Page 11

THE COMPETITIVE EDGE Page 14

BEST IN SALES Page 16

OUT OF THE CLASSROOM, INTO THE BOARDROOM Page 18

FOSTER

MICHAEL G. FOSTER SCHOOL OF BUSINESS UNIVERSITY OF WASHINGTON FALL 2009

Think differently. Make a difference.

It’s the Washington Way

Why take risks with your hiring decision?

Foster MBAs know that business isn’t a game of chance

When you need to make a key hire, you want someone who can roll up their sleeves and add immediate value to your organization.

When you hire a Foster MBA, you can trust you’ve made a solid investment. Recruiters say our MBAs are seasoned, smart and easy to work with.

100% of companies recruiting on campus in 2008-09 said they would return again and recommend Foster MBAs to colleagues.

Foster’s MBA Career Center is a conduit to your success.Connect with us and be part of the Foster career network.

206-685-2410 mbajobs@uw.edufoster.washington.edu/mbacareerservices

Think differently. Make a difference.

It’s the Washington Way

FALL 2009 1

11 Where Rigor Meets RelevanceShaping Foster’s new Center for Leadership and Strategic Thinking

14 The Competitive EdgeFoster students compete and win against elite programs around the world

16 Best in SalesSales Program gives Foster students substance as well as style

18 Out of the Classroom, Into the Boardroom

The Business and Economic Development Center’s Board Fellows Program puts students on the board

On the cover

CONTENTS

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2 FOSTER BUSINESS

4 In the NewsQuintessential Leadership, Top Women in Tech, Kindled, Now the Roof, Accounting Honors, Recent Rankings, Foster Goes Social, Advanced China Studies, Opening Doors, Bi-Coastal Alum Events, It’s in the Cards, School of Rock

20 FacultyAccrual Reality, SOX Works, Teaching Excellence, Research Briefs, Adventures in IT

25 StudentsFeasibility of Salmon

26 AlumniGreg Conner, Samantha Rayner, Dorrit Bern, Alumni Events Calendar, Peter Majar, Michel Alvarez

32 Foster FutureTopping Out

20 31

8

Departments

DeanJames Jiambalvo

Executive DirectorMarketing & CommunicationsPamela McCoy

Managing EditorRenate Kroll

Contributing WritersJeff Bonds, Jocelyn Milici Ceder, Jake Ellison, Ed Kromer, Andrew Krueger, Eric Nobis

PhotographyMatt Hagen (principal), Pete Dukes, Paul Gibson,Jennifer Koski, Krista Peterson

Designa.k.a. design

Foster School of Business Marketing & Communications University of WashingtonBox 353200Seattle, WA 98195-3200 206.543.5102206.221.7247 (fax)

On the Webfoster.washington.edu

Foster Business is published twice a year by the University of Washington Foster School of Business. The publication is made possible by donations from alumni and friends. No state funds are used in its production.

Change of Address?fans@uw.edu

Comments?bizmag@uw.edu

Think differently. Make a difference.

CONTENTS

On many occasions, I’ve communicated our goal to become the best public business school. I’ve also discussed our roadmap for getting there. However, I haven’t spent much time expressing what it means to be “best,” or how we’ll measure it. Admittedly, best is a subjective construct and in the world of business schools there is no generally agreed-upon formula, simple or complex, to assess it. And yet, there are a number of measures that indicate we’re heading at a rapid pace in the right direction.

Media rankings, while far from perfect, are one way to measure success. At the end of last year, BusinessWeek listed the Foster MBA Program in their “top-tier” for the first time—placing it at 9th among public schools. This spring, our Undergraduate Program followed suit, also receiving a rank of 9th among public schools.

Undergraduate and MBA student success in case competitions is another useful performance measure. Not surprisingly, when Foster students compete head-to-head in these “brand blind” events, they frequently come out on top of students from schools that media rankings suggest are the best in the world.

Our reputation with recruiters is also a way to gauge performance. We’ve recently received comments that our graduates are “well-prepared to succeed,” and “have the key components to fill our needs and move to a high potential employee quickly.”

Another important measure is the opinion of our graduates, and this past year they expressed their vote for “Best B-School” with financial commitments. The undergraduate class of 2009 created the “Foster Community Fund” which provides resources to student organizations so they can bring speakers to campus and host events. Over 100 seniors made gifts to enhance our undergraduate experience.

And, in one of the toughest job markets ever, our MBA graduates contributed a record $77,000 to establish a scholarship fund. Chris Comer (MBA 2009) and Craig Wiley (MBA 2009), along with 10 other volunteers, spearheaded the fundraising. One of the MBA volunteers was Scott Greco (MBA 2009), now an active-duty US Army Major and an engineering economics instructor at West Point.

Scott recently sent me an e-mail about his experience at Foster, some of which I’ll share:

“I can’t thank you enough for the two-year experience that you and your team provided me. Leadership and Strategic Thinking are obviously essential skills for my career as an Army Officer and Aviator, and the opportunity to focus on these elements with such gifted professors, students, and members of the Seattle business community was a tremendous blessing to me personally. I will always be tremendously loyal to the Foster School…. I hope that I can offer these cadets even a fraction of the academic experience that I received while in Seattle.”

Thanks, Scott. And thanks to the many, many people who are contributing to Foster’s success. With the incredible support of our alumni, friends, business partners, faculty, and staff, I have little doubt that being the best is well within our reach.

Sincerely,

James JiambalvoDean, Michael G. Foster School of Business Kirby L. Cramer Chair in Business Administration

Building Around Best

FALL 2009 3

4 FOSTER BUSINESS

The Foster School researches, teaches, and practices leadership all year long—but one night each year we celebrate the “best of the best” among our alumni and business partners. Join hundreds of current and future leaders for an evening that showcases the strength and reach of the UW business network.

Keynote Speaker: Marilyn Carlson Nelson, Chairman, CarlsonThe parent company of Radisson, Country Inns & Suites, Regent, Carlson Wagonlit Travel, and T.G.I. Friday’s, Carlson employs 160,000 people in more than 150 countries. Marilyn Carlson Nelson has grown the multibillion dollar hospitality and travel giant into one of the world’s largest privately held companies and has long held a place in media listings among the world’s most powerful women and best leaders. To these ends, she

chaired a bi-partisan advisory council for the President of the United States, co-chaired the World Economic Forum, and serves on a variety of notable corporate and civic boards. She is also the author of How We Lead Matters, which will be provided to registered guests attending the Foster School’s premier community event.

2009 Distinguished Leadership AwardsThree of the Foster School’s most accomplished alumni will be honored with Distinguished Leadership Awards.

Phyllis Campbell (MBA 1987)Chairman of the Pacific Northwest, JPMorgan Chase

Chris DeWolfe (BA 1988)Co-founder, MySpace

Don Nielsen (BA 1960)Chairman, Light Doctor LLC n

Quintessential LeadershipEnjoy an evening of connection, inspiration, and celebration

IN THE NEWS

18TH ANNUAL BUSINESS LEADERSHIP CELEBRATION

November 5, 2009 6:00 – 9:30 p.m. Sheraton Seattle Hotel, Grand Ballroom

Individual:$150, public reception and dinner

Patron:$300, priority dinner seating and private award recipient reception

($25 discount for Foster Dean’s Club members)

For information on purchasing a table or providing an “event scholarship” for current students, contact Jenny Selby at jselby@uw.edu.

PHYLLIS CAMPBELL

CHRIS DEWOLFE

DON NIELSEN

FALL 2009 5

The Foster School of Business is well- represented in the inaugural “100 Top Women in Seattle Tech” listing compiled by TechFlash, the blog powered by the Puget Sound Business Journal.

Among the notables are Connie Bourassa-Shaw, director of the Foster Center for Innovation and Entrepreneurship, as well as CIE board members Emer Dooley (MBA 1992, PhD 2000), a lecturer at the Foster School; Cathi Hatch, founder and CEO of Zino Society; Loretta Little, managing director of WRF Capital; Kristi Marchbanks (BA 1984), partner at The Clarion Group; and Linden Rhoads, vice provost of UW Tech Transfer.

Additionally, the list includes Foster School alumnae Suzan DelBene (MBA 1990), former senior executive of Microsoft and Drugstore.com; Rebecca Lovell (MBA 2006), executive director of Northwest Entrepre-neur Network; Linda Merrick (MBA 1985), founder and principal at Pivotal Product Management; H. Stewart Parker (MBA 1980), former CEO of Targeted Genetics; Shelley Reynolds (BA 1987), vice-president and worldwide controller of Amazon.com; Susan Sigl (BA 1974, MBA 1979), general partner at SeaPoint Ventures; and Michelle Wilson (BA 1985), senior vice president and general counsel of Amazon.com. n

Still on schedule and on budget, summer construction of the new $95 million PACCAR Hall saw the second through fifth floors going up and then the roof structures. By November, Sellen Construction plans to have enough of the 135,000 square feet, state-of-the-art facility enclosed to keep out the fall rains.

In addition to the exterior shape, the lower-floor interiors are showing form (notice the comparison at left between the architect’s rendering, and progress on the same area as of August). The bathrooms are roughed in, and the ceiling is filled with duct work, data, and electrical conduits, as well as water and sewer pipes. On the second and third floors, classrooms are taking shape as the studs and sheetrock are installed.

Outside, the glass curtain walls are being erected, and the exterior brick is completed on the east and north sides of the building, and soon the brickwork on the large west wall will begin. PACCAR Hall is scheduled to be completed by June 30, 2010. See page 32 for the latest photos. n

Now the Roof

Eleven months into construction, PACCAR Hall is nearly rain tight

KindledTechnology Management MBA students test drive Amazon Kindle DX

As part of their Program Orientation in Decem-ber of 2009, incoming Technology Management MBA (TMMBA) students at the Foster School will receive a Kindle DX, Amazon’s latest wire-less reading device.

The MBAs will join graduate students in Computer Science & Engineering as pilot participants at UW, one of seven colleges and universities conducting a Kindle DX pilot program.

The goals of the pilot are to explore the use of electronic readers in university classes, and to discover their strengths and weaknesses relative to traditional content delivery.

TMMBA staff and faculty believe that the Kindle DX platform will be a perfect fit for students entering the program. Over the past several years, they’ve experienced a strong demand for digital delivery from students, demand which has grown along with the advances in technology such as the Kindle DX that make digital delivery practical.

Additionally, the TMMBA Program is largely comprised of professionals at technology companies, engineers, developers, and entrepreneurs that are natural early adopters of technology tools, applications, and devices.

When asked about the Kindle DX pilot, Dan Turner, associate dean for Masters Programs and Executive Education, noted that it provides a great educational oppor-tunity. “The TMMBA Program supports the School’s focus on strategic thinking and leadership, and that implies giving students essential tools, theories, frameworks, and experiences to solve complex, real-world, unstructured challenges,” said Turner.

“I can’t think of a better ‘learning by doing’ marketing research exercise in the interface between technology and management than the Kindle DX pilot.” n

TOP WOMEN IN TECH

6 FOSTER BUSINESS

Members of the Delta chapter of Beta Alpha Psi, comprised of students at the Foster School, had much to celebrate following the prestigious accounting organization’s annual meeting held in August in Brooklyn, NY.

Distinguishing themselves among the 284 chapters vying for top honors, Foster accounting students brought home five awards:

Gold Chapter Challenge – This inaugural award was given to chapters that go above and beyond what is required to receive the Beta Alpha Psi designation of “Superior Chapter”—successful professional meetings, regional competition success, and community service. Foster’s Delta chapter was one of only 14 chapters to receive the recognition along with a $2,500 award.

IRS | Volunteer Income Tax Assistance (VITA) Award – Delta chapter won the award for having the largest number of members contributing at least five hours of service to the VITA program. From their student-run site located in Lake City, they prepared more than 200 tax returns for low income clients.

Diversity Initiative Award – Delta chapter was recognized for two programs: one in which students served as accounting consultants to minority-owned small businesses, the other a series of workshops for Asian and American born members to learn about cultural differences in business behaviors.

Best Practices: Service Learning – Led by Alvin Lai, Eric Liang, and Jessica Nguyen, Delta chapter received an honorable mention for their partnership with Foster’s Business and Economic Development Center to provide nearly 800 hours of accounting consultation to minority-owned businesses.

Medal of Inspiration – Beta Alpha Psi’s most prestigious individual honor—which included a $5,000 stipend—was awarded to Marilu Cruz, a Delta chapter member who has overcome extreme hardships and achieved a high level of success in spite of that adversity.

“To say that I’m proud of our students is putting it mildly,” said Deborah Medlar, faculty advisor for Beta Alpha Psi at the Foster School. “Their passion and professionalism is second to none and the awards are one result. More importantly, their efforts enrich each other, the Foster School, and the greater Seattle community.”

The Foster School’s Beta Alpha Psi, founded in 1921, is the organization’s fourth-oldest chapter. It’s also one of the largest (annual membership between 200-250 students) and most celebrated.

Beta Alpha Psi provides professional development to nearly half of all accounting students at the Foster School, as well as numerous community service opportunities. n

Accounting HonorsBeta Alpha Psi continues to shine on a national level

IN THE NEWS

RECENT RANKINGS = GOOD NEWS

Undergraduate Program stands its groundThe Foster School of Business Undergradu-ate Program was ranked 12th among public institutions, and 21st overall, in the most recent edition of “America’s Best Colleges,” released by U.S. News & World Report in August.

Both rankings are identical to the previous year.

In addition to the overall rankings, Foster was ranked 13th in the area of accounting and 9th in the area of interna-tional business.

The entrepreneurial edgeThe Center for Innovation and Entrepreneur-ship (CIE) at the Foster School of Business is 7th among graduate programs in entrepreneurship according to rankings compiled by The Princeton Review and pub-lished in the October issue of Entrepreneur.

The ranking is a significant jump from last year’s spot at 25th.

The Center’s Technology Entrepreneur-ship Certificate for MBA and engineering students, Environmental Innovation Chal-lenge, and market research internships with UW TechTransfer were among the innova-tive programs cited in the decision.

UW gets green kudosThe UW received high marks for its sus-tainability efforts in two recent “green” rankings.

Sierra Magazine ranked the UW second in the country in its annual listing of the “Most Eco-Enlightened U.S. Universities.” With a score of 98 out of 100 points, the UW moved up from 9th place in 2008.

UW was also named to the 2010 Green Rating Honor Roll by The Princeton Review after receiving the highest possible score under the Review’s rating system. Only 15 institutions were selected for the honor roll from among 697 that completed a survey. n

FALL 2009 7

FOSTER GOES SOCIAL

Social networking. This Web 2.0 concept from just a few short dog-years ago has practically gone mainstream. Moms are blogging. Grandpas are tweeting. Students today? They’ll invent the next iteration of social media…or the Web.

Like the rest of the modern world, the Foster community is embracing social networking. Alumni, for instance, are plugged in to LinkedIn, Facebook, Twitter, and other social sites to connect with each other, stay in touch, track business trends, and tune in to news, events, current affairs, entertainment, and so forth.

For over 90 years, the Foster School has educated leaders who think differently. Now there’s a bevy of new digital ways that students, alumni, academics, business leaders, and friends can connect with the greater Foster community.

Blog bytes“Foster Unplugged”—the main school blog—just launched in September 2009 and will cover business issues, life around the Foster School, and within its extended community network. Full-time MBA student Jessica Didion is blogging at “Inside the Foster MBA” about life as a Foster student for prospects investigating graduate school

options. The Technology Management MBA Program blog—“TMMBA Talk”—highlights its student experience. Foster undergradu-ates who study or work abroad blog about their international business treks on “Un-dergrads Go Global.” More blogs, including one devoted to innovation and entrepre-neurship, are emerging later this fall.

Fans + tweets + multimediaFoster’s main Facebook fan page has grown to over 1,300 “fans” (at the time of print) in less than a year. A Twitter page was recently kicked off. Both social venues feature Foster news, research, events, videos, photos, as well as student and alumni happenings.

Foster professors Michael Johnson and Morela Hernandez air podcasts on a plethora of timely management topics such as early warning signs of burn-out, downsizing, trust, motivation, and char-ismatic leadership. Issues are drawn from interviews with researchers from around the world.

Video clips of life around Foster and leadership-in-action stories are posted on YouTube and event snapshots are on Flickr.

Linking inFoster alumni are actively networking, job searching, keeping in touch, sharing

résumés, and putting their best digital foot forward on LinkedIn.com, the social networking site for professionals. Foster School’s MBA Career Services center has established an “official” LinkedIn alumni group for all Foster MBAs, verifying that people who join the group are bona fide Foster MBA grads.

An all-encompassing alumni group for both undergraduate and graduate Foster School alums is now formed. “For alumni who don’t visit our Web site, we want to reach them where they are—on LinkedIn. Professionals can seek advice or find talented leaders for jobs among Foster alumni,” says Laura McCloud Mathers, Foster’s associate director of Alumni Engagement.

Ultimately, the goal of a central Foster alumni group on LinkedIn.com is a place where alumni can connect with each other, get the latest faculty research, and receive event announcements. They’ll also be able to post jobs, look for business partner-ship opportunities, and share professional expertise.

For a Web 2.0 roll-up of social media at Foster, visit www.foster.washington.edu/socialmedia. n

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IN THE NEWS

How much can you learn about the Chinese economy in nine days?

An extraordinary amount—if you know the right people. And the Global Business Center (GBC) knows the right people.

The endlessly connected GBC led the Foster School’s first faculty tour of Shanghai and Beijing in September. Six faculty members met with companies and government organizations to discuss the current business environment, developments in green energy and renewable resources, adapted business strategies, and the unique challenges faced by China and Chinese business in the 21st century.

“The program was designed to enhance the educational mission of the GBC and the Foster School, as well as expand the international perspective of our faculty,” says Krista Peterson, associate director of the GBC, who led the visits.

The itinerary included stops at the China headquarters of Microsoft, Weyerhaeuser, Boeing, and F5 Networks. Participants also visited the new US Embassy in Beijing and met with the Energy Resource Institute, a partner in the US-China Clean Energy Forum, and the US Commercial Service. Receptions with area Foster alumni and faculty at Shanghai Jaio Tong University and Peking University rounded out a whirlwind week.

Participating in this pilot tour were Doug MacLachlan, the Marion Ingersoll Endowed Professor of Marketing; Jennifer Koski, an associate professor of finance and John B. and Delores L. Fery Faculty Fellow; Jarrad Harford, the Marion Ingersoll Endowed Professor of Finance; Ming Fan, associate professor of information systems; Apurva Jain, associate professor of operations management; and Jane George-Falvy Reynolds, lecturer in management and faculty director of the UW Global Social Entrepreneurship Competition. n

ADVANCED CHINA STUDIES

Global Business Center leads first faculty tour of Shanghai and Beijing

Opening Doors

Young Executives of Color Program receives support from Ernst & Young

Ernst & Young has pledged $75,000 over the next three years to the Foster School’s Business Undergraduate Di-versity Services in support of the Young Executives of Color Program.

Established in 2006, Young Execu-tives of Color (YEOC) is a nine-month college pipeline program focused on engaging and assisting high school students of color in a comprehensive curriculum including: college readiness, professional development and leader-ship activities, and lectures rooted in business disciplines.

Additionally, all YEOC participants are paired with a Foster School student mentor who helps them navigate the program, develop tools for academic and personal success in high school, and prepare for college application and scholarship processes. Mentors also provide students with information about various business majors and their academic experience at the school.

A majority of the YEOC student participants are among the first in their family to attend college. Graduates of last year’s program are attending insti-tutions around the country, including the UW, US Naval Academy, Duke, and Notre Dame.

Given the goals of the program, Ernst & Young’s support is a perfect match. One of the company’s three corporate responsibility initiatives is education, specifically “increasing access to higher education, especially for disadvantaged and minority students, by helping to engage them in the learning process and by facilitating their understanding of how to finance education.”

Ernst and Young’s support will allow the YEOC program to grow its scope, breadth of programming and overall reach of student participation. n

FALL 2009 9

The job market for MBAs may be more chal-lenging than it has been in decades, but that hasn’t slowed down the amazing team, led by MBA Career Services Director Paula Klem-pay, that connects MBA students and alumni with recruiters and employers. After all, this is the team that bucked last year’s downward job placement trends, issued a book show-casing exceptional Mentoring Moments, and helped 100 percent of the class of 2010 land solid internships this past summer.

“We never stop looking for new ways to showcase Foster’s MBA talent,” said Klempay.

That’s one reason why, on November 12th, the Foster School MBA Career Services team will be hosting alumni recep-tions on both coasts—in New York and San Francisco. The goal of the events is for alumni to connect with each other, and also to meet students. The atmosphere at these happy hour-style functions may be relaxed, but the students are coached to bring their A-games. “There is really no room for error

in this job market,” said Bryan Tomlinson, employer relations director of MBA Career Services. “Sometimes Q & A with an alum prepared to go out on a limb for an MBA student looks like a lightning round of “Who Wants to Be a Millionaire,” without the ability to phone a friend.”

Tomlinson is up to the task of preparing students for networking. 2009 saw him take home both the Foster Award for Staff Excellence, as voted on by colleagues, and the Daniel R. Siegel Service Award for Most Influential Non-Faculty Member, as voted by the class of 2009. A 3rd generation Husky, he brings dawg-like tenacity to his work—which focuses on enhancing Foster’s recruiting relationship in the Pacific North-west and beyond.

“I’m definitely part of a strong team here,” said Tomlinson. “The admissions team does a great job getting us the best talent; we watch the students develop as they learn from top faculty; and then we

help them market themselves to great firms across the country.” n

ALUMNI RECEPTIONSThursday, November 12th5:30PM – 8:30PMAppetizers Provided – Cash Bar

SAN FRANCISCO E&O Trading Company314 Sutter StreetSan Francisco, CA 94108

NEW YORKThe Bull & Bear Steakhouse Bar at the Waldorf Astoria 570 Lexington AvenueNew York, NY 10022

Connect with fellow Foster alumni and visiting students in either SF or NY!

RSVP to Bryan Tomlinson: btom@uw.edu or 206-685-4720

BI-COASTAL ALUM EVENTSAlums and MBA students gather to talk shop in New York and San Francisco

Topps baseball cards served as the inspiration behind last year’s inaugural pack of Foster faculty trading cards, a marketing effort being replicated for the 2009-10 academic season.

The trading card concept came from Foster’s marketing team after Dean Jim Jiambalvo challenged them to come up with an idea that would break through the clutter of business school marketing campaigns.

Last year’s pack featured new faculty, designated as “Rookies,” and some veteran faculty, designated as “All Stars.” The faculty member’s name and photo appeared on the front, while the back of each card featured academic credentials, career highlights, and a “did you know?” fact highlighting an interest outside of academia.

A very different approach from the customary letters and brochures used to promote faculty and research, the project met with success. The cards elicited numerous posi-tive messages from business schools around the country. They also received some media attention, including an article in BizEd, the bi-monthly trade magazine produced by the Association to Advance Collegiate Schools of Business.

Based on that success, a 2009-10 set was produced—with some twists. The new pack features ten faculty “All Star” cards and four specialty cards, including a “New Stadium” card for PACCAR Hall and a “Hall of Fame” card of former dean, Dr. Nancy Jacob. n

It’s in the Cards

10 FOSTER BUSINESS

A green-haired, eyebrow-pierced profes-sional rock drummer heading into an elite MBA program, Bob Zammit (MBA 2009) expected to fill some kind of diversity quota for oddballs.

To his surprise, he found plenty of other characters—of great character—at the Foster School. “I thought I’d tolerate MBA classmates for the sake of MBA skills,” he admits. “But I was floored to find such a great diversity of backgrounds. The people I met were genuinely different, eccentric, cool. And I loved that.”

He also found musicians. Lots of them. Talented ones.

It’s a good thing, since Zammit entered the Foster MBA Program bent on forming a rock band to represent the school at the MBA Challenge for Charity (C4C). That’s right, the annual competition among west coast business schools to raise money and volunteer hours for local charities includes a battle of the bands. And before Zammit arrived, Foster had never entered.

“The idea that all of these California schools were represented and the school from Seattle didn’t field a band was outra-geous,” he said.

So he got to work. He recruited guitarist Jason Davis (MBA 2009) and trumpeter Nick Robinson (MBA 2009) from his first-year study group. Then a revolving roster of musicians from the full-time and evening programs filled out one band, then a second. They rehearsed in the late-night margins between studies and class. They test-marketed their sets—covering the Jackson 5 to Jimi Hendrix, Radiohead to the Red Hot Chili Peppers—with classmates to “optimize our awesome,” Zammit says. “People loved it so much, it was ridiculous.”

They also loved it at C4C. Though the band battle was officially outside of compe-tition, “We killed it,” Zammit reports. “It was pretty clear that we were the band to beat. It’s one of those symbolic things: how cool is your MBA program?”

Now “retired” from MBA band, Zammit looks back as a proud founding father. He says the classes of 2010 and 2011 have some great players who have already been rehearsing over summer. “We didn’t just want this to be fun for us,” he says. “We wanted to come back as alumni and say, our school kicks ass: we have a rock band. The one to beat.” n

IN THE NEWS

SCHOOL OF ROCKMBA drummer incites a high decibel Foster tradition

THE NAME GAMESince the MBA band rosters were different every show, they decided to use a different name each time. “Ideas were generated by a rigorous proprietary process involving shared spreadsheets, business school puns, professor tributes, and late-night delirium,” says founder Bob Zammit. Here are a few:

QMETH LAB

HILL & HILLIER

FRIENDS WITH COST-BENEFITS

JANE KENNEDY’S ADDICTION

TOXIC ASSETS

FARES BOULOS’ DAY OFF

MARGIE REVENUE AND THE 5 FORCES

DEGREES OF FREEDOM

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MEETSRELEVANCE

Shaping Foster’s new Center for Leadership & Strategic Thinking

Look around the world of b-schools and the words “leader-ship” and “strategic thinking” frequently appear. It seems that every school wants to claim them as descriptors for

their programs and people. With good reason.Research supports the push for greater development of these

skills—C-level executives rank them in a group of the most important skills for employees to bring into their organizations. It’s one of the reasons that Dean Jim Jiambalvo orchestrated an effort to infuse the core curriculum with these skills and created the Foster Center for Leadership and Strategic Thinking.

So, how will Foster differentiate itself from the competition? According to Bruce Avolio, Marion B. Ingersoll Professor of Management and executive director of Foster’s new Center, it’s about rigor, relevance, and ownership.

Since opening the Center in January, Avolio, his colleagues, and staff have established a path for strategic success. The path includes working within existing partnerships, and creating new ones, to further a research agenda that is building evidence-based models, methods, and measures of genuine leadership develop-ment. The Center is also building on Foster’s mantra to immerse students in real-world experiences and challenges while instilling a sense of ownership in their development.

Scholarship at the extremeImagine yourself in charge of a platoon entering a hostile, war-time environment. Your decisions are guided by the US Army’s Rules of Engagement. The use of force, even deadly force, is a possibility if it means protecting your unit, civilians, and others. And then a situation arises in which all of your training and assumptions are challenged in a split second.

Scenarios that present ethical and moral dilemmas are faced by countless leaders in all sectors of society, including the military, every day, and the decisions made have major consequences. For future military leaders, many will face the moment of critical decision-making in simulation before they ever reach the battlefield as a result of research being conducted by the Army Center of Excellence for the

FALL 2009 11

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Professional Military Ethic (ACPME) at the US Military Academy at West Point in collaboration with Foster’s Center for Leadership & Strategic Thinking.

Currently referred to as the “ethical leadership decision simu-lator,” the project is based on a series of video-taped ethical dilemmas that have been recently faced by military leaders and will be used throughout the US Army to assess and enhance ethical leadership development among junior leaders such as squad and platoon leaders.

Alongside a team of Army researchers and officers, Avolio has served as an expert advisor to help develop scenarios that reflect real ethical leadership challenges that also are based on a theoretical framework that underlies each. But his real passion for the project will come from validating its effects. If the soldiers tested in the simulation are positively impacted in the way they address ethical leadership decisions, the simulation model could have benefits far beyond the military.

“The result will be practical knowledge that we can advance for industry in general, leader-ship in general, management in general,” says Colonel Sean Hannah, director of the ACPME. “When we look at organizations that operate in extreme contexts, what we can do is stretch some of our ideas, and the way we function as leaders to the extreme and learn more about them. For example, if we know how trust oper-ates in situations where interdependencies can lead to life or death, we believe that we can learn more about trust in general.”

Avolio agrees and points to other industries that operate in extreme conditions, such as fire fighting, police services, health care, and even finance. Ultimately, the Center hopes to establish similar partnerships focused on high impact, strategic leadership projects that advance both the partnering organization’s leadership effectiveness and the Center’s research agenda.

And, he sees potential for developing something similar for Foster MBA programs, using the Army research as a starting point to develop a simulation program with scenarios relevant to the busi-ness world that will include ethical and other leadership challenges.

Real-time relevanceWhile video simulations, like case studies and research, provide a rigorous foundation for learning, there is nothing quite as relevant as real-time challenges. Enter “cases without borders.”

In the coming months, the Center will develop relationships with innovative organizations and create experiential cases that offer Foster student teams opportunities to tackle real-world, real-time issues—interacting alongside the individuals within the organization tasked with addressing the issue.

The concept was tested in part this summer with a class of Technology Management MBAs. As part of their Leadership class, student teams were asked to create a leadership case based on

rigor and relevance. The rigor came from challenging students to pose their leadership

issue as a testable question that could eventually be defined and then measured; they were then asked to create a thought experiment of sorts whereby they could systematically examine different courses of actions and determine what their consequences might be based

on the path chosen. This required students to find research related to their question and to use that research to guide the creation of their thought experiment.

Avolio points out that most case-based assignments teach the outcomes of what scholars have already learned. Also, these assignments engage them in something that is not emotional, because it’s ‘not their problem.’ “In most leadership courses, we don’t teach how we came to the conclusion that X or Y is a better leadership strategy. We tell them what works and what doesn’t. Instead of teaching how we discovered something, we teach what we discovered. By giving them some experi-ence with the rigor of systematic investigation, we are going to make them better strategic thinkers and, in turn, leaders,” says Avolio.

Graham Tharp is one of the students who took the class. “Writing the case was a unique aspect of the class. We had to look at a lot of academic research underpinning each issue or aspect of the scenario we chose to address,” says Tharp. “In the real world, the rigor aspect often gets dismissed. Immersing ourselves in the research—and having to balance it

alongside the practical—provided a great opportunity to develop our managerial mindset. Leaving rigor out of the decision-making process can negatively impact the outcome and vice versa.”

And the relevance factor? Organized in teams, each student shared a current, real challenge or opportunity occurring in their workplace. Each team then picked the issue they felt offered the best opportunity for learning.

“Addressing a real-life, nuts-and-bolts problem was a valuable experience. It was taking place in the present and all of the issues chosen by the teams were salient,” says Tharp. “For example, my team looked at a reorganization where there was a high level of ambiguity. It was the type of challenge you could face anywhere in the business world during the course of your career.”

“The students’ passion for the assignment was due in large part to the relevance of the issues they addressed. They’re relevant because they formed questions around real issues that were taking place in their work lives: product launches, reorgs, manage-ment acquisitions…” says Avolio. “Leadership development occurs in context rather than in class, and one way to bridge that is to bring context into the classroom. Make the class a laboratory for looking at context.”

“Leadership development occurs in context rather than in class and one way to bridge that is to bring context into the classroom.”

BRUCE AVOLIO

FALL 2009 13

To get it, you have to own itFor full-time MBAs, there may be no more relevant and rigorous a setting for developing leadership skills than the MBA experience itself. However, there is little value in the experience unless they feel—and act upon—a sense of ownership.

“I think it’s actually how much they push themselves to gain self insight and put what they learn into practice,“ says Morela Hernandez, an assistant professor of management. “I give them the tools but if they don’t use them, they won’t develop as leaders.”

Opportunities to develop as a leader are presented from the moment MBAs arrive on campus. All MBA students kick off the program with Leadership, Exploration, Association, Direction activi-ties (LEAD Week to those involved), that immerse each incoming class into Foster’s MBA experience.

During the intensive orientation, students get to know each other in a fun, interactive, yet challenging environment. They learn about club activities and student support, begin to craft a strategic plan for their professional development, and attend the first sessions of core classes. They’re also tasked with choosing from a number of volunteer academic leadership opportunities. The roles vary in scope and charge, including acting as a Board Fellow for a local organization (see article on page 18), as an ambassador to the MBA Program to prospective students, and as liaison between the full-time first-year students and the MBA Association, faculty, and administration.

Serving in such leadership roles demands commitment. Dan Poston, assistant dean for Masters Programs, notes that students

are asked early on to select leadership roles in the MBA Program that suit their interests and career objectives. As students take on these various roles in the program it becomes apparent to all who is doing a great job and, in some cases, who is not. Students who excel in leadership roles are recognized. Students who struggle are coached on how to do better.

“There are some students that expect the MBA experience to be scripted and that the end result is a degree in hand that says ‘I’m different now’,” says Poston. “But that’s not the case. There is no template. They need to make choices, take on responsibility, and be self-aware throughout the process of how their actions affect their growth and the growth of their classmates. They need to be owners and co-creators of the experience.”

And this year’s LEAD Week has some additional challenges. Avolio asked a team of colleagues, including those at the new Center to find a fresh way of establishing and demonstrating a sense of ownership in Foster from the start.

After some degree of brainstorming, the LEAD Week team settled on asking the class to conduct a ‘teach back’ session through which students will, in essence, ‘own’ the final afternoon of the program immersion. The goal of the “teach back” exercise is to have students take what they learn from the lectures and sessions and apply it to the class they want to become over the next two years. What will they own? What will Foster Inc. Class of 2011 be known for in years to come?

While the Class of 2011 will be as unique as every class that came before it, there are some assumptions the new Center hopes each student will embrace when they graduate. First, that leadership and strategic thinking are increasingly being distributed throughout organizations at all levels, across functions and, indeed in many instances, across geographical and cultural boundaries. Second, that organizations that are better at resourcing every employee to lead horizontally, diagonally and vertically will be better prepared to optimize and sustain growth.

“Throughout history leadership has been typically associated with a person,” says Avolio. “Yet effective leadership is never accomplished alone.” n

Podcasts of assistant pro-fessors of management, Morela Hernandez and Michael Johnson, inter-viewing other researchers and professors on topics such as shared leadership, trust in cross-cultural busi-ness relationships, stress, and fairness.

The Asia Leadership Study, an assessment of the “collective” leader-ship profile of six of the most dynamic cities on earth: Beijing, Shanghai, Singapore, Hong Kong, Mumbai, and Bangalore.

Video of Dan Turner, associate dean for Masters Programs and Executive Education, discussing how leadership and strategic thinking are at the core of Foster’s educational experience.

A brief survey by which your input can assist us in further exploring the nature of leadership development and how we can assist in accelerat-ing it.

Video of Dr. Bruce Avolio, professor of management, and William S. Ayer (MBA 1978), Chairman & CEO of Alaska Air Group, as they discuss authentic leadership with Foster alumni.

LOG ON FOR LEADERSHIPCan’t get enough on the topic of leadership? Explore the Centers, Faculty & Research page at the Foster School Web site. Here’s a sampling of what you’ll find:

MBA students at LEAD Week

14 FOSTER BUSINESS

No one was remotely surprised when four Foster School MBA students won the KeyBank-Ohio State University Minority Case Competition in March.

It was merely the culmination of an unprecedented year of success for Foster in direct competition against students from top schools in the US and around the world. For the 2008-09 academic year, Foster MBA and undergraduate teams finished first six times and second six times at major national and international competitions.

The list of victories includes the Silicon Valley Venture Capital Investment Competition, the Thammasat Undergraduate Business Challenge in Bangkok, Thailand, and the Business Strategy Chal-lenge in Washington, DC. Among the vanquished: USC, Chicago, Wharton, Yale, Virginia, UC-Berkeley, Carnegie Mellon, Notre Dame, NYU, Northwestern, North Carolina and UT-Austin, as well as top schools in China, France, Ireland, the Netherlands, and Singapore, to name just a few.

Dean Jim Jiambalvo credits these successes to the quality of the students and Foster’s focus on strategic thinking and teamwork.

“One of the best things about these competitions is that they are brand blind,” says Jiambalvo. “They are really the only occa-sions in which business schools compete against one another on a level playing field because the judges don’t know what schools

the teams are from. They only know who’s the best. So, our success against many of the nation’s other highly ranked business schools is a great source of pride for the students and the faculty.”

Burgeoning interestWhile such success is becoming commonplace for Foster teams, case competitions have only recently become a component of the school’s curriculum. A few years ago, Foster students attended maybe two or three competitions a year. But in the 2009-10 academic year, students are expected to compete in 20 or more competitions.

“This decade the number of these competitions has climbed and the interest among Foster MBAs has exploded,” says Dan Poston, assistant dean for Masters Programs.

The competitions have also earned the support of the business community, with local industry titans Amazon, Boeing, Micro-soft, and Starbucks, among others, sponsoring the events. These businesses have found that case competitions are a good way to market their companies and spot top talent.

They can also be a way to divine good ideas and strategies that warrant deeper investigation. Starbucks executives, for instance, recently invited a Foster team to present its vision for the company’s music division, straight out of competition. Microsoft

The Foster School’s focus on strategic thinking and teamwork has proven to be a winning combination against elite programs around the worldEDGE

THECOMPETITIVE

FALL 2009 15

“Competitions are a legitimate assessment of the prowess of our students. But this isn’t only about winning. It’s about teaching our students to think strategically, compete, communicate, and work well in teams. Those are some of the skills that they will need to be successes in the future.”

DEAN JIM JIAMBALVO

officials were so impressed with a competitive presentation by Foster students that they brought them to the Redmond campus to address the entire Office Live team.

Experiential learningFor Foster faculty, case competitions represent a critical teaching tool. Intramural competitions—which hone both analytical and presentation skills—are now an important part of the curriculum for both undergraduate and MBA students.

“More and more companies want to see students with ‘soft skills,’ ” Jiambalvo says. “Two of the most important of these are the ability to communicate effectively and work well as part of a team. That is exactly what you do in a case competition. You have to present your ideas in a cohesive and creative manner. You also have to cooperate and work as a team to make sure that the sum is better than the parts.”

Unlike many schools, Foster does not hand-pick the student teams it sends to prestigious competitions. Instead, students form their own teams, and compete internally when more than one team wishes to attend an event. And rather than undergo a battery of training in advance of competition, Foster students go through a simulated event to get a sense of what to expect when faced with a puzzling business conundrum and 24 hours to fix it.

“Our teams are only utilizing the experiences and skills they have been developing through the general curriculum,” says Dan Turner, associate dean for Masters Programs and Executive Educa-tion. “We are happy to say that they are competing quite well against highly-selected, highly-drilled teams from other schools.”

The school’s style of “self-selection” contributes to a strong team dynamic. “It also suggests that our successful record does not reflect the talents of a few stars,” Poston says. “But, instead, shows that these skills run much deeper among many of our students.”

Students regularly count case competition experiences among the highlights of their Foster education.

“The ultimate payoff is their reaction,” adds Poston. “I have students tell me how fantastic the experience was and how the competition forced them to use all of their skills and to work together as a team.”

Variations on a theme The growing popularity of inter-school competitions has led to a proliferation of different formats.

Most of the events are still traditional case competitions: students are presented a real-world business problem to solve in a short amount of time (often 24 hectic hours), culminating in a presentation to a panel of judges, usually comprised of professors, practitioners, and at least some representatives of the company in question. Judgment rests on the feasibility and quality of the proposal, and the style and quality of the presentation.

Business plan competitions are another type of high-stakes contest rising in popularity. Student teams develop a business or product plan and pitch to a panel of professional investors and entrepreneurs who judge them on concept and quality of presen-tation. A variation is the Venture Capital Investment Competition in which the students evaluate business plan pitches for real start-ups seeking capital, and are judged on the soundness of their questioning and investment strategy.

Whatever the type of competition, the accolades from placing well are great, but Jiambalvo says the process is really about offering the most comprehensive education possible for tomor-row’s business leaders.

“Competitions are a legitimate assessment of the prowess of our students. But this isn’t only about winning,” says Jiambalvo. “It’s about teaching our students to think strategically, compete, communicate, and work well in teams. Those are some of the skills that they will need to be successes in the future.” n

16 FOSTER BUSINESS

BEST IN SALES Twitter and LinkedIn may help you make a sale, but there’s really no substitute for showing up 15 minutes early for a meeting. To make sure that you’re on time in case of traffic? Sure. But more importantly, to give you extra time in front of the customer or a moment to soak up some of the office atmosphere so you can build a smarter, more effective business relationship.

This is just one tip among the iceberg of professional knowl-edge students in the Foster School get when they complement their undergraduate degree with a Sales Program Certificate.

“That’s what made me stand out from other candidates,” said Britnee Weza, a 2009 Sales Program graduate who landed a coveted position with Vistakon Pharmaceuticals, a division of Johnson & Johnson. Weza was one of nine candidates hired out of the 50 initially recruited from around the nation.

“The Sales Program set some very good expectations and showed the opportunities that were out there, as well as provided realistic on-the-job training,” Weza said.

“Year after year, some of the most polished graduates of the Foster School have earned a certificate from our Sales Program,” said Dean James Jiambalvo. “The background provided by this program really counts when students start looking for their first

professional job.”Because, as Sales

Program director Jack Rhodes says, “Selling will always be about more than making a sale.”

And because of the education Rhodes and his team provide UW students, not all of whom are business majors, dozens of regional, national and international compa-nies open their doors to Foster Internships,

a coveted and challenging requirement in the Sales Program. Many of those companies like what they see and offer jobs to Foster interns.

“We recruit at Foster because the students we get there are successful at PepsiCo,” said Jim Richard, division vice president for PepsiCo QTG Sales, “and within 24 to 36 months we are moving them into management and into key account management roles.”

There are mountains of data that underscore the importance of university-level sales education in today’s global relationship marketplace, Rhodes explained.

“Knowledge and understanding of the functions of busi-ness—from accounting and finance, to marketing and management—and how they integrate into the selling process is vital for success in business-to-business sales,” he said. “Add to this the changing demands of technology, and the profession of sales is fast becoming a sophisticated profession.”

Rhodes is known around the Foster School as a consummate professional whose dedication to student success in the real world is unsurpassed.

Stories from former UW students about their journey to a sales certificate often begin with a phrase like this one from Khynna Beaton, a 2009 graduate: “I went to talk with Jack Rhodes about my future one day …”

Beaton, who grew up on an organic pear and apple farm in Lake Chelan, WA, said she landed her sales job with Sun Life Financial after undergoing a “pretty intense” interview process that she felt prepared for because of her time at Foster.

“They sent the candidates to Boston for an interview panel,” she said, eager to share how her experience at Foster gave her an advan-tage in a tough environment. “We had to interview with six or seven managers from across the country and then give a presentation. We were trying to sell the other candidates and panelists on why they should hire a certain person, and we had done this in our sales class. I had confidence and I knew how to give a convincing presentation, and I nailed it.”

That’s the difference that business leaders as well as graduates say the Sales Program at the Foster School is making in the arena of professional sales.

Sales Program gives Foster students substance as well as style

Considering average hiring and development costs of employees, a sales graduate can save a company over $100,000 in the first 18 months of being hired.HR CHALLY GROUP SURVEY REPORT

“Knowledge and under-standing of the functions of business—from accounting and finance, to marketing and management—and how they integrate into the selling process is vital for success in business-to-business sales.”

JACK RHODES Sales Program Director

FALL 2009 17

“In the past when a position opened up,” said Allen Pearcy, a sales manager at McKesson Pharmaceutical, “we could put a request out, get local talent or maybe promote from within, but now we’re looking for somebody who actually has the educational background.”

Because the majority of all college graduates go in to sales, those students should have a university-level sales education,

according to Jeanne Frawley, Director of the University Sales Education Founda-tion which promotes and researches sales education as well as the needs of corpora-tions.

“Ideally we’ll have sales taught in every university,” she said. “We’ll have it as a course available to every student and because they are trained in sales they

are going to better align themselves with the career choices avail-able to them.”

According to a survey by the HR Chally Group, a company dedicated to improving the sales profession with research and talent management, hiring managers reported in 2007 that sales program graduates, on average, ramped up on the job fifty percent faster than their non-sales educated peers.

“Considering average hiring and development costs of employees,” the Chally report said, “a sales graduate can save a company over $100,000 in the first 18 months of being hired.”

Rhodes adds that a university-level sales education creates a win, win, win environment for all stakeholders: The Foster School

is serving its student base, and connecting with the business community; business partners are developing a close affiliation with the Foster School through mentoring students, speaking in the classroom, and providing internship/practicum experiences, plus a recruiting opportunity with a sales-focused student popula-tion; and students are staring career opportunities in the face.

For example, consider Sean Jones, a Sales Program graduate who landed a job in Seattle with ONVIA, an internet-based provider of government contracting information. Jones said he landed his job because of the Foster Sales Program and said his sales education was a key reason why, in just three years, he has become a senior account manager and was Account Manager of the Year in 2008.

“It’s definitely given me a leg up on my peers who didn’t go through the Sales Program,” Jones said. “My performance has defi-nitely shown that, and I think that the fact that I’ve been the top sales person here since I started, I certainly owe a lot of that to the skills I learned in the Sales Program and the internship.”

But Rhodes and his peers—such as Frawley and Howard Stevens, founder of HR Chally—aren’t stopping there.

“Today we are in the process of making the Sales Program more self-sustaining for future generations,” Rhodes said. “In addition, our vision for the future is to incorporate the new land-scape of business.”

This means, he explained, staying ahead of technology changes affecting professional sales, utilizing effective tools like CRM, WEB EX, integrating web-based social networking and the massive amount of numerical data available to help forecast sales behavior.

“Companies look at the program that Jack Rhodes and the University of Washington have developed and rank it high,” said Stevens.

At the very least, Rhodes said he tells students (only half jokingly), “they may be able to get a date when they get done learning about sales, because selling today is rooted in the prin-ciple of both parties feeling good about themselves.” n

“We recruit at Foster because the students we get there are successful at PepsiCo and within 24 to 36 months we are moving them into management and into key account management roles.”

JIM RICHARD Division Vice President for PepsiCo QTG Sales

Sales Program graduates receive recognition for their completion of the program at the annual Business Partners appreciation breakfast.

18 FOSTER BUSINESS

OUT OF THE CLASSROOM, INTO THE BOARDROOM “I’m on the board.”

That phrase evokes leadership and responsibility, but what does it mean to an MBA student? Foster School students have a unique opportunity to experience not only what it means, but to utter those words as active participants in organizational gover-nance. It happens through a program called the Board Fellows, created by the Business and Economic Develop Center (BEDC)—one of Foster’s four specialized centers (see sidebar).

One of the first of its kind in the US, the BEDC Board Fellows Program places Foster School MBA students as non-voting members on non-profit boards of directors. Since the program began in 2000, nearly 150 Board Fellows and 40 organizations have participated.

In keeping with BEDC’s vision to make economic development a reality in communities across Washington, special emphasis is placed on economic, housing, and business development orga-nizations. There is also a strong partnership with agencies that provide social, health, and education services, and arts agencies that reach a diverse audience.

By design of the Board Fellows Program, these non-profit entities gain new perspectives on key operational issues, are able to connect with resources at the Foster School, and become key partici-pants in educating the next generation of business leaders. The MBA students, in turn, learn how to provide strategy and leader-ship from the position

of a board member. Students connect with local business leaders who serve on their board, are able to apply advanced learning in a real world setting, and make a valuable contribution to the Seattle community and economy at-large.

The Board Fellows experience is a picture perfect example of the triple bottom line equation: students win, non-profits win, and there is progress toward the greater needs of economic develop-ment in the community.

It has taken a strong commitment from community partners to make the program the decade-long success that it has been. “What got us over the top with this program was really when Wells Fargo came on as a partner about five or six years ago,” recalls BEDC director Michael Verchot. “Not only did they supply us with crucial funding that allowed us to focus on the program curriculum and outcomes, they’ve also worked closely with us to identify non-profit organizations that would be a good match for our students.”

So how does one become a Board Fellow? Students apply for one of 35 fellowship positions that are available for current MBA candidates. A team coordinates the process of vetting the applica-tions and determining preliminary matches between ongoing organizations and students so that everyone is able to reap the benefits of the program.

The matching process begins with students and organizations completing a pre-matching survey, which also serves as prepara-tion for a matching event held during Spring Quarter. Upon a successful match, students and organizations draft a memo of agreement that reflects what each hopes to get out of the Board Fellows Program during the coming year (learning goals, levels of attendance at meetings, etc). Organizations identify a Board “mentor” for the student; someone who will be available during the course of the year as a resource for the student when they have questions.

In the last two years there have been two significant improve-ments to the Board Fellows Program. Beginning in 2008, Neil McReynolds, the founder of a Seattle-based board governance consulting firm, has worked with the BEDC to develop a quarter-long course that each Fellow takes to learn the fundamentals of effective board leadership. Speakers ranging from the United Way’s Jon Fine to the Gates Foundation’s Martha Choe bring to life the lessons that McReynolds teaches in the classroom.

This year the program garnered attention from other schools on campus, resulting in a partnership with the Evans School of Public Affairs. Evans students seeking their Masters of Public Administra-tion (MPA) are eligible to become Board Fellows as well.

The Board Fellows experience is a picture perfect example of the triple bottom line equation: students win, non-profits win, and there is progress toward the greater needs of economic development in the community.

FALL 2009 19

CENTERS AT THE FOSTER SCHOOL

The four centers at the Foster School of Business drive innova-tive research, stimulate advancements for businesses and non-profits, and open doors for students to gain hands-on experience. The centers host a number of prestigious business plan and case competitions, provide scholarships and facilitate internships and connections to local business. If a core busi-ness curriculum represents the play-by-play of the Foster experience, centers provide the color commentary.

The Business and Economic Development Center (BEDC) focuses on economically distressed and emerging communi-ties, and minority businesses.

The Center for Innovation and Entrepreneurship (CIE) focuses on innovation, start-ups and entrepreneurial business.

The Global Business Center (GBC) focuses on international business and the global economy.

Center for Leadership and Strategic Thinking (CLST) focuses on pairing and growing leadership and strategic thinking at all levels of organizations with each and every organizational member.

One of the reasons MBA candidates cite for choosing Foster is the school’s commitment to breaking down the silos between the disciplines that comprise ‘the core’ of the MBA curriculum. Programs like the Board Fellows play a crucial role—just ask recent Fellow Ben Pierson (MBA 2009). “One of the things I learned early on as a Board Fellow is that there is no such thing as ‘financial strategy’ that works in isolation,” said Pierson, who served on the Habitat for Humanity Board. “I was on the finance committee, but for the issues facing Habitat, finance was really a tool for framing operational problems. When you’re an organization facing a tangle of economic challenges, finance is invaluable to breaking through the clutter and developing priorities.”

While students who have been Board Fellows are all guided by a handbook that lays out the seriousness of the commitment and responsibilities required by the program, they will tell you that it is an unbelievable chance to jump in and put your business acumen to the test. “I underestimated the size of the workload,” said Pierson. “But I went ‘all in’—how could I pass it up?—and I’m still heavily involved even though I’ve completed my Board Fellowship.”

“The Board Fellows Program has grown into a key offering for MBA students who want to take their leadership abilities to the next level,” said Verchot. n

OUT OF THE CLASSROOM, INTO THE BOARDROOM

FALL 2009 19

Outgoing Board Fellow, Ben Pierson (MBA 2009), shares his experience with MBA students about to embark on their fellowship.

20 FOSTER BUSINESS

Accrual RealitySoliman wins Notable Contributions to Accounting Literature AwardMark Soliman, the William A. Fowler Endowed Professor in Business at the Foster School, has won the American Accounting Association’s 2009 Notable Contributions to Accounting Literature Award.

The award recognizes the impact of Soliman’s paper, “Accrual reliability, earnings persistence and stock prices,” published in the Journal of Accounting and Economics in 2005. The study created a market-beating investment strategy based on a firm’s reporting of accruals as earnings on the balance sheet.

Scandalous beginningsThe notion began with WorldCom. After the long distance telephone provider declared bankruptcy amid scandal in 2002, Soli-man and his co-authors deconstructed the meltdown to learn how the company had manipulated its balance sheet to mask declining earnings.

“We expanded the WorldCom example to capture earnings manipulations in different forms on different parts of the balance sheet,” he says.

In particular, the researchers looked at accruals as a portion of earnings—and a predictor of future share prices. Some

companies pump up reporting of accruals when they want to inflate their earnings (and thus their stock price). But Soliman found that high rates of accruals are not conducive to persistence of earnings—steady, predictable increase in a firm’s revenue. “And the market likes persistent earnings,” he says.

How it worksTake two firms in the same industry. Each reports one dollar of earnings. For one firm, 10 cents of that dollar are in accruals. But for the other, 40 cents of that dollar are in accruals. “The market sees both firms as having a dollar of earnings,” Soliman

FACULTY

FALL 2009 21

explains. “But our research shows that the company with high accruals is going to have less than a dollar next year. You can’t pump up accounting forever. Eventually accruals unwind.”

And stock prices fall.From that kernel of informa-

tion grew a new, relatively simple investment strategy: analyze the reporting of accruals to predict the future direction of a firm’s stock price, then act accordingly. “So as an investor,” Soliman says, “you’d want to short the company with 40 cents in accruals and long the one with 10 cents in accruals. And if you do that, you make a lot of money.”

Living experimentBeating the market being the name of the game for legions of investors, Soliman’s extremely applicable study piqued the interest of many institu-tional investors who replicated its results and endorsed the strategy.

Soliman decided to try it out himself. He left the Stanford Univer-sity Graduate School of Business in 2006 to join Citadel Invest-ment Group as vice-president of accounting-based research. But he had no intention of staying.

“I just wanted to try it,” Soliman says. “I was academically curious: Does this strategy work? Is it really possible to use accounting infor-mation to beat the market? What prevents these strategies from being unwound by others? Turns out you can use accounting information to beat the market, with some caveats. Once I got that out of my system and figured out how it worked, I was ready to come back to academia.”

He did just that, joining the Foster School of Business in 2007. Today he directs the School’s CFO Forum and investigates somewhat less lucrative subjects, such as the choices that CFOs make to meet or beat earnings expectations. n

Government regulation. Few two-word phrases can incite such heated debate across this grand experiment in capitalism that is the United States of America, whether you’re talking the auto industry or health care, baseball or banking.

The question is: does government ever get it right? Can regulation be effective and maybe even beneficial?

“Most financial economists, myself included, would generally argue that it’s very difficult for the government to introduce a regula-tion—even with the best intentions—that gets it right and proves beneficial to the economy and society,” says Stephan Siegel, an assistant professor of finance at the Foster School.

To test this notion, Siegel, assistant professor Lance Young and doctoral student Katie Kong teamed with Jefferson Duarte of Rice University to investigate the results of the Sarbanes-Oxley Act of 2002 (“SOX,” to the finance world). A response to accounting scandals at Enron, WorldCom, and others, SOX was enacted with the intention of dissuading opportunistic behavior by managers without imposing net losses on investors.

Foreign perspectiveTo gauge the success of Sarbanes-Oxley at achieving both goals, the research team considered two key provisions: the prohibi-tion of self-dealing (specifically firms extending sweetheart loans to executives), and the increase in executive liability for the firm’s financial reporting.

Did SOX work? The researchers found that foreign firms were six percent less likely to list on an exchange in New York over London as a secondary market after Sarbanes-Oxley was implemented. This suggests that foreign executives, accustomed to laxer regulatory environments at home, were convinced that the act’s deterrents against self-dealing and fraudulent accounting had teeth. Sharp teeth.

Did SOX hurt the value of firms? The researchers studied investor activity in foreign firms on the day that they announced listing on a New York exchange. The prices of those

stocks, on aggregate, climbed two percent higher in the years after Sarbanes-Oxley than they did after the same announcement before Sarbanes-Oxley. This indicates that investors believed that SOX would also benefit the bottom line.

The view from homeTo measure investor response in the US, they applied empirical data to a provocative what-if scenario. Had Sarbanes-Oxley been implemented as a complete surprise to the market—rather than fomenting for months in response to the accounting scandals—the researchers estimate that a medium-sized US firm listed on the NYSE, NASDAQ or AMEX would have experienced an immediate price increase of between 5.7 and 14.5 percent.

Investors believed that Sarbanes-Oxley was good for their companies, despite—or perhaps because of—the pain it would impose upon management.

“We conclude that managers didn’t like SOX because they were constrained, which was the idea,” Siegel says. “But that’s easy. You can always enact regulations that people don’t like. The more important—and some-what surprising—finding is that shareholders seemed to like it.”

Effective, but optimal?For decades, the prevailing notion in finance has been of an efficient, omniscient market that is far more equipped to regulate itself than any government could be. But does the market always know best?

“We’re not suggesting that SOX was the best way to address this crisis, necessarily. Some would argue that if we had deregulated the markets, kept government rules out of the game and given shareholders more direct power to control management, we might have achieved a better outcome,” Siegel says.

“But from this study, we can say that what the US government did with Sarbanes-Oxley was not a disaster. It had the impact on managers that regulators’ intended. And shareholders did not feel it destroyed the value of their company.” n

SOX WORKS

At least one instance of regulatory legislation has done as intended

22 FOSTER BUSINESS

Shailendra Pratap Jain, an associate professor of marketing and international business at the Foster School, prepares for class in the manner that one would train for a wilderness adventure race, plan an over-the-top wedding, anticipate the arrival of a firstborn, or cram for an appearance on Jeopardy!

This is to say, excessively. Obsessively, even.

In advance of his MBA and Executive MBA core marketing strategy courses, Jain commits to memory not only every student’s name and face, but also their backgrounds and career aspirations. He pores over the latest research in marketing, scans the daily news for living cases to elucidate his lessons. He regularly benchmarks his syllabus content against other top schools and collaborates with colleagues to inte-grate his lectures with the other disciplines being taught in the core.

And once in class, he’s an academic action figure, lobbing cringe-worthy jokes to break the ice, inciting conversation, evoking student expertise. He runs. He jumps. He screams. “Many times I am drenched in sweat at the end of class,” Jain admits. “I’ll do whatever it takes—short of taking my clothes off—to get my students’ attention and keep them energized.”

Passion and prep pays offApparently, it works. Despite his deserved reputation as the most demanding profes-sor in the core, Jain was chosen by MBA students to receive the 2009 PACCAR Award for Excellence in Teaching.

The Foster School’s highest teaching honor comes with a $35,000 stipend from PACCAR Inc, a Seattle-based global technology leader in the capital goods and financial services markets. In this 12th year of the PACCAR Award, Jain is the first to win it in his first year on faculty.

He’s hardly a rookie, though. Jain joined

the Foster School after earning tenure at Indiana University’s Kelley School of Business. Prior to his academic career, he managed several advertising and marketing firms in India during the 1980s (and he continues to provide consulting to a broad portfolio of firms).

Professor of dreamsJain is deeply engaged in academic service. His research, which focuses on branding, consumer psychology, and advertising, has been published in leading journals and is widely cited.

But the PACCAR Award is all about performance in the classroom. In his debut at the Foster School, Jain made the MBA

core marketing course a career-defining experience for many. In nominating him for the award, one MBA student wrote, “the value of my MBA would have been justified by this class alone.” Another noted he had “never had a teacher who was so committed to teaching as (Jain) is.”

“I make a concerted effort to look at each student as a human being with dreams,” Jain says. “How can I use the next 100 minutes to take them a step closer to their dream? How can I add more value? That’s in my mind every class.

“Winning the PACCAR Award makes me even more determined to work harder toward this end.” n

Teaching ExcellenceJain wins PACCAR Award in his first year on Foster School faculty

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BRANDS AWAYEliminating a brand can sit well with consumers, if handled with care

The strategic benefits of brand elimina-tion have been exhaustively documented. But how do consumers react to the news?

A new study by Shailendra Pratap Jain, an associate professor of marketing at the Foster School, finds that consumers view the elimination of a weak brand as good for a company. He also finds that firms are better off publicly explaining their rationale for eliminating a strong brand, but better off leaving consumers to speculate on the reasons for discarding a weak brand. A final study suggests that shedding a weak brand is seen as positive by both loyal and non-loyal consumers. But eliminate a strong brand, and you’ll have some trouble with loyalists.

“Before eliminating a brand, you must have a very clear handle on your brand’s strength,” Jain says. “It’s not the firm’s perception but the customer’s perception of the brand that matters.

“If you’re GM eliminating a brand like Saturn that people perceive as weak, it’s probably going to be viewed as a posi-tive move. But if you’re GE eliminating your major appliances brand that most of the world thinks is strong and you don’t explain why, you might have a PR problem with loyal customers.”

Jain’s paper is published in the Journal of Consumer Psychology. n

POWER TO THE PEOPLECustomer choice of product information yields online sales

Internet marketing—freed from the con-straints of print, radio or video—means an unrestricted opportunity to inundate the consumer with product features… right? Actually, offering a clean menu of hyperlinked product information is a much more effective Web strategy, ac-cording to new research by Ann Schloss-er, an associate professor of marketing and Evert McCabe Faculty Fellow at the Foster School.

Schlosser’s study demonstrates that giving customers a sense of choice over the product information they view on a Web site can result in a more posi-tive view of the company. The resulting goodwill increases their likelihood of purchasing the product, even in the face of subsequent negative information, such as a bad review.

Calling attention to this offering of customer choice can also be good for business—but only if retailers hit the right note. “If the online choice is too subtle, it doesn’t have the immediate effect of earning favorable feelings about the company,” Schlosser says. “If it’s too obvious that a company is offering customers this kind of choice as a persuasive tactic, it can backfire.”

The study is published in the Journal of Consumer Psychology. n

EARLY V. LATEMarket latecomers must add relevant, unique value to beat pioneer brands

What is it that allows some brands to succeed and some to fail? Why is it sometimes better to be first and other times better to reach the market later?

According to a study by Marcus Cunha, Jr., an associate professor of marketing at the Foster School, consumers more easily associate multiple attributes to pioneer brands than to follower brands. They also tend to asso-ciate attributes common to both brands more to the first brand they encounter, and unique attributes with later arriving brands.

So late entrants into a market need to do what the early leader does best, but also offer a distinctive attribute that consumers value more than the attri-bute shared by the pioneer or other late brands.

On the other hand, despite the influx of competition boasting new-and-improved functionality, pioneering brands should continue to focus on the common attribute when consumers value it highly. “Contrary to intuition,” Cunha says, “pioneer brands can defend their turf by communicating important attributes that other brands also offer instead of offering new features.”

The study is published in the Journal of Consumer Research. n

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24 FOSTER BUSINESS

ADVENTURES IN IT

Novel case study series in IT management now a novel

Jim Barton’s reach is expand-ing. The fictional—and acciden-tal—CIO/hero of Richard Nolan’s innovative IT management case series has inspired two academic papers and a hardcover available on Amazon.com and in bookstores nationwide.

Nolan, the Philip M. Condit Endowed Chair in Business Administration at the Foster School, teamed up with Rob Austin and Shannon O’Donnell to create a suite of serialized chapter-cases that invites a student to walk a year in the shoes of Barton as he learns, under considerable duress, to be an effective leader in the most volatile job in business.

As a teaching tool, the series has been successfully test-marketed to undergrads, MBAs and execu-tives. Nolan has recently published the results of this experiment in modernizing the classroom experience for “digital natives” in the Academy of Management Journal and Communications of the Association for Information Systems. For the non-academic audience, Harvard Business Press has published the series as “The Adventures of an IT Leader,” replete with illustrations evoking a graphic novel.

Nolan and his co-authors are currently developing a sequel that concerns the 21st century CEO. In this forthcoming volume, Barton the protagonist will be catapulted to the top job at an aerospace firm in crisis. n

ONLINE MEA CULPASAnnouncing a restatement via Internet video can bolster investor trust

Announcing a restatement—correcting a previously issued financial statement—is known to destroy trust in a firm’s financial reporting, and can negatively influence investors. But the use of online video to convey the bad news can cushion the blow, provided the firm takes full respon-sibility for the error. This is according to new research by Frank Hodge, the Herbert O. Whitten Professor of Accounting, and Lisa Sedor, an assistant professor of ac-counting at the Foster School.

The study finds that when a CEO assumes full responsibility for a restatement, people who view the announcement via online video make larger investments in the firm than do people viewing the announcement via online text.

However, when the same CEO assumes shared responsibility for the restatement with industry peers, the online announce-ment does not limit damage to investor trust.

“Our evidence is important given both the dramatic increase in the number of restatements over time and the Secu-rity and Exchange Commission’s recent emphasis on transitioning to Internet-based disclosures,” the authors write. n

FINDING EYEBALLSStrategic social networking is critical to building online content popularity

Why do some online videos become viral sensations while most languish in obscu-rity? Yong Tan, an associate professor of information systems and Evert McCabe Faculty Fellow at the Foster School, has begun a series of studies investigating the effect of social networks on the diffusion of Internet content.

The first charts the role of social networks in the rise and fall of videos posted on YouTube. YouTube allows social networking via communities of “subscribers,” interested in a certain style of video, and “friends,” based on personal or content affinity. Tan and his Foster co-authors—assistant professor Anjana Susarla and doctoral student Jeong-Ha Oh—found that subscribers are a video’s initial viewers and launch its rise. Once it’s out there, friends sustain a video’s online viewership. And the more connected the subscribers, friends, and content creators, the faster and broader the video’s diffusion.

The bottom line: advertisers and media companies in the Internet age should pay close attention to key consumers of information. Building communities of well-connected people is crucial to building “word of Web” that can break through the imbroglio of online content.

“As we move toward Web 2.0, every-thing is becoming a conversation,” Tan says. “Companies need to pay attention to this ongoing conversation with and among users.” n

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FALL 2009 25

STUDENTS

When Eli Zackheim decided to leave profes-sional golf in 2008, after seven years and as many PGA tournaments, he joined the Foster School’s Full-time MBA Program and has since rediscovered his passion for salmon, the environment, and the economic health of Native American fisheries.

Zackheim’s journey from pro-golf to helping four Northwest tribes plan the future of a new salmon fish processing plant started in June with an internship created by the Business and Economic Development Center at Foster. Through the BEDC internship program, Zackheim worked on a feasibility study to help the tribes realize the economic potential of their new facility in East White Salmon, WA.

The salmon runs of the Columbia River

had been a subject of great interest for Zackheim through his high school years in Portland, OR, and at Colgate Univer-sity, where he majored in environmental economics.

“And when I saw that this internship had to do with tribes and their economic interests and that it had a financial focus, it suited a lot of the little pieces I was looking for in my career,” he said.

The Columbia River Inter-Tribal Fish Commission—created by the Confederated Tribes of the Umatilla Tribe, Confederated Tribes of the Warm Springs Tribe, the Nez Perce Tribe and Yakama Nation—has a variety of options for how the operation of the plant will benefit the tribes economi-cally and socially.

“My work,” said the second-year Foster MBA student, will help the tribes under-stand “what this plant can and cannot do.”

And, while his work is a part of the tribes’ effort to build up the economic value of their commercial treaty catch, Zackheim has also been gaining “a great under-standing of the strategic considerations” for every number he puts on his feasibility spread sheets.

“I think I’m getting an equally good business experience,” he said of his intern-ship with the tribes in rural Washington, “and developing skills to a level compa-rable to anywhere, and at the same time providing a service to some communities that are a little bit more in need than most large businesses.” n

Feasibility of Salmon

Eli Zackheim’s Foster BEDC internship leads the former pro golfer back to his roots

26 FOSTER BUSINESS

ALUMNI

It has the bones of any corner grocery store: big picture window, orderly displays, humming freezer cases. Only Eat Local, in Seattle’s Queen Anne neighborhood, is not just any small grocery.

Greg Conner’s (BA 1995) labor of love is stocked with artful meals house-made from seasonal, organic ingredients bought directly from local farms, giving customers a compact culinary tour of Washington’s bounty. Manny’s Shepherd’s Pie features pasture-fed beef and lamb from Walla Walla’s Thundering Hooves Farm simmered in Georgetown Brewery’s finest pale ale. Tagliatelle pasta is handmade from Winthrop’s organic Bluebird Grain and paired with sustainably caught salmon from Seattle’s Loki Fish Company. Raspberries from Hayton Farms stud the seasonal fruit crisp. Yakima grapes star in Eat Local’s own Malbec, Pinot Gris, and Syrah. Shortbread cookies feature hazelnuts from Holmquist Orchards in Lynden. Crisp-bread pizzas deliver Golden Glen Creamery cheeses

from Bow, wild mushrooms from Foraged & Found Edibles, Salumi salami, and a cornucopia of veggies from Tiny’s Organics in Wenatchee.

Even the company logo, an emotive papercut of generations gathered around the table, is the elegant work of Olympia artist Nikki McClure. “For us, making food is an art,” Conner says. “Since our philos-ophy is to support local farms, we thought we should support local artists, too.”

Back to earthEat Local may be a commercial expres-sion of the growing “locavore” movement that has drawn energy from the writings of Michael Pollan, Eric Schlosser, Barbara Kingsolver, Alice Waters, and Carlo Petrini, and gains momentum with every new farmer’s market, and each incident of E.coli, salmonella or mad cow in the industrial food supply.

But Conner started his business in 2006, like many entrepreneurial ventures, as a means to fill a personal need.

When he was a boy, eating local wasn’t some lofty ethic. It was common sense. Spending summers at his grandparents’ orchard in Washington’s Wenatchee valley, he was acutely aware of his food’s prov-enance.

But life grew more complicated. After earning his business degree in 1995, Conner started his career at a sprint. He founded an Internet consulting business, sold it, then traveled the world for a year, at one point working with Mother Teresa in Calcutta. He returned to the US, worked for a finance consulting company, then joined a European bank to launch its private equity operation in Argentina. Back in Seattle he worked for an aerospace consulting firm, eventually specializing in sustainable practices.

Ironically, his personal life had become far from sustainable. “It really hit home when I was in consulting,” he says. “I was working long hours and I couldn’t find prepared meals that weren’t full of preser-

Bounty Hunter

At Greg Conner’s Eat Local, high ideals never tasted so good

FALL 2009 27

vatives and additives and fillers. I had no idea where the ingredients were coming from.

“I saw the need in my own life for something like Eat Local. And it made sense that this was some-thing other people wanted, too.”

A growing concernAfter leaving his consulting gig, Conner assessed the market, found a suitable location, recruited expert cooks and formed symbiotic rela-tionships with local farmers.

“By buying locally we ensure the freshest ingredients for our customers, and I think you can taste it. We reduce our carbon footprint as we reduce the distance that food travels,” he says. “And most importantly, we keep money in the local economy. We’re providing jobs where we live.”

He continues to do so, even through the Great Recession, a withering season for retailers. “The economy has certainly affected us,” he says. “But we’ve done well by delivering value—real food over fake food—to each customer, whether it’s their wedding, a dinner party, or just dinner with their family.”

So much so that Conner will soon open a second Eat Local near Burien’s Town Square development. The new store is triple the size of the original, with an open kitchen to allow customers to watch the chefs work.

He has a growth plan for Eat Local, but frankly would rather talk taste than strategy, customers than sales.

“It’s so rewarding,” he says. “I’m not sure about other businesses, but when my customers come in they’re really happy. Eating local, knowing where your food comes from, reducing your carbon footprint—it’s all important. But when all is said and done, it has to be delicious food. And it is.” n

Lots of students are inspired by campus speakers. Some are even motivated.

Samantha Rayner (BA 2009) was trans-formed. She came to the Foster School four years ago with hopes to someday run her own fashion line. And then she caught a moving lecture by Muhammed Yunus, the Nobel Peace Prize winning microfinance pioneer. “This was something meaningful to do with my business degree,” she says.

But rather than apprentice in traditional banking first, Rayner wanted in on the front lines of microcredit. ASAP.

Fashion to financeShe began studying microfinance at Foster and connected with the Ghanaian village of Atorkor through a Seattle non-profit called Village Volunteers. She raised a seed fund for a pilot project, partnered with the develop-ment foundation founded by Atorkor’s chief, and arrived in Ghana last summer with $3,000 and an open mind.

“I quickly learned that it’s not enough just to provide a loan,” she says. “You have to educate and connect people to larger markets, teach them how to form coopera-tives to lower costs.”

So Rayner developed an innovative model. She trained trusted community leaders to teach business management classes and mentor groups of like entrepre-neurs, who organized into co-ops. Then she administered 30 small loans—from $50 to $400—to Atorkor’s hard-working poor: women hand-weaving batik textiles, setting up mobile convenience shops, delivering breakfast to fishermen.

Bright futureRayner couldn’t leave it at a summer project. “After seeing how much I could accomplish in only two months and seeing the impact almost immediately,” she says. “I decided to put more energy into this and see where it could go.”

Financed by a Mary Gates Scholarship her senior year, Rayner turned her pilot program into Lumana Credit. She entered the UW Global Social Entrepreneurship Competition,

founded the Social Entrepreneurship Club, connected with microfinance organizations, recruited volunteers. An A-team of recent Foster grads—including Karin Avellaneda (BA 2009), Eric Appesland (BA 2009), Avi Zellman (BA 2009), PJ LaFemina (BA 2009), and Alexandra Berg (BA 2009)—now power Lumana as a second job.

They helped Rayner raise $20,000 and launch Lumana’s second phase this summer: broadening the education and mentoring, and expanding the client base to 200. She’s building to grow, but not too fast. “We don’t think putting out as many loans as possible is proof of our success,” she says. “It’s the impact with each client and how we are building on that appropriately.”

Not just a job, a missionRayner, who spent her teen years managing the family catering business in Spokane, was probably never destined to start at the bot-tom of the corporate ladder. “I love being so connected with the direct impact of my work,” she says.

At Lumana, that means clients like Ellen Adjorlolo, a single mother of five who has been able to expand her unpredictable sewing business, and Justene Kudese, who was able to rebuild her home after a storm with savings she had never known before.

“Once I established a relationship with the community, I had a really hard time seeing myself doing anything else,” Rayner says. “I decided I would not just start a project, I would make it work.” n

Micro Lender, Macro ImpactSamatha Rayner is improving lives in Ghana

Samantha Rayner (second from left) with Foster School Lumana volunteers in Ghana.

28 FOSTER BUSINESS

ALUMNI

Life at C-LevelDorrit Bern learned that the unexpected is just your next lesson…

Dorrit Bern, Foster’s 2009-10 Edward V. Fritzky Chair in Leadership, was most recently CEO of Charm-ing Shoppes, Inc, a multi-channel specialty women’s apparel retailer. During her tenure that company’s revenues tripled from $1B (1995) to $3B (2006).

What’s the hardest thing about being at the helm of a $3B company?

Running a public company, in general, makes for an interesting schedule: you get really booked up by your team, your board and Wall Street. It’s entirely appropriate—and yet, I fear that American business is

increasingly bogged down by the wrong things, which puts us at risk of falling behind. The other big risk, as CEO, is not having time to ask the crucial 2nd and 3rd questions when considering a situation or new direction. With a global company, you also have lots of travel, which can lead to unexpected adventures and lessons.

Can you describe one or two of your adventures amidst business travel?

Well, as a vice-president at Sears, Roebuck & Co, I was almost jailed in China for tell-ing the minister of trade that the Craftsman brand shouldn’t be manufactured from prisons. The CEO of Sears instructed me to do this, not realizing how dangerous it would be for an American—female,

no less—to make demands of a high- ranking Chinese official.

Of more import, I was caught in a hurricane that hit the Dominican Republic while I was visiting our factory there. Water and sanitation problems were the biggest impact of the storm. I flew my two oldest sons, a freshman and a sophomore in high school at the time, to the DR to help. They returned home and produced a video and brochure to raise money for disaster relief. They did this all on their own, very grass-roots, and I think they raised around $25K. An amazing learning experience for them!

What are some of the lessons you learned about global business?

Within the world at-large, the human condition can be quite appalling—an easy thing to forget if you’re born and raised in the US and confine your travel to the West. It probably sounds cliché, but my biggest takeaway is that people are pretty much the same everywhere. They all want the ability to work, resources to take care of their families, and opportunities. It was very heartening to watch the standards of living rise in areas where we built factories and created jobs.

You’ve held top-level leadership positions for the past 20+ years. How did you get started?

I was a buyer at The Bon Marche, where my mother had paved the way by becoming one of the first female buyers for The Bon. She was definitely a role model, and I was fortunate to be exposed to the industry at a young age. Until my mom’s arrival at The Bon, men had been in charge of buying everything from dresses to intimate apparel. I realized early on in my career that I had good buying instincts, which served me very well.

FALL 2009 29

What is your take on business education?

I’m a graduate of the Foster School of Business (BA 1972)—then the UW Busi-ness School. But I think a good business education needs to start much earlier than college. When my boys—I have three sons—were growing up, I wanted to make sure they met diverse groups of people. I’m a big supporter of public schools—I think half the experience of education is meeting people, understand-ing them, and building a perspective that doesn’t rely on assumptions.

What are your early thoughts on being Foster’s Edward V. Fritzky Visiting Chair in Leadership?

I’m thrilled! When the dean called me about it, my first reaction was that it

sounded like a lot of fun. Having run a public company for a number of years, I feel like I can add value in helping students identify some of the minefields that are out there. I want to be part of the classroom experience and make it okay for students to ask me anything—there really are no dumb questions. What I’ve learned is that leaders have to set the vision and drag their organiza-tions along—you need to be strong and persuasive to move your organization forward. I’d be very happy knowing that a student might be able to look back and say, “Dorrit gave me a heads up on this; I’m feeling like I’m prepared to handle it.” A lot of getting started in higher lead-ership involves knowing what to expect.

What advice would you give to C-level aspirants?

Have the wherewithal to slow down, get as many facts as you can, and always make sure you really know your customer. Assumptions about who you think your customer is—or what she wants—can be disastrous. n

“Have the wherewithal to slow down, get as many facts as you can, and always make sure you really know your customer. Assumptions about who you think your customer is—or what she wants—can be disastrous.”

“What I’ve learned is that leaders have to set the vision and drag their organizations along—you need to be strong and persuasive to move your organiza-tion forward.”

EVENTS CALENDAR

November 2009

5 Business Leadership Celebration: Keynote – Marilyn Carlson NelsonSee page 4 for details

12MBA Alumni Receptions in New York and San FranciscoSee page 9 for details

16 IKEA International Case Competition

16-20 Global Biz Week Entrepreneur Week UW

December 2009

10 UW Minority Business of the Year Awards Keynote – William Ayer

March 2010

1-5 Global Social Entrepreneurship Competition

3 Leaders to Legends Breakfast Lecture: Tim Boyle, Columbia Sportswear Company

April 2010

1 UW Environmental Innovation Challenge

13-18 Global Business Case Competition

Visit foster.washington.edu/alumni for alumni opportunities.

Life at C-LevelDorrit Bern learned that the unexpected is just your next lesson…

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ALUMNI

Dawg on Wall Street

With roots in the Foster School, Peter Majar exercises the power of strategic thinking in the high-stakes world of mergers and acquisitions in New York

Peter Majar (BA 1987) talks about com-plex mergers and acquisitions of financial technology firms with the animation and specificity of a professional sports coach discussing the strengths and strategies that produced a winning team.

It’s a taste for Wall Street-level finance and deal-making that Majar—who currently serves on the Foster School Advisory Board and was a founding organizer of the New York City alumni club “Dawgs on Wall Street”—acquired as an undergraduate in the University of Washington’s Business School.

That early interest in the stock market and “fascination with the capital markets” led to Freeman & Co. where Majar, as managing director and partner, advises world-class financial technology compa-nies and financial service firms on their merger and acquisition needs and/or raising capital.

“I’m telling them,” Majar said in describing his role when advising a company to purchase another, “Look, I understand what you have, but let’s talk strategically about what you don’t have. I

know the universe of people who I think might fit that.”

Most recently, a deal announced on Aug. 27 in which Instinet Inc. acquired TORC Financial LLC, illustrates Majar’s ability to help a company sell itself to another in order to create a richer organization.

Both companies were involved in elec-tronic trading, with Instinet being an early pioneer that nonetheless “didn’t have a good front-end system for options,” Majar explained. So, Instinet was at a juncture: It could “expand internally, grow organically, or it can look to acquire a solution that exists in the market place already,” Majar said.

TORC, which Majar was representing, had also hit a juncture in its evolution: To reach the next level of client and customer penetration, do we need other products and services we can’t get to? If so, is it better for us to sell?

Merger was the best answer for both firms: “It ends up being a terrific solution for them because now you can offer that dream product you would have always liked to be able to offer.”

In many ways, Majar’s career is also a dream product of his education at UW. And in recognition of the role the university played his life, Majar has become increas-ingly involved with connecting alumni who are “Wall Street-oriented professionals” with the UW and in helping to guide the Foster School in tackling the “two key areas” of international business education and interdisciplinary studies.

While focused on his work in a key business that is on the leading edge of the economic recovery, Majar said he neverthe-less wanted to “step back and reconnect with some things that had been important

in my life historically and to help UW as it moves forward too.”

And, as a “big sports fanatic,” Majar said he is looking forward to the next season of Husky sports and the rise of the football team in particular.

In the meantime, it’s back to building a winning season in the often arcane world of mergers and acquisitions among financial technology and financial service companies.

“We’re certainly seeing signs of recovery on the frontlines,” he said. “But will it be sustained or will there be some systematic shocks that knock it down?”

As he pondered that question while walking from his office in Manhattan to his home a few blocks away, Majar shifted into a story of a client bursting out in a meeting that the deal had become “outrageous! It’s in bad faith! We’re out of here!” And then moments later in the hallway, the owner asked Majar if he couldn’t just go back in and smooth things out.

Majar then erupted into one of his characteristic robust laughs that seems to emanate from a robust sense of goodwill and fortitude.

“I said, ‘I thought that we had just agreed that that is the worst strategy possible!’ ”

But, he added with equanimity, “in a dynamic situation, you can plan, have contingency plans, but sometimes you have to realize you’re dealing with humans and emotions. Sometimes it’s all outside of the box and sometimes you just have to be able to adjust and go with it.” n

FALL 2009 31

Michel Alvarez (MBA 2004) gently places a small rectangle of white material that bears some resemblance to tightly woven gauze in the palm of his hand. This, he explains, is what drew him to come on board medical technology start-up, Healionics, in 2007. To its inventors at the UW Engineered Bioma-terials (UWEB) group, the material captures “the sweet spot” at which pore size and geometry allow biomaterial to promote the acceptance of biomedical devices within the body. When Alvarez explains the concept to investors, he calls it the “Goldilocks Effect.” It turns out that Healionics founders Dr. Buddy Ratner and Dr. Andrew Marshall got it “just right.”

A passionate entrepreneur, Michel Alvarez joined Healionics as co-Founder, Chief Operating Officer, and VP of business development. He became the company’s CEO this year, and is leading the charge amid a 12-month plan that includes closing series B funding, testing a human application of the STAR® (Star Templated Angiogenic Regeneration) material, and pursuing grants that support new applica-tions of the technology.

UW Born, Foster LedFoster grad Michel Alvarez is at the helm of a UW-spawned med-tech company

Alvarez sees a business model for STAR biomaterial that is akin to what W.L. Gore & Associates did with GORE-TEX®. While most of us appreciate GORE-TEX as a foil to rainy Seattle weather, it has broad uses in medical technology, both as a device component and in stand-alone applications. STAR technology has even broader market potential. “The magic of STAR is embedded in the geometry, not the ingredients in the material,” said Alvarez. “Healionics can supply the membrane for the ‘next genera-tion’ glucose sensor, or manufacture the finished device for a glaucoma implant. We can make our STAR scaffolds out of different materials or substrates that are degradable or non-degradable.”

There aren’t too many medical tech-nology companies that have a product on the market only two years after starting-up, and the market is clearly impressed. “We’ve signed agreements with more than 20 companies that range from large multi-nationals to boutique start-ups,” said Alvarez. “We’re also ramping up our grant application engine, and we’ve been awarded three grants so far this year

together with our UW research partners—that’s up from just one award last year.”

Healionics’ technology is a UW success story that blends innovative doctors at the UWEB group with strong leadership and business acumen from the Foster School. “What I’m doing with Healionics is exactly the kind of thing that Foster supports and encourages in its entrepreneurial minded students,” said Alvarez. “You select UW research, license the IP and bring in a strong business team, and voila, you’ve got a great start-up.”

Not surprisingly, Foster’s Center for Innovation and Entrepreneurship (CIE) was a strong influence on Alvarez during his MBA education; he pursued and received a Certificate in Entrepreneurship from the center. “CIE gives Foster students a huge advantage relative to other business schools, where innovation often becomes diffuse across campus,” said Alvarez. “CIE is housed in the business school, but the Center has deep roots to medicine, science, engineering, and information technology.”

Pursuing his MBA as an already seasoned technologist and entrepreneur, Alvarez was impressed by his transforma-tive experiences at Foster. He recalls an entrepreneurial business class where he learned how to value and buy an existing business and a host of professors who had the ability to make theory jump off the page in ways that truly helped him to think differently, especially in the broader areas of finance and economics.

Looking back, Alvarez remains bullish about the value of an MBA in mid-career stride. Even, and perhaps especially, when that career involves the level of assumption bashing and rule questioning that go with being an entrepreneur. But guys like Alvarez don’t have much time to look back.

“I think about what lies ahead for Healionics,” said Alvarez, “and I see the pieces of our business model working in synchronicity. This is hugely rewarding to me—but do you know what the most exciting part of the job is? Making deals, I really love making deals.” And with that, he finishes his coffee and heads for Healionics headquarters in Redmond. n

32 FOSTER BUSINESS

Topping Out

FOSTER FUTURE

In the surface lot where one short year ago a purple Kenworth truck and a dozen golden shovels marked the groundbreaking of PACCAR Hall, passers-by today will find the nearly completed exterior of a 135,000 square foot state-of-the-art learning facility. October 1 brought Sellen Construction’s “topping out” ceremony, a European tradition dating back for generations. Workers signed the white steel beam for posterity before it was lifted into place on PACCAR Hall’s fifth floor penthouse.

Speaking at the event were Sellen President and UW Alumnus Scott Redman along with Foster School Dean Jim Jiambalvo. Both were thankful for the skill and safety of the work to date. They also talked about the amazing contrast to neighboring Balmer Hall, which—legislature willing—is in its final year of service to the University. n

Dean Jim Jiambalvo

Scott Redman

Foster EXECUTIVE EDUCATION creates and delivers programs that support individuals and businesses in achieving their strategic goals amidst a dynamic, knowledge-driven and global economy. Our programs are at the intersection of cutting-edge research and real-world experience—offering lifelong knowledge you can apply tomorrow.

Programs designed to emphasize strategic thinking and leadership include:

Global Strategy and Leadership (10 days)

Leadership that Shapes the Future (3 days)

Executive Development Program (9 months, Monday evenings)

Finance and Accounting for Non-Financial Executives (3 days)

Strategies for Successful Negotiations (2 days)

Executive Education at the Foster School can help position you and your organization for success.

For more information, visit www.foster.washington.edu/execed or call 206-543-8560.

An Executive Education student much like yourself.

Think dif ferently.Make a dif ference.

It ’s the Washington Way

Who was it that said,“Leaders never stop learning?”

NONPROFIT ORGANIZATION

U.S. POSTAGE

PAIDSEATTLE, WA

PERMIT NO. 62

ADVANCEMENT

BOX 353200

SEATTLE, WA 98195-3200

FALL 2009

FOSTER