Category Archives: Faculty Perspectives

Leadership in Peru

Guest post by Bruce Avolio, Executive Director of the Center for Leadership and Strategic Thinking and Marion B. Ingersoll Professor of Management

Recently on a trip to the Ivey School of Business in London, Ontario, I was asked, “how does one lead when they are not sure where they are going?” Many might say, just watch our U.S. politicians if you want to see how! More seriously, the more dynamic environments become, the more likely leaders are going to need to lead not knowing exactly where they are headed. As I thought about this question I went back to a recent trip I had taken to Peru. Peru is one of those South American economies that is shedding its past – recent past in terms of military dictatorships – and growing at a healthy clip, at least for the more educated class in places like Lima. Peru has a rich history that dates back well before many of the world’s other well-known societies, starting with the Incas which are considered one of the modern ‘older’ civilizations. There are two civilizations that pre-dated the Incas going back at least 5,000 years.

As Peru accumulates wealth, it is now able to invest in discovering its past. It is not an overstatement to say the Inca culture, traditions, food and history are becoming an economic force in Peru. Just see Machu Picchu and you will understand what I mean. This is one of the most amazing cities built by the Incas high atop a mountain that is one of the true wonders of the world. Going to Peru and its many historical Inca sites, taught me a lot about how advanced this society was. For example, the Incas knew which foods to eat that had low cholesterol, they knew how to build structures to withstand earthquakes, and they knew how to do brain surgery. And the answer to that question posed to me in London, Ontario lies in how the Incas built buildings. They built buildings by seamlessly integrating them into the rock upon which they were built. The Incas saw mountains as sacred. Rather than dig a big hole and then build the foundation, they built the building into the existing foundation, which took more time and care, but as we can see, lasted longer. This was the case for all buildings throughout Peru, ranging from temples to residences for Inca workers.

How does the Inca foundations help me answer the Ivey question? One must build an authentic foundation for leadership on which the rest of the structure can be created. We see organizations that have no ‘firm or genuine’ foundation, no core values and therefore no solid basis to lead into an unknown future. Many times we have to go backwards in order to move forwards and answer where we are going, which in this case is into the unknown. And I promise I will avoid writing a pop book “7 glorious Inca Principles of Effective Leadership.”

Followership impacts leadership

Gerard Seijts interviewed Bruce Avolio, professor of management and executive director of the Center for Leadership and Strategic Thinking at the Foster School, about his research on leadership. Professor Seijts is executive director of the Institute for Leadership at the Ivey School of Business. In the interview he asked Prof. Avolio what are the big leadership questions that will advance the field.

According to Prof. Avolio, one major question is, “Is the source of leadership followership? If so, in what way?” He goes on to say this isn’t a topic we have delved into because we assume the source of leadership is the leader. But a key discovery in Prof. Avolio’s research is that followers who have a sense of ownership in their work, don’t let their leaders go off the cliff or in other words, make poor decisions.

He also said he can tell a lot about an organization’s leaders without ever meeting its leaders. This is because followers are a reflection of what they see in their leaders. “If followers are independent, willing to challenge, feel safe to do so, own what they are charged with, and feel a deep sense of making it right, they change the leadership lens of the organization.”

Another takeaway from this interview is Prof. Avolio’s finding that financial analysts consider a firm’s leadership when valuing a firm. They can discount a firm anywhere from 5% to 20% based on their perceptions of its leadership.

Watch the full interview.

Emer Dooley TEDx video: Entrepreneurship education – an oxymoron?

University of Washington Foster School of Business lecturer and alumna Emer Dooley (MBA 1992, PhD 2000) recently gave a TEDx lecture on entrepreneurship. Her topic? Top five skills we can learn from entrepreneurs who build successful, enduring companies.

“That great business philosopher Confucius said, two thousand years ago, ‘What I hear, I forget. What I see, I remember. But what I do, I learn.’ And that’s what entrepreneurship education is all about,” says Dooley.

Watch the 17-minute video and catch lecture highlights below.

Top 5 skills  of a successful entrepreneur:

  1. Do something. Try something. Many successful entrepreneurs have been fired or let go from a former employer and have to act quickly to pay bills. So they start a business without having written a formal business plan, but have a sketch on the back of a napkin.
  2. Beg, borrow or convince people to give or loan resources. Entrepreneurs must figure out how to get resources, assistance and seed funding.
  3. Embrace surprise. Juggle the unexpected and shift gears quickly by seizing opportunities.
  4. Minimize the downside of risks. Great entrepreneurs do not take huge risks. They reside in a state of “heads I win, tails I don’t lose too much” in starting a new business.
  5. Be an effectual thinker. Through entrepreneurial education, emerging entrepreneurs learn to realize they are the pilot-in-command. They are running and starting a business and by trying a business idea out, they may fail. But they will learn from mistakes and can continue moving forward.

More entrepreneurship advice, insights from Emer Dooley’s TEDx lecture:

“Entrepreneurial thinking is a way of looking at and thinking about problems, but very much about doing something about problems.

“There’s this myth about entrepreneurship. Who pops into your brain? It’s Gates or Bezos or Richard Branson. But there is no one type of person that’s an entrepreneur. When I think about the characteristics of an entrepreneur, they can be incredibly gregarious. They can be really shy. They can be these big, big picture thinkers or they can be these obsessive control freaks.

“If you’re a loud-mouth like Ted Turner, it’s natural. You’ll start CNN. If you’re a geek and you’re afraid to approach girls directly, what are you going to do? Start Facebook. If the only way to be an entrepreneur was to be born one, Colonel Sanders would never have started Kentucky Fried Chicken when he was in his 60s and on Social Security.

“There’s the strategic approach or the entrepreneurial or affectual approach. An affectual entrepreneur is someone who thinks they can affect their own world. What can I do with the resources I have at hand? Not, what is the end goal and how do I get there?”

After 11 years of teaching entrepreneurship to UW business, engineering and computer science students, Emer Dooley now serves as strategic planner, board member and faculty advisor for the UW Center for Innovation and Entrepreneurship.

Marketing failure: iPhone in India

Guest post by Shailendra Jain, associate professor of marketing, UW Foster School of Business

iphoneApple has been called “the most admired company in the world.” There are some good reasons for this. Apple is very innovative, very cool, very personality-oriented.

But while Apple’s iPhone has achieved landmark success in the United States and redefined the smart phone category, it has so far struggled in two of the world’s largest markets. The iPhone has yet to create much interest in India and is, at best, a fledgling brand in China.

It has not met the success in these markets that Apple expected for a variety of reasons.

First is a technology issue. In India, the market I’m most familiar with, the iPhone has compatibility issues. That’s an amazing thing to ignore. Your product has to be aligned with the context in which you are marketing it. Apple, reportedly, is in talks with carriers in China and India to overcome this compatibility issue and is believed to be launching an iPhone with CDMA technology, which is compatible with Chinese and Indian telecom standards. It will be interesting to see whether this enables Apple to capture a larger chunk of these two enormous markets.

Second is a pricing issue. At its introduction, an iPhone cost about the same price in India as it did in the U.S. (about $700). But the way consumers process price information is interesting. In India, many potential customers reasoned that for the price of three iPhones they could buy a Nano car. And they were not sure if this was a good trade off. For these consumers, Apple may have gotten the price wrong. They may have ignored the how people in these countries process price information.

A third reason is that people in India are used to an unlocked phone. Apple does not want people to buy unlocked versions of its phone. But the moment there is a gray market where people can buy another compatible version of the iPhone, Apple will be challenged.

A fourth reason—and this is personal speculation—is a misalignment of “softer” brand attributes. What Apple as a brand means in the U.S. is very different from what Apple means in Asian countries. It was born in the U.S. and has produced a long line of successful “i” gadgets—iMac, iPod, iPad—whose branding is rooted in individuality. This is clever branding, and has been a good fit for an influential segment of the American and Western population: rebels, early adopters, would-be innovators who want cutting-edge technology and are relatively less sensitive to price. In Asian countries this is not such a strong fit, in terms of perceived personality. Asian cultures tend to be more collectivistic, and the theory is that millions of consumers in these cultures may find “i” less appealing than “we.”

For the iPhone, a whole set of factors converge to the same outcome. And I think this is typical of marketing failures. Rarely is it the fault of one or two factors. Usually it’s a complex confluence of multiple factors—product design, pricing, revenue model, distribution, promotion, branding, competition. Underestimating your weaknesses or overestimating your strengths. More often than not, multiple factors feed into most marketing failures.

See 15 Cautionary Tales: Failed Marketing Campaigns for more information.

Marketing failure: New Coke

Guest post by Dan Turner, senior lecturer in marketing, associate dean for masters programs and executive education at the UW Foster School of Business

newcokeNew Coke is—for my money—the most epic new product fail in marketing, more so than the DeLorean, Apple’s Lisa and Newton, Sony’s Betamax, and even the Edsel.

Many people have selective memories about the Coca-Cola Company’s decision to launch the product and the initial consumer reaction. Coke’s market share had been falling for years, and consumers overall expressed a strong preference for Pepsi over Coca-Cola in blind taste tests. The new, improved, sweeter formulation of Coke tested extremely well, with more people preferring the New Coke formula over both “old” Coke and Pepsi.

In a naïve way, it made perfect sense for the Coca-Cola Company to improve their product, making up for a known deficiency versus a focal competitor. In fact, sales analysis trends immediately following the product launch showed significant gains for the Coca-Cola Company. In informal blind taste tests, Seattle retiree Gary Mullins, founder of Old Cola Drinkers of America, failed to distinguish between old and new Coke or expressed a preference for the latter.

Of course, we know the rest of the story. The public revolt ensued shortly thereafter, and it had little to do with the taste of the soda. In launching the new version of Coke, the Coca-Cola Company had a made a fundamental error in forgetting the source of the value it was truly offering consumers.

A soda that tasted good was nice, but Coca-Cola really offered value on the basis of its strong, favorable, and unique brand associations: America, friendship, nostalgia, and the like. In changing the formula, the company walked away from all of these sources of value, and customers reacted strongly, emotionally, and in a predictable fashion.

The silver lining for the Coca-Cola Company rested in the fact that the re-introduced product, Coca-Cola Classic, created a firestorm of marketing communications activity, reminding consumers why Coke was so great in the first place and dramatically communicating the value of the brand.

See 15 Cautionary Tales: Failed Marketing Campaigns for more information.

Marketing win: VW Beetle

Guest post by Elizabeth Stearns, senior lecturer in marketing, UW Foster School of Business

vwbugWhen the Beetle was first introduced in the early 1960s, people would joke that you could go up a hill or you could have heat in a Bug, but you couldn’t do both. It was a quirky car, to put it mildly. Even VW engineers called it a lemon.

But the company positioned the Beetle as a different kind of automobile with a unique personality in a series of funny, brilliant advertisements. It found a target audience that was really interested in expressing their own personality, and they found this car was an extension of who they were. A generation of Beetle drivers reveled in its lack of frills. They didn’t care if you could drive up the hill with the heat on.

Then when the New Beetle was introduced in 1998, decades after the original was retired, the big issue was: how do you guide Baby Boomers down memory lane while also attracting the younger generation, because you need to grow that market and the Beetle is an entry vehicle into the VW line?

Cadillac had tried to attract younger drivers for years and failed because they simply did not want to drive their father’s car. There was the same danger for the reintroduced Beetle. It’s very difficult to design a campaign that successfully reaches two different demographic targets.

But VW pulled it off. The campaign was genius, with modern taglines like “Less flower, more power,” that sparked nostalgia in Boomers and spoke individuality to Millennials. The result was immediate success, creating a new “odd-shaped” category that would soon see competition in the reintroduced Mini Cooper, the PT Cruiser and others.

The original Beetle is a superb example of a flawed product saved by great marketing. And the marketing that launched its reintroduction was even better.

See 15 Cautionary Tales: Failed Marketing Campaigns for more information.

Female bankers in Indian pay it forward

Guest blog post by Cate Goethals, UW Foster School of Business lecturer

Why do more women hold top banking positions in India than anywhere else in the world—including the US? My students and I went to India in September 2010 to study women’s leadership at all levels of society, including to get an answer this question.

India is a country where women are widely undervalued—a bride is burned every two hours. And where, equally counterintuitive, far fewer women go into banking, so the pool of qualified females is smaller.

Abonty Banerjee, general manager of global operations at Indian bank ICICI

Abonty Banerjee, general manager of global operations at Indian bank ICICI

Our first visit was with top female executives at ICICI Bank in Mumbai, the country’s largest private bank.  ICICI has been the training ground for most of the top women in Indian banking. Why? It grew rapidly beginning with India’s economic reforms in 1991, providing opportunities for women. It also paid less than other banks and so attracted proportionately fewer men than other banks.

“We don’t do anything special for women,” says CEO Chanda Kochhar. “But we are in a way special because we don’t have any biases. When it’s an employee, we go by the merit of the employee. When it’s an entrepreneur, we go by the merit of the entrepreneur.”

Women also work harder even in an organization of hard workers, explains Abonty Banerjee, general manager for ICICI’s global operations. “We work very long hours, typically 12 hours per day, six days per week. That is a function of our population. If you don’t do it, there are so many others to fill the job.” There is no daycare, though relatives often babysit. Women are generally expected to manage households and children regardless of career. “Women succeed because they work harder at home and at work.”

Indian banker Veena Mankar discusses women in leadership with Foster students

Indian banker Veena Mankar discusses women in leadership with Foster students

We also visited with one of ICICI’s prominent alums, Veena Mankar. Veena founded Swahaar (“self-support” in Hindi), a bank and finance organization dedicated to making tiny loans to Mumbai’s urban poor—especially women—and teaching them how to manage money.

Inspired by the plight of her own household help, Veena is determined to make a difference in the lives of poor women. The challenge, she says, is to change their mindsets, to convince them they are as deserving as men and that their daughters as well as sons should be educated. Once they realize this, their girls often go to college, marry later, delay childbearing and have healthier children, thus ensuring a better life for future generations and the community.

This is where it comes full circle. Highly-educated and affluent women in banking use their success to change the context for women at other levels of society. “It’s not just about giving a woman a loan. It’s about giving her a place in society and her family,” explains Veena.

For background and a comparison of women in American vs. Indian banking industry, I recommend these New York Times articles: Female Bankers in India Earn Chances to Rule and Where Are the Women on Wall Street?

Cate Goethals, University of Washington Foster School of Business lecturer and Seattle consultant, leads global business seminars and study trips focused on women and international business. She has taught at the UW Foster School for more than 20 years—including a class called “Women at the Top” that was named one of the 10 most innovative MBA classes in the country by Forbes in 2010.

Generosity of women leaders in India

Guest blog post by Cate Goethals, UW Foster School of Business lecturer

Women Leadership Trip - India 2010I first noticed it on the plane before I even reached Mumbai when I sat next to a woman who owned a handicraft business. I told her I was bringing a group of 22 students to India. “Come to my home,” she said. “Let me cook for you.” Her sister-in-law, who ran a different business, came to sit in our row. “Please let me host your group,” she said.

University of Washington students and I (their faculty trip organizer) had set out to study women’s leadership in India. I expected the accomplished women we met to be powerful, visionary, confident, charismatic, any number of traits. What I had not anticipated was generosity.  Extreme generosity. The more responsibility someone had, the more time and attention and respect they gave us.  Some more examples:

  • Rohini Nilekani, who runs a multimillion-dollar foundation in Bangalore and is known as “the Melinda Gates of India,” spoke to us and then had to go to a meeting.  After the meeting, she returned and gave us another hour of her time.  Half of that was spent asking us for our ideas.
  • Poorvi Chothani, well-known attorney often seen on Mumbai TV, not only agreed to brief my group on women and the law in India – but went on to spend many more hours organizing a special session of the Ladies Wing (!) of the Mumbai Merchants Chamber to gather dozens of women in our honor. She turned what could have been a personal platform into an exchange of ideas.
  • Veena Mankar, leading banker and co-founder of microfinance institution Swadhaar, had to cancel our visit to go to a funeral. She then rearranged her schedule and spent more than an hour driving across Mumbai to meet with us at our hotel early one morning. “Young people have the best ideas,” she told me. “I talk to them whenever I can.”
  • Amma, “the hugging saint” and most well-known female spiritual guru in the world, heard that we were rushed through our first session with her. Although she hugged thousands of other people that day, she invited us for a second session, asked that we sit at her feet and personally answered our questions about women’s leadership. Then she asked her swami to give us back the money we paid to stay at her ashram. “Students should have pocket money,” she said.
  • Women of the world-famous Self Employed Women’s Association greeted each of us several times with a personal flower, a special bindi (red dot pressed with rice on our foreheads to nourish our spirits) and a bit of sugar to eat.

I was struck by this generosity on nearly every visit.  It may be part of Indian culture, it may be related to gender, it may be a function of the exceptional people we saw.  In any case, it is an overlooked and undervalued leadership trait – and one that is infectious, making the students and I want to give back…and give elsewhere…and do it again, creating new cycles of generosity even now that we’re home.  The ripples are still being felt.

Cate Goethals, University of Washington Foster School of Business lecturer and Seattle consultant, leads global business seminars and study trips focused on women and international business. She has taught at the UW Foster School for more than 20 years—including a class called “Women at the Top” that was named one of the 10 most innovative MBA classes in the country by Forbes in 2010.

The India exploration seminar abroad, called Half the Sky: Women Leaders and Entrepreneurs, included 22 graduate and undergraduate students.

State of the economy with faculty Hadjimichalakis and Rice

The 2010 MBA State of the Economy forum at the University of Washington Foster School of Business with finance and economics faculty members Karma Hadjimichalakis and Ed Rice covered issues related to our national economy, European trends, state and local economic issues as a result of the recent budget crisis, health care reform and more. This event is an annual series for Foster alumni.

RSS Missed the event? Listen to the 50-minute MBA State of the Economy podcast.

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Faculty podcasts: Brands that die and merger research

Two UW Foster School of Business faculty members gave lectures this week on research relevant to the financial crisis and our current economy: Brands that die and mergers & acquisitions. Missed the lectures? Listen to these 20-minute audio recordings.

Shailendra_JainMarketing Professor Shailendra Jain discusses groundbreaking research on consumer responses to brands that die—brand loyalty, weak vs. strong brands and PR backlash when brands are eliminated. Jain recommends managers should consider which are high or low priority brands, whether or not to add more brands, which brands to eliminate and how to do so effectively.
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Jarrad_HarfordFinance Professor Jarrad Harford gave an overview of 30 years of merger & acquisition research. Do buying or selling companies benefit from a merger? How successful are mergers & acquisitions over the long run? How much do CEOs vs. shareholders and investors gain or lose? Some results show that when mergers destroy stock value, CEOs still get wealthier.
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These lectures are part of Leaders to Legends Breakfast Lecture Series, an opportunity for business leaders and faculty to share insights about current business topics and trends with other business leaders, alumni, students and the Foster School community.