Category Archives: Leadership

Minority business economic challenges and opportunities

MichaelVerchotI opened today’s newspaper to yet more glum unemployment news. On October 22, the chairwoman of the White House Council of Economic Advisors told the Joint Economic Committee of Congress that “unemployment is likely to remain at severely elevated level” through the end of 2010. It appears that the only question now is how high the unemployment rate will go.

At the start of the recession in December 2007, the US unemployment rate was 5% and it grew to 9.7% in August 2009 (according to US Department of Labor’s Bureau of Labor Statistics). It’s now predicted that we’ll reach more than 10% before the end of this year. But we all know that unemployment is not evenly distributed among racial/ethnic groups and people with different levels of education.

The unemployment rate for African Americans, for example, has been above 9.7% since July 2008 and in August 2009 it was 15.1%. The Latino unemployment rate reached 9.7% in January and by August it was 13%.

The unemployment rate for people with less than high school degree has been over 9.7% since August 2008 and reached 15.6% in August 2009. For people with a bachelor’s degree, the unemployment rate peaked in May at 4.8%.

The fact that African American and Latino workers and all people without a college degree have high levels of unemployment are two of the reasons why we at the UW Business and Economic Development Center (BEDC) have a special emphasis on growing businesses that are owned by African Americans and Latinos and why we are excited about the impact that our BEDC Fellows are having on increasing the number of high school students who participate in the Foster School’s Young Executives of Color (YEOC) program run by the Foster School Undergraduate Diversity Services office.

Research over the last 20 years, largely conducted by Timothy Bates and Rob Fairlie, has found that, like white-owned businesses, companies that are owned by African Americans and Latinos tend to employ more people from these racial groups. (Both Bates and Fairlie presented papers at the 2006 and 2008 National Diversity in Business Research Conference hosted by the BEDC.) The BEDC’s success in growing highly successful businesses owned by people of color is helping to open job opportunities for Washington state residents from racial and ethnic groups that have historically high unemployment rates.

At our upcoming Minority Business of the Year Awards banquet we hope to raise at least $25,000 in scholarship funds that we can award to ten BEDC Fellows. I’ll talk more about the incredible work of our BEDC Fellows and the YEOC program in my next post.

By Michael Verchot, director of the UW Business and Economic Development Center

Foster MBA reunion speakers: Howard Behar and Allan Golston

Over 350 – a record number – Foster MBA grads returned to business school in September for the annual UW Foster School MBA reunion weekend. MBA grads from six different years (1984, 1989, 1994, 1999, 2004, 2009) gathered to reconnect with classmates, tailgate at a UW Husky football game, and listen to guest speakers talk about leadership issues. Guest speakers included:

Howard Behar, past president of Starbucks and former Foster School Fritzky leadership chair, talked about why people are not corporate assets, the value of the human spirit in the workplace, and how to encourage creativity and innovation.


Click image above to play video.

Allan Golston, Bill & Melinda Gates Foundation president of United States programs, shared insights about new and upcoming research on education, the minority access gap, and discussed “talent lottery” luck.

Click image above to play video.

Luxury brands are here to stay

Guest post by Gary Shansby, Foster alumnus (BA 1959)

There has been a lot of talk these past several months about whether luxury brands will survive the recession, and whether “premiumization” is dead. Contrary to what the pundits, consultants and bankers may be saying, I believe certain niche premium brands are not only surviving the recession but actually creating inroads and growing in this down economy.

I have spent the past 50 years building luxury and premium consumer brands such as Famous Amos Cookies, Mauna Loa Macadamias, Shaklee Nutritional Products, Terra Chips, Voss Water, Pureology Hair Care Products and my latest brand venture, Partida Tequila.

While I’ve never experienced economic conditions of the current level, I have been through numerous market and economic roller coasters and I can say from years of experience that the biggest mistake a luxury brand marketer can make in an economic downturn is to abandon the premium brand positioning and begin price promotions and discounting. This will provide short-term sales relief but ultimately doom the brand—once you break a price, there’s no going back up market.

America has become an investment nation focused on the here and now, and on short-term (quarter-to-quarter) results. Public company CEOs and management teams are unrealistically forced to deal with stock prices, temporary or current trends, and demands built by financial institutions. We know how weak many of those institutions have become.

As a former CEO of a Fortune 500 company, an investor and a proud entrepreneur, I do not believe “premiumization” is dead. Marketers must learn that the growth path to success is not a straight line, and variances occur along the journey of life. Consumers are becoming more and more interested and knowledgeable about what they purchase and especially about what they put in their bodies. I believe premium brands will resume the upward momentum once the economic downswing lightens, and consumer confidence comes back.

I believe that brands that discount, offer lower “deals,” and change their direction for temporary gain will succumb to a form of suicide. Brand equity is all important along with the highest quality products that can be made.

Only time will tell… but my bet is on future growth for truly great premium brands.

Gary Shansby is founder, chairman and CEO of Partida Tequila, LLC and on the advisory board of the UW Foster School of Business.

What do you think? Will premium or luxury brands survive the down economy?

Foster MBAs collaborate from the start

The first week of fall 2009 brings a new crop of Foster School full-time MBA students to the UW Seattle campus for orientation, leadership preparation and collaboration with “veteran” 2nd-year MBAs. Here’s a taste of what new full-time Foster MBAs are experiencing during the intensive LEAD week.

“Teams are a central part of the Foster MBA Program. During the first year nearly every class requires you to complete work with your core team of 5 or 6 students, whether it’s a research paper, a presentation or both. Foster’s Leadership Fellows program matches a 2nd year student with a 1st year team to provide support and guidance. As 2nd year students, by now we’ve all learned a thing or two, from tools for facilitating a brainstorming session to the secret for cheap parking on campus.”

- Jessica Didion, current Foster MBA 2nd-year student

Read more about the Foster MBA student experience on Inside the Foster MBA blog.

Welcome to Foster Unplugged

Welcome to the University of Washington Foster School of Business blog, where you can learn about our business, community, student, faculty connections and happenings. Leaders are being educated and solving  complex, real-world problems while learning business fundamentals.

We aim to keep it fresh and relevant to current business issues, insights, new research, share life around the Foster School and much more.

Foster School of Business honors transformational leaders

At the 2008 University of Washington Business Leadership Banquet, October 30 at the Sheraton Seattle, the Michael G. Foster School of Business recognized the paramount importance of transformational leadership during the current global economic crisis. On that note, the school honored a trio of long-time advisors, stalwart supporters and exceptional leaders — Gerald Grinstein, Mark C. Pigott and Eileen O’Neill Odum – with its 2008 Distinguished Leadership Award.

“Our nation’s sixth president, John Quincy Adams, said, ‘If your actions inspire others to dream more, learn more, do more and become more, you are a leader.’ And each of the people we’re recognizing tonight is just that,” said Foster School Dean James Jiambalvo. “They serve as an inspiration to all of us.”

Gerald Grinstein is a strategic director at Madrona Ventures Group and CEO emeritus of Delta Airlines. He has served as non-executive chairman of Agilent Technologies and chairman and CEO of Burlington Northern, Inc. He was a partner in the law firm of Preston, Thorgrimson, Ellis & Holman, chief counsel to the US Senate Commerce Committee and assistant to US Senator Warren G. Magnuson. A native of Seattle and graduate of Yale College and Harvard Law School, Mr. Grinstein is currently the trustee of the Henry M. Jackson Foundation and a board member of Long Live the Kings, The Seattle Foundation, the Foster School of Business, the University of Washington Foundation, and the William D. Ruckelshaus Center.

Eileen O’Neill Odum, a 1977 graduate of the Foster School and member of its Advisory Board, is executive vice president and group CEO at NiSource, a natural gas and electric company. She has served in a variety of senior leadership roles with GTE Corp., Verizon Communications and Commonwealth Telephone Enterprises. Ms. Odum is also an active member of the Committee of 200, an invitation only membership organization of the world’s most successful female entrepreneurs and corporate leaders which helps to equip the next generation of women with scholarships, education and mentoring that will foster their rise to the top

Mark Pigott, a major benefactor of the Foster School, is chairman and CEO of PACCAR Inc, a Fortune 150 technology company. PACCAR has received the National Medal of Technology, the nation’s highest science award. Mr. Pigott has been honored with the prestigious Officer of the British Empire (UK), the Commander of the Order of the Crown (Belgium), and the Officer of the Orange-Nassau (Netherlands) for his efforts in strengthening international business relations. A passionate philanthropist, Mr. Pigott and PACCAR have made numerous contributions to the Foster School, including the lead gift to construct PACCAR Hall and the PACCAR Award for Teaching Excellence.

In his keynote address, Reginald Fils-Aime, president and chief operating officer of Nintendo of America, Inc., spoke of the opportunity that exists amid every crisis – for those with vision. “Given the broader, macro-economic challenges that we are facing right now, the topic of leadership is especially timely,” he said. “At Nintendo, we believe there are opportunities right now for leaders to do what they do best, to create opportunities and to drive businesses forward.”

To illustrate, Fils-Aime offered Nintendo’s bold, innovative moves to expand a shrinking home video gaming industry through its inclusive new offerings of the hand-held Nintendo DS and family-oriented Wii console. Delivering gaming to the masses rather than only hard-core players, both products have seen blockbuster success around the world.

“Hopefully you can look at your own industry through a new set of eyes, challenging not what has been but what can be during this time of opportunity,” he said. “Challenge those paradigms and hopefully you’ll find growth in new spaces.”

Advisory Board Chair Lex Gamble (a 1959 Foster School graduate and 2006 Distinguished Leadership Award recipient) added: “Times of crisis underscore the need for a great business school like the Foster School of Business. Because it is here, in the learning laboratory, that we educate leaders who have the skills to make a difference in the challenges they confront, and who are prepared to lead their organizations – and their communities – through times like these.”

The 2008 UW Business Leadership Banquet’s Premier Sponsors included iPass Inc., Premera Blue Cross, Saltchuk Resources, Inc., Wells Fargo and Weyerhaeuser Company. Major sponsors included Alaska Air Group, The Boeing Company, Crowley Maritime Corporation, Deloitte, Neal and Jan Dempsey, Ernst & Young LLP, GM Nameplate, GVA Kidder Mathews, KPMG LLP, LMN Architects, Odum & O’Neill Family, PricewaterhouseCoopers LLP, RSM McGladrey, Sellen Construction, Sonosite, Inc., Sweeney Conrad, P.S., Univar and Williams Investment Company.

Proceeds from the event fund scholarships for students at the Foster School of Business. And it was to those students that Odum delivered the following advice upon receiving her award. “Keep your own scorecard – your personal performance report. This scorecard may contain traditional performance metrics but it should also include your contributions of positive energy, active support to others, giving back, making good things happen – leaving your school, your job, your company, your community better for your presence. Truly high performance is both deep and wide in its impact.”