DC, along with a public-private partnership with the government agency overseeing U.S. global pandemic preparedness. Together, the Biomedical Advanced Research and Development Authority (BARDA) and JLABS would pursue early stage companies working on  medical countermeasures aimed at protecting our nation from chemical, biological, radiological, and nuclear threats, as well as from pandemic influenza and emerging infectious diseases.

Before the pandemic hit, Sally Allain, EMBA 16, a longtime Johnson & Johnson executive, had described as “unmet” the need for innovation in response to what was still a hypothetical threat. Today, Allain is entrenched in the race to innovate in health care. She’s working to fill gaps—in potential solutions for patients as well as the need for venture capital funding—in the nation’s preparedness for health-related catastrophes.

As the head of the new JLABS @ Washington, DC, incubator, Allain is tasked with recruiting up to 50 health care startups with promising innovations—not just in response to COVID-19 but also other underserved areas like pediatric medical devices and pharmaceuticals. Selected entrepreneurs will be mentored by Johnson & Johnson’s experts and supported with back-office services and the JLABS  Investor Hub (jlabs.jnjinnovation.com/investor-hub). The JLABS model, however, is “no strings attached.” Johnson & Johnson  does not take company equity and companies own their intellectual property. The more than 650 companies that are a part of the JLABS portfolio have independently raised over $33 billion; 31 are publicly traded, and 19 have been acquired.

The pandemic has added to Allain’s mission. She’s now working with her counterparts across 13 global JLABS sites to help portfolio companies take advantage of COVID-19-related funding opportunities through BARDA, the National Capital Consortium for Pediatric Device Innovation, and others. Among other effects, the outbreak has accelerated grant applications and data sharing among all health care players, public and private. 

Haas’s Kolstad says public-private collaborations are more critical than ever to the future of health care innovation. “I am optimistic that these kinds of partnerships will lead to good solutions,” he says.

Allain is confident that the collaborations underway could lead to faster and more effective responses to future health crises—and to potential breakthroughs and innovative strides in pediatric care. “With such a rapid pace, there is a window for us to fill long-standing gaps in health care,” Allain says.

Nobel Pride

The impact of a Nobel Prize a decade on

Oliver Williamson looks to someone off camera and smiles.Ten years after winning the Nobel Memorial Prize in Economic Sciences, Oliver Williamson’s groundbreaking work continues to resonate. Williamson, Haas prof. emeritus, earned the prize “for his analysis of economic governance, especially the boundaries of the firm.”

Simply put, those boundaries refer to when a firm decides whether to outsource a process, service, or manufacturing function or to perform it in-house.

Prof. David Teece says Williamson changed the way people think about business organization and industrial structure. “His impact was particularly strong with respect to the understanding of vertical integration: How and when to make outsourcing decisions and how to design robust contracts were central to his framework,” Teece says. “Today, as we consider issues relating to big tech, his work is the place to start thinking about the public policy issues at hand.”

To commemorate Williamson’s contributions to economics and to PhD students, an anonymous donor has agreed to match donations to the Oliver E. Williamson PhD Fellowship 4 to 1, up to $400K. Donors of $1K or more receive a limited-edition challenge coin.

Donate at: haas.org/olly-fellowship.

Haas team tops at Tech Challenge

Cori Land, Max Kubicki, Bryan Chiang, and Catherine Hsieh, all MBA 19s. Photos: Benny Johnson, MBA 20
(Left to right)  Cori Land, Max Kubicki, Bryan Chiang, and Catherine Hsieh, all MBA 19s. Photos: Benny Johnson, MBA 20.

A team of Berkeley MBA students bested groups from seven schools to win the annual Berkeley Haas Tech Challenge for their plan to educate city government officials on how new technologies can support initiatives that improve quality of life and efficiency.

The 2018 Berkeley Haas Tech Challenge, called “Big Data and the City of Tomorrow,” was held Nov. 8-10.

The winning Haas team included Bryan Chiang, Catherine Hsieh, Max Kubicki, and Cori Land, all MBA 19s. Haas took home the $5,000 first-place award for the second year in a row.

The challenge called on students to come up with a plan to entice city government officials to adopt Amazon Web Services (AWS) to create smart cities. Smart cities use data and communications technologies to increase efficiency, share information with the public, and improve the quality of government services and public safety. Example projects include monitoring and managing traffic signals remotely, using a software platform that tracks the real-time availability of spaces in parking lots, and implementing a lighting-management system that allows cities to monitor energy efficiency and maintenance needs.

The Haas team began the Tech Challenge case by asking: Who are the customers, what do they care about, and how can AWS meet them where they are?

“We tested each of our ideas against whether or not it ultimately solved a problem for people,” Land said. “If not, we rejected the idea, and it helped us focus our recommendations.”

The Haas team made recommendations for a website redesign that would provide easy-to-understand smart cities information to non-technical city planners, as well as new certification programs to educate government officials on how they could use AWS.Max Kubicki, Bryan Chiang, Cori Land, and Catherine Hsieh prepare their presentation. Photos: Benny Johnson

(Left to right)  Max Kubicki, Bryan Chiang, Cori Land, and Catherine Hsieh prepare their presentation. Photos: Benny Johnson.

The team also proposed a dashboard tool to help city officials compare their city services to others that have adopted smart cities technology—and measure the potential return-on-investment for their proposed projects.

Confidence without attitude may have been what set the Haas team apart from competitors. “One judge kept thanking us for admitting we still had some work to do when we better understood some gaps in our plan,” Hsieh said. Another Haas strength was leveraging broader perspectives by assembling a team with different areas of expertise, ranging from finance and energy to design thinking and change management.

Evan Cory and Charlie Cubeta, Tech Challenge co-chairs who organized the competition for the Haas Tech Club, said they received 108 team applications from 15 schools for the competition, a 25 percent increase over last year.

Competing teams included Yale, Kellogg, Columbia, Chicago Booth, MIT Sloan, UCLA, and Wharton. Eight Amazon executives served as coaches and judges.

Buy or lease? In going solar, third-party deals offer advantages

Jose Guajardo_commercial solar

When it comes to going solar, is it better to buy or lease? For businesses looking to get on the right side of climate change, choosing a provider that offers solar-as-a-service may be more efficient than buying a system outright, according to new research from the Haas School of Business.

Asst. Prof. Jose Guajardo, who has studied the operational implications of service business models in multiple industries, looked at the performance of nonresidential solar systems installed in California between January 2008 and April 2013. Analyzing data collected by the California Solar Initiative rebate program, he found third-party-owned systems enjoyed a clear performance advantage, generating a 4 percent better production yield than installations owned directly by the businesses.

“In California’s solar energy sector, this research establishes a connection between service business models and operational performance,” says Guajardo, who published his results in the Fall 2018 issue of the journal Manufacturing & Service Operations Management.

For businesses, this is no small matter: The scale of solar projects can be enormous. For example, in 2015, Apple Computer announced it was investing $850 million to help build a central California solar farm, using some of the energy generated by the project to power its Cupertino, Cal. headquarters.

Some firms, such as Ikea, are opting for direct ownership; others, such as Staples, have opted to lease. Yet while firms approach the decision based on a range of criteria, including how much they want to invest upfront, there has been little empirical evidence to help them choose between these competing business models.

Part of what makes solar so attractive is that it comes with subsidies to encourage its use: The federal government offers tax breaks, and many states offer additional incentives. California, for example, has offered performance-based subsidies to solar producers in the nonresidential sector.  In addition, power purchase agreements—in which the user pays a set rate per unit of energy generated—are commonly used by third-party ownership companies. That means the third-party owner has a double profit motive for boosting energy yield.

Better system design

Guajardo analyzed two strategies that third-party operators can pursue to improve performance: better solar panels or better system design, which means orienting equipment to make the best possible use of sunlight. He found evidence that system design, and not superior panel technology, may account for the third-party advantage. In fact, third-party owners tended to use lower-rated panels, but their better design decisions led to better performance overall.

Guajardo believes there’s a knowledge and skills gap between dedicated solar providers and businesses that run their own systems. “By installing many systems, third-party operators can benefit from learning by doing and economies of scale,” he says.

These results, Guajardo cautions, are particular to non-residential systems that received performance-based incentives in California, and may not apply in places without subsidy programs rewarding performance. He stresses, however, that service business models have been widely used not only in solar energy, but also in several other cleantech markets. Moreover, incentives for adoption of this type of technology have been common in the United States and several other countries.

When it comes to the  adoption of solar energy, Guajardo advises businesses to carefully consider how the incentives behind each ownership model can make a difference from an operational perspective.

 

 

 

 

 

 

 

 

 

 

 

 

 

Don’t blame the machines: New business analytics summit focuses on people

Berkeley-Fisher Center Summit for Business AnalyticsWhile developing a sophisticated algorithm requires technical expertise, leading a successful business analytics project can’t be done without paying attention to people. That’s the theme of the inaugural Berkeley-Fisher Center Summit for Business Analytics, to be held at the California Memorial Stadium on Sept. 27.

The new event, which is free and open to the Haas community, will explore how data-driven technologies like artificial intelligence (AI) and machine learning (ML) affect people in the workforce, and how organizations can align people with processes to drive the success of analytics initiatives.

“Many business analytics initiatives fail, and our research shows it is due to misalignment with people in the workforce, rather than issues with the technology,” says Gauthier Vasseur, executive director of the Fisher Center for Business Analytics, which is part of Berkeley Haas’ Institute for Business Innovation. “Part of our mission is to educate management, finance and operations leaders on how to help their people become supporters of business analytics projects.”

The event, which kicks off with a dinner gala and awards ceremony on the evening of Sept. 26, is expected to attract an audience of about 100 students, industry leaders, alumni, and faculty to share experiences, learn from the latest research and real-world case studies, and network among peers.

“This summit is Berkeley Haas’ first big event around business analytics, and it matches thought leaders from the private sector with academic researchers and talented students who can join together to solve the biggest business challenges,” Vasseur says.

Why people affect the success of business analytics initiatives

Gauthier Vasseur is executive director of the Fisher Center for Business Analytics, which is part of Berkeley Haas’ Institute for Business Innovation.
Gauthier Vasseur

Vasseur shared an example of what happens when an organization overlooks the importance of people. A manufacturing company wanted to use AI and ML technology to solve a very expensive problem: the lost time and productivity that occurs when a machine stops working due to a broken or worn-out part.

The company built a highly sophisticated predictive-analytics platform to assess when parts needed to be replaced. The technology worked very well, but the maintenance workers didn’t trust the predictions and opted against replacing the recommended parts. The problem was that no one had considered their expertise and input, and the company had not shared enough information to earn their confidence in the new technology.

“In the end, the platform provided no benefit to the manufacturer, despite the significant investment and the accuracy of the technology,” adds Vasseur. “Our goal is to give businesses the research findings and tools to avoid these situations.”

Business analytics evolves beyond IT

Launched this year, the new summit reflects how Berkeley Haas has evolved its focus, research and curricula to address one of today’s most urgent business needs: analytics expertise. Formerly known as the Fisher Center for IT and relaunched last February, the center has held conferences for the past six years, focusing on the changing role of the chief information officer (CIO) and recognizing innovative CIOs with an award. This year’s event continues the tradition of presenting the Fisher-Hopper CIO Lifetime Achievement Award and introduces two new award categories: Excellence in Driving Transformation Award and Business Analytics Woman of the Year.

Awards recognize business analytics achievements

David E. Smoley is the chief information officer at AstraZeneca.
David E. Smoley
Ted Colbert is chief information officer at The Boeing Company.
Ted Colbert
Beena Ammanath, Global Vice President for Big data, AI, and Innovation, Hewlett Packard Enterprise
Beena Ammanath

 

 

 

 

 

 

 

This year’s Fisher-Hopper CIO Lifetime Achievement Award goes to David E. Smoley, CIO of AstraZeneca, a global, science-led biopharmaceutical business. At the summit, he will share how he led a performance turnaround that reduced drug development cycle times while reducing IT spending by more than $800 million (48 percent) over three years.

Other awards include the Excellence in Driving Transformation Award, which recognizes The Boeing Company’s CIO and Senior Vice President Ted Colbert, and the Business Analytics Woman of the Year Award, which honors Hewlett Packard Enterprise’s  Global Vice President for Big Data, AI, and Innovation Beena Ammanath.

Demystifying business analytics through research and case studies

Vasseur says the goal of the summit is to put data analytics into an actionable context that comprises data, people and processes for business success. Speakers will help unpack what AI and ML are, and how these technologies can be most effectively applied when including people’s support in their design.

Speakers include Haas faculty members Thomas Lee, associate adjunct professor and director of data science at the center; Andreea Gorbatai, assistant professor in the Management of Organizations Group; and Gregory La Blanc, distinguished teaching fellow with the Finance Group. Additional presentations by industry leaders include:

  • Sabrina Menasria, Chanel’s head of business intelligence and master data governance
  • Todd Wilson, Clif Bar’s senior vice president of IT
  • Robert Brown, Cognizant Technology Solutions’ associate vice president for the Center for the Future of Work
  • Alexandre Robicquet, Crossing Minds’ co-founder and CEO
  • Matteo Melani, Ellipsis Company’s CEO
  • Maik Henkel, Global Foundries’ senior manager and deputy director of finance

Tickets for the Sept. 26 dinner gala are still available here for a donation of $250 or more. The Sept. 27 summit is free to all who register at the bottom of this page.

Read the latest campus information on coronavirus (COVID-19) here →