Minh Tran (MSIS 2012) is a systems and design integration specialist at Boeing. He got his Master of Science in Information Systems from the Foster School to have a competitive advantage over his peers.
Guest post by Jonathan Brogaard, an Assistant Professor of Finance at the Foster School
Is high frequency trading good or bad for financial markets? In January, the Foster School Department of Finance and Business Economics hosted a high-level summit to discuss how the increasing automation of financial markets is affecting investors, market volatility and order execution.
The discussion brought together Foster finance faculty and senior executives from local investment firms.
As an early investigator of this emerging topic in finance, I was asked to present the leading academic findings.
First, a bit of definition. High frequency trading (or HFT) is the fastest subset of computer-based algorithmic trading. HFTs act either as market makers or exploit inefficiencies in the market. They buy and sell constantly, hold very little inventory at any given time, and end each day with zero positions. In short, they run a volume business, picking up fractions of a penny over and over and over again. This leads to regular—and sometimes extravagant—profitability.
But HFTs are shrouded in mystery. Little is known about these firms and their algorithms that dominate market trading. HFTs are obtuse and generally unregulated. And they have been linked to scary events such as the flash crash of May 6, 2010.
A small group of academics, including myself, study the effect of HFTs on market quality—how well markets operate. The consensus of our findings is that, on average, HFTs are improving the quality of markets. That is, they are adding to price discovery (making prices more informative), increasing liquidity (making more shares available to be bought and sold), and decreasing spreads (the price difference between what a buyer and a seller will pay).
But what are traditional investors experiencing in the markets? Our workshop guests voiced a variety of opinions on HFTs, and shared experiences that will help me and other researchers fine-tune our measurements to better reflect the realities of an increasingly computerized market.
We certainly share their concerns about the lack of understanding around high frequency trading. We have much to learn. Do HFTs increase or decrease the risk of flash crashes? What is their presence doing to investor confidence? Are they beneficial in the market for smaller stocks?
We tend to fear what we don’t know. But high frequency trading is certainly here to stay. So we’re working diligently to shed light on this powerful new force in the financial markets.
Guest post by Bruce Avolio, Executive Director of the Center for Leadership and Strategic Thinking and Marion B. Ingersoll Professor of Management
I recently attended the Jepsen School’s 20th anniversary celebration in Richmond Virginia. The Jepsen School was the first school in USA to focus specifically on leadership as an undergraduate major as its main thrust and did so taking a broad humanities perspective. They have now graduated over 1,000 students who approach leadership with a very, very broad mindset from the great books of literature and history to the R.O.I. focus of corporations.
During one presentation at the conference, we talked about a program called Shakespeare Behind Bars. From its website, “Now in its 18th year, Shakespeare Behind Bars is the oldest program of its kind in North America. SBB programming serves incarcerated adults and youth using exclusively the works of William Shakespeare.” So try to imagine someone from the African American gang in a correctional institution working with someone from the white supremacist gang on Hamlet. That is exactly what happens, and this program has participants with a significantly lower recidivism rate, lower rate of violence and infractions, etc. So next time someone is in a brainstorming session with you, and they suggest something so out of the range as Shakespeare Behind Bars must have been when it was first proposed, I suggest you suspend your judgment!
Case competitions are an incredible skill builder for undergraduate business students – they require students to work as consultants on a real company and business challenges, they are given limited resources and time to create a solution, and then they are asked to present these solutions to a panel of corporate judges. Now, imagine doing this in a second language. This Fall, three Certificate of International Studies in Business (CISB) students studying Mandarin as a second or third language competed in the Chinese Track of the BYU Business Language Case Competition.
Kanghee Jeon, Alex Birch, and Ben Chow spent two weeks studying a case written in Chinese on Pepsi Company and preparing their presentation and executive summary all in Chinese. The team considered three countries in which Pepsi Company might expand. After assessing various economic factors, their solution was to enter the Chinese market. Their plan was to “penetrate not only beverages but also the food market which could be Pepsi’s competitive advantage over Coca Cola Company,” said Kanghee.
The team competed in three rounds at Brigham Young University, and they received outstanding feedback from the judges about the depth of their analysis and solution. Judges commented that they “loved how the presentation started with recommendations instead of analysis,” and that the students had a “great understanding of Chinese culture and financial environment” as well as “great leverage on business terms.”
One of the UW student competitors, Kanghee Jeon, said “I was very excited to do the case competition in a second language (or third for me). Even though I was worried about my Chinese language skills, while preparing for the competition, I learned lots of new vocabulary and phrases. I am a lot more confident in speaking in Chinese after the competition. Additionally, it was a great opportunity for me to meet judges and other students from different schools.”
Kanghee would highly recommend participating in a business language competition to other students: “This is such a unique experience … You will get to build your teamwork, problem solving, time management, leadership, and language skills. It was challenging, but very rewarding!”
Foster MBA alumnus and benefactor balances an eclectic curriculum vitae
1) Foster MBA who constructs crossword puzzles worthy of the Sunday New York Times.
Hmmm… Eight letters. Begins with J, ends with N. Let’s see. Has to be a bona fide polymath, well-read and widely experienced. Creative and analytical. A serious student of culture—both popular and passé—equally versed in history, commerce, literature, sport, art, film, science, architecture, medicine, warfare, language. A jack-of-all-topics.
Got it! Jeff Chen (MBA 2002).
And big-time crosswording is just a recent addition to the ever-expanding, endlessly fascinating curriculum vitae of this remarkable graduate of the University of Washington Foster School of Business. Chen is an entrepreneur, author, wealth manager, Big Brother, board member, game enthusiast, rock climber and world traveler.
He’s also a philanthropist who directed a major gift to the Foster School from his family foundation last year. His generosity inspired many fellow alums from his MBA class of 2002 to mark their 10th year reunion by contributing to a record-setting annual gift—a combined $468,000 to endow an MBA scholarship fund.
“I had a fantastic experience at Foster,” says Chen. “The education was great and the people were even better. I wanted to offer the same opportunity to others to experience what the MBA Program did for me.”
Gave as well as got
Chen earned two degrees in mechanical engineering from Stanford and worked at a product design firm before enrolling in the Foster School’s MBA Program, as so many, to enhance his organizational impact.
The engineer proved a quick study of management. “Simply the best of the best of our MBAs,” assesses Ed Rice, an associate professor of finance and business economics who has seen plenty in his four decades at Foster.
What really distinguished Chen, Rice adds, was his generosity of intellect. When he saw some classmates struggling in Rice’s core finance course, Chen began offering free review and tutoring sessions. Pretty soon those classmates were sharing their own particular strengths with each other, creating a peer-to-peer dynamic that has since been institutionalized in the Student Support Network.
“This ethic has become engrained in the program,” says Dan Poston, associate dean for master’s programs. “It always existed, to some extent. But after Jeff established the model, it became the way it’s done at Foster.”
Poston would argue that Chen’s exhaustive job search should also stand as a model. After interning at Immunex and working in technology commercialization through the Buerk Center for Entrepreneurship, he targeted early stage bioscience as his chosen field.
But rather than waiting for opportunity to find him, he created it. After conducting a comprehensive audit of potential firms, he connected with Dr. Ryo Kubota, a UW professor of ophthalmology who was developing a revolutionary treatment for blinding eye disease such as glaucoma and macular degeneration. Chen helped Kubota get Acucela off the ground, then headed business operations and helped raise more than $40 million in financing. After Acucela brokered a transformational partnership with a large Japanese pharmaceutical company in 2008, it was time for a new challenge.
“After the partnership deal, I felt like Acucela had outgrown what I could bring to the company,” Chen says. “It was time to step away.”
Seven breakneck years with Acucela behind him, Chen decided to seek a modicum of balance, try his hand at a range of activities and “see what sticks.”
In a word, lots.
He has served on the boards of Big Brothers & Big Sisters and Passages Northwest, and on the finance committee of Treehouse. He manages the portfolios of friends and family. He has done field work with microfinance organizations Gambia Help and Global Partnerships. Alongside his brother and father, he manages the family’s Paramitas Foundation. He travels, climbs and plays games with perhaps a bit more brio than most. He recently got married.
It was Chen’s wife, Jill, who introduced him to the joys of crossword puzzles. Working together and solo, he has published upwards of 50 in major newspapers and has become a regular contributor to the Los Angeles Times and the New York Times. On November 25th and again on January 27th, he landed the most prestigious spot in all of puzzledom: the Times Sunday crossword.
Chen also just completed a book of 52 puzzles around a theme of bridge (the card game, another passion). “Doing crosswords about bridge is kind of the nexus of everything that’s good in the world,” he says, exaggerating just a bit.
Or, to put it another way, as he did when announcing the project on Facebook: “I’m officially 80 years old.”
The writing life (and living)
Constructing crossword puzzles is a hobby for Chen. Writing books, on the other hand, is becoming much more.
Since penning his first sentence of fiction in earnest just two years ago, he’s completed eight novels for middle-grade readers. Among them are tales of exceptional kids recruited to a remote island to construct monsters for the Greek gods, of flying pygmy elephants from Burma who plot the overthrow of Victorian-age Britain, and of an overworked Grim Reaper taking on a bumbling apprentice who screws up everything.
Fanciful plots, but will they sell? Chen has a few advantages in the notoriously difficult-to-crack publishing industry. For one, an agent as active as his imagination. For another, a preternatural ability to fuse right and left brain at once, to approach writing as both an art and a business.
Many principles of enterprise are evident in his literary method, including:
Work flow management – Chen writes 6 or 7 days a week, for 3 to 4 hours a day, aiming for 1,500 words each day, actually keeping a timecard to stay on task.
Research – He’s read, dissected and analyzed upwards of 300 middle-grade books in the past couple of years to discern what works (and what doesn’t).
Development – He wrote off his first five manuscripts as, essentially, practice.
Scaling – He’s outlining multiple book series from original tales, the overwhelming trend in kid lit today.
Outsourcing – He has assembled a network of fellow writers and truth-tellers to assess ideas and drafts.
Diversification – He keeps a running list of story ideas that currently numbers in the 300s.
And one last entrepreneurial trait: ambition.
“I don’t just want to get something published,” Chen says. “Ideally, I’d like to be one of the most successful authors of all time.”
Is he tempted to get back into business? “I get that inkling,” he admits. “But you know with the writing, it’s kind of like trying to get a startup off the ground.”
Could an entrepreneur see it any other way?
In 2011 you were named Director of Estimating and Pricing for Boeing’s 787 program after serving as the Director of Financial Planning for the program. Tell us about your new role.
In my new role, I’m responsible for all of the estimates that are done on the 787 program. These estimates can be broken down in a couple of different categories: the engineering changes that are being considered for the airplane, customer requested changes to the airplane, new derivative airplanes being studied and any production system investment under consideration. All of these estimates require my team to reach out to all of the different organizations that would have impacts due to the proposed changes, including engineering, procurement, production and support. Most of these estimates get presented in a business case format that includes a number of financial metrics and considerations. We also work with our pricing organization for estimates that include pricing considerations with our customers.
I also have responsibility for all systems, processes and tools that support our function in our day to day activities.
What was it like to come to the US from Norway to study at UW? Did you plan to stay in the US after earning your MBA?
It was a great opportunity that also included quite a culture shock. I had not been to the US before and I still recall very vividly the first day which included the I5-I405 Hwy interchange coming out of Seatac, the downtown skyline and Bellevue Mall. My impression was, “wow everything is bigger in the US.”The first couple of days on the UW campus were also very impressive in regards to the sheer size of the campus and all of the great architecture of the buildings. My first quarters were certainly influenced by the fact that English is my second language and some of the challenges it drives. I also recall the excitement I always had talking to friends and relatives back in Norway in regards to my experiences that UW offered including my first Husky football game with 60,000 plus fans in the stands.I did not have any plans whatsoever to stay in the US in the beginning but that changed very quickly when I ran into a student from Oregon in the McMahon dining room in the spring of 1986. A very long and great story but here we are 25 years into our marriage with 2 great sons.
How has your global experience helped you in your various positions?
I think the global experience has been very important for me throughout my Boeing career. English being my second language has always made me pay very close attention when other people are communicating so I end up doing a little more listening than talking, which I have found to be a good thing. I also think having a global experience enables you to recognize that most people come from different cultures and the more you understand about their background and can take that into consideration, the more productive your interactions will be.
What would you tell students about the world of global business?
The world is becoming a smaller and smaller place every day. By that, I mean that advances in transportation and technology enable a much simpler way to connect with people around the world. It is paramount for us to recognize this and embrace it. The quicker you can adapt yourself to operate and efficiently interact with people in all of the different cultures, the more successful you will be.
I think the UW is an excellent place to start that journey. You have a tremendous opportunity at UW to really reach out to the diversity that the school has to offer. Taking advantage of these opportunities will put you ahead of a lot of your peers that you will be compared to and compete with as you progress in your school work and your professional career.
Guest post by Bruce Avolio, Executive Director of the Center for Leadership and Strategic Thinking and Marion B. Ingersoll Professor of Management
Up until two weeks ago, Umeå, Sweden, was just a dot on the global map to me.
Since going there, it has become a place of special significance for me.
Working with the Center for Leadership, Umea, whose tag line is, “science that is useful,” we held a conference for 400+ delegates focusing on leadership, creativity and innovation. We also participated in a TEDx event, at which I lectured for 16 minutes….full stop on “Showing up for Leadership…Ta Dah!” What strikes you about Umea and the folks who reside there is that they seem to realize they are building a very special city. This may be due in part to the world renowned design college there and also because Umea will become the capital of European culture in the next year.
At the design college, I saw a full classroom where the floor operated as an iPad.
We talked about the importance of using science to support leadership development with executives, coaches, trainers, etc.
We explored leadership in a country that has not been in a war for over 250 years.
Umeå & Sweden. Wow!
And I met some new best friends, some great new colleagues, and sopped up the energy of Umeå at -27 centigrade. Also, at an officer’s quarters (sometimes Swedish and sometimes Russian depending on the state of wars a couple of centuries ago) turned restaurant, turned museum, we witnessed the standoff between the use of wine and beer in enhancing one’s cuisine. The beer guy talked of blatant discrimination against beer in restaurants, where the wine list was two pages long and beer got two lines! That night, in a far off place at -27 centigrade the beer guy ruled!
Megan Soehren (MSIS 2012) is a client program coordinator at Enprecis, a market research company. She got her Master of Science in Information Systems from the Foster School so she could expand her knowledge base.
Shannon Mills has been involved with GSEC since its inception in 2005. She shared her experiences as a competitor on a multi-disciplinary team, mentor and judge with us in a recent interview.
GSEC: How did you get involved with the Global Social Entrepreneurship Competition (GSEC)?
SM: My Evans School faculty mentor suggested it as a great opportunity and a Hubert Humphrey Fellow had an idea and approached me to work on it with him. I found the overall project challenging, fun and extremely rewarding, so I stayed involved in subsequent years.
GSEC: What was it like to compete in GSEC that first year?
SM: We found another person at the Evans school, an undergrad from the Business School, and a graduate student from the Communications department. We all brought a different perspective and expertise to the business plan that contributed to a very cohesive whole. I was greatly rewarded by working in a team and defending/presenting our plan to a group of judges that were not gentle. Our team placed second.
GSEC: What did you enjoy about being a judge?
SM: As I Judge I always focused on the social return investment analysis done by the teams and making sure a real effort was put into that component. I would dig deep into the assumptions that teams were making to see if they were believable. For me, judging is rewarding and fun but not as rewarding as being a mentor.
GSEC: What made mentoring so rewarding for you?
SM: For two years I was a mentor, which provided an opportunity to have real impact on a team’s plan as well as their presentation. The second year I worked as a co-mentor and we spent time going back/forth with the team especially focusing on their financials and really pushing them on all their assumptions throughout the plans. We were able to give them our experience with product development and clinical trials to help their plan be more realistic in the time frame and components that would need to be completed. Then the opportunity to work with your team during their week in Seattle is a fantastic experience. Our team went from doing a horrible presentation to one that was very polished and informative – and, they won the competition! Both teams were from overseas which made communication back/forth challenging but we did use Skype. It wasn’t as much until they were in Seattle that we were able to give the most help.
GSEC: As someone who has touched nearly every part of this competition and clearly feels so passionate about it and about social entrepreneurship, what would you say to a student who was considering applying? Or to a professional who was thinking of judging or mentoring?
SM: Do it. Any involvement is positive. The plans are becoming better and better every year and the students all have such passion that it is contagious.
To learn more or get involved, contact email@example.com.
Guest post by Ben Flajole, Evening MBA 2014 and Evening MBAA VP of Alumni Affairs at the Foster School of Business
“If you’re up at a whiteboard listing all of the things that make a good leader, I don’t think many of you would put ‘4.0 student,’ right?” With that remark, Eric Sprunk, VP of Merchandising and Product at Nike, saw most, if not all, of the crowd breathe a sigh of relief. As the featured speaker at the MBA Perspectives on Leadership event on January 10, Sprunk spent time discussing what, if not perfect grades, makes people great leaders.
Sprunk’s presentation on leadership at Nike highlighted some key differences between being a good manager and a good leader. To him, a good leader creates an environment in which people are encouraged and allowed to achieve their best work every day; a good manager makes sure the employees have what they need to be able to do that. He then referenced the traits he considers necessary for good leadership, which were defined by a student in a prior session as “soft skills”:
- Courage: having authenticity and honesty in your interactions with others.
- Energy: bringing great enthusiasm to your team and never asking for more from them than you are willing to give yourself.
- Balance: knowing that burnout is real and that feeling like a good son, daughter, dad, mom, husband, and/or wife is crucial for producing your best work.
Ideally, as Sprunk stated, we’re able to be great managers and leaders simultaneously. However, that’s not always the case. While good managers generate good results, it is often good leaders that produce the best results by leading with vision, strategy, and having and exercising the traits listed above.
Watch the video below for more highlights from his talk.
The MBA “Perspectives on Leadership” Speaker Series is organized by the Full-time and Evening MBAA and the Foster School’s Alumni team.