The undergraduate office team, clockwise from left: Erika Walker, Renee Camarena, Elinor Gregorio, Mary Ballingit, Karren Bautista Tanisaki, Dresden John, Barbara Felkins, and Sojourner Blair. Missing from photo: Dinko Lakic and Alessandra Fadeff.

The Haas Undergraduate Office will be honored with two “Excellence in Advising” awards this week by UC Berkeley’s Vice Chancellor of Undergraduate Education.

Barbara Felkins, director of academic affairs for the Haas Undergraduate Program, will receive the Mary Slakey Howell Excellence in Advising Award,  while Felkins and her undergraduate team will be separately honored for “Excellence in Advising.”

Both awards will be given during a Dec. 12 ceremony at the Banatao Auditorium in Sutardja Dai Hall from 4-6pm.

“It was a total surprise for me,” said Felkins, who has worked at Haas for 32 years. “It’s just amazing to receive an award for doing something that I love. Working with our students and helping them with their academics as well as their personal problems can be very challenging, but when I see them walk across the stage at our commencement ceremony it’s all worth it.”

“Excellent service and positive energy”

The award, named for the late Mary Slakey Howell, former director of advising and policy at the College of Engineering, is UC Berkeley’s highest for advising excellence. The awards are given annually across campus by the office of the Vice Chancellor of Undergraduate Education, Catherine P. Koshland. They recognize “the positive impact the office has had on student learning, performance, engagement, and progress and the many ways it contributes to a culture of advising excellence on campus.”

Dinko Lakic and Erika Walker (with student) at 2018 undergraduate commencement

The honored undergraduate team includes Felkins, Sojourner Blair, director of admissions; Karren Bautista Tanisaki, assistant director of academic & student services; Renee Camarena, assistant director of student services; Dresden John, student experience manager; Alessandra Fadeff, program manager, admissions; Mary Balingit, assistant director of admissions and outreach; Dinko Lakic, associate director of student services; and Elinor Gregorio, assistant director of academic affairs.

In her nomination form, Erika Walker, assistant dean of the Haas undergraduate program, said the team has “delivered excellent service with positive energy and passion” on a regular basis during a very busy year.

“The team’s applied leadership methods are geared toward helping students become independent learners and effective leaders,” Walker wrote. “I am proud to have a team that supports and advocates for students, and provides equitable service.”

She noted that the office has recently launched and supported multiple new programs, including the Management, Entrepreneurship, & Technology (M.E.T.) Program, a simultaneous degree between business and engineering; the BioBusiness simultaneous degree program with molecular and cellular biology; and a new Global Management Program (GMP) for freshmen that embeds global education into the undergraduate experience.

Barbara Felkins, recipient of the Mary Slakey Howell Excellence in Advising Award.

“We always put the student experience first,” Blair said. “I’m honored that the office is being recognized.”

A stellar graduation rate

Walker also nominated Felkins, who began her tenure at Haas as an assistant in Associate Dean David Alhadeff’s office, under former Dean Ray Miles.

“From the smallest innovations to crisis care management, it is because of Barbara that we have a 99 percent graduation rate of business majors,” Walker wrote in her recommendation letter.

In her current role, Felkins oversees student degree progress from admission until graduation, assisting students with class planning, academic, and personal issues. Felkins also works with the faculty, tracking student grades and advising on academic policies. Additionally, she oversees undergraduate commencement and the graduation reception and serves on campus-wide committees, including the Colleges and Schools Committee, Student Systems Policy Committee, and the Advising Operations and Advising Council.

In his nomination letter for Felkins, Jay Stowsky, senior assistant dean of instruction, called her the “longest serving and most deeply knowledgeable student affairs officer at Haas.”

“Her long tenure has been characterized by a unique ability to connect meaningfully and compassionately with individual undergraduate students while simultaneously enforcing fairness in a competitive and complex enrollment system,” Stowsky wrote.

(Left to right) Lecturer Steve Etter with Sojourner Blair and Karren Bautista Tanisaki of the undergraduate program office

Haas finance Lecturer Steve Etter commended Felkins for her attention to detail, knowledge of the university, and positive disposition with students.

“With ever-changing work and personal schedules, students often turn to Barbara for advice on choosing faculty, classes, and breadth requirements,” Etter wrote in his nomination letter. “I’ve heard so many times from students that Barbara was a life saver when it came to selecting classes and getting through the process.”

Support for the event represents a core tenant of the undergraduate office, Thomas noted: “If you see a problem, solve it.”

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National Real Estate Case Competition winning team: (left to right) Joe Dembesky 19, Mike Wiedman 20, Mark Trainer, MCP 19, Robert Kelly 20, Matthew Hines 19, and Claire Collery 19.

A team of Berkeley MBA students took first place at the 16th annual National Real Estate Case Challenge for their creative investment strategy surrounding a new commercial property.

The prestigious finance-based competition, hosted by the University of Texas McCombs School of Business last month, charged 20 teams from the top MBA programs with analyzing a real estate investment case and presenting a recommendation before a panel of industry leaders.

For three of the six Haas team members—Matthew Hines, MBA 19; Robert Kelly, MBA 20; and Mark Trainer, Master of City Planning (MCP) 19—the win comes just months after participating on a team of students that took back the Golden Shovel real estate award from Stanford. The other National Real Estate Case Challenge team members—Claire Collery, MBA 19, Joe Dembesky, MBA 19, and Mike Wiedman, MBA 20— participated in their first competition. The team took home $10,000 in Haas’ first win since 2009.

Case sponsor Invesco asked teams of six to figure out the best way to use money generated from a new commercial real estate construction project. The options given were to keep the building in the portfolio with no change to existing financing; keep the building in the portfolio but refinance the loan on it; sell the building and return the profits to investors; or sell the building and invest the profits in building a new property.

Questioning the status quo, the Haas team came up with a different option.

“We questioned why there were only four options given, and we began to suspect there was a hidden fifth option,” Hines said. The team proposed refinancing the existing building and combining the savings with additional money in the private equity fund to invest in building a new property.

The Berkeley Haas team spent nearly three months preparing for the competition during an independent study course taught by Lecturer Bill Falik, a managing partner with Westpark Community Builders, and Abigail Franklin, an investment banking and real estate student adviser. Students in the class practiced solving sample cases each week and presented to guest judges, including former competition participants and local finance and real estate professionals. The format helped build competence, cohesion and confidence, Dembesky said.

Judges said they were impressed with Berkeley’s presentation, which called for a role playing, creativity and financial acumen.

“I was playing the role of the fund manager, and Matthew [Hines] burst onto the scene from the development team and pushed for funding the second building,” Collery said. One of the judges told the team that the performance felt like being in a real investment committee meeting, Dembesky said.

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The job market is bright for the 2018 full-time MBA class. Photo: Noah Berger

Salaries and sign-on bonuses remained strong for the Class of 2018, with a bump in the number of students landing jobs three months post-graduation.

About 93.4 percent of job seekers accepted offers within three months of graduation, with about 83 percent receiving job offers by graduation.

“This is just about as strong of a job market for MBAs that I’ve ever seen,” said Abby Scott, assistant dean of Career Management & Corporate Relations. “Salaries are up, thanks to stock options and bonuses. We’re really pleased with the employment success of this year’s class.”

Pay is solid this year for the class of 242 graduates, with average salaries of $127,571, up from $125,572 last year. Those salaries were topped off by an t average sign-on bonus of $29,212. About seventy percent of the class received signing bonuses, and about 41 percent received stock options or grants.

Tech, consulting top sectors

Technology was again the most popular sector for new Berkeley MBAs, pulling in 32 percent of the graduates. Amazon, Google, and Adobe were among the top tech employers.

Gabriela Belo Soares, MBA 18, said she took a full-time job at Google in business operations and strategy for a number of reasons.

“I always admired the company trajectory and how it changed the way we use internet, and I strongly identified with the company’s values and mission and the challenges and opportunities I would face,” she said. “Tech companies are currently under massive scrutiny from users and the media and have a big pressure to keep up the high pace of growth and innovation. This environment is exciting and requires making smart decisions responsibly and quickly. That was what I was looking for.”

Meantime, 24 percent—or 44 students—took jobs in consulting, with McKinsey & Co., Deloitte, Ernst & Young, Bain & Co., Boston Consulting Group (BCG), and IDEO representing the top hiring firms in consulting.

Carina Serreze, MBA/MPH 17, who graduated in December, took a job as an associate with McKinsey—her first choice of the three offers she received.

“When it came down to it, I was choosing between a full-time offer at Genentech or a startup or McKinsey,” she said. What drove her decision was the opportunity to work across different healthcare verticals at McKinsey, where she also has more geographic flexibility (she now lives in Seattle and travels often to San Francisco).

“Consulting was an opportunity to go really broad,” she said.

New companies make list

Nearly 14 percent of grads took positions in finance, including fintech, up from 11.8 percent last year. Meantime, 14 graduates started companies, while 25 others went to startups in various industries.

New companies on the school’s top hiring list include EY Parthenon, IDEO, Kraft Heinz, and Tesla.

Maxwell Kushner-Lenhoff, MBA 18, said the work he did at Haas taught him many of the skills he needed to be successful in his current role as a global supply manager in battery materials at Tesla.

“I came back to Haas to get into cleantech and I discussed the work I did in the Cleantech to Market course during my interview process,” said Kushner-Lenhoff, who previously worked at the Dow Chemical Company. He is one of seven members of the Class of 2018 who went to work at Tesla.

Read the 2018 employment report.

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It was a year of milestones, of changes, and of new beginnings here at Haas. As we prepare to welcome our new Dean Ann Harrison next month, here’s a look back at the Top 10 stories of 2018.

1. Dean Rich Lyons wraps up his term; Laura Tyson steps in as interim dean

After Rich Lyons wrapped up his 11-year tenure as dean with a guitar-powered “Berkeley Leader: Live!” worldwide tour, Laura Tyson stepped in as interim dean July 1. Having served as dean of the Haas School from 1998 to 2001 and on the Haas faculty since 1990, Tyson is a steady hand at the helm.

2. Renowned Wharton economist Ann E. Harrison named as dean

Photo: Noah Berger

Ann E. Harrison, a renowned Wharton economist and Berkeley alumna, will begin her term on January 1, 2019. Harrison, the William H. Wurster Professor of Multinational Management and Professor of Business Economics and Public Policy at the University of Pennsylvania’s Wharton School, has deep Berkeley roots. She earned her bachelor’s degree from UC Berkeley with a double major in economics and history in 1982. She also served as a professor of Berkeley’s Department of Agricultural & Resource Economics from 2001 to 2011. Her initial priorities: Grow the faculty in key areas, increase the number of cross-school programs, and increase the diversity of the student body and faculty.

3. Chou Hall is dedicated, on track to be nation’s first “zero waste” academic building

UC Berkeley Chancellor Carol T. Christ and University of California President Janet Napolitano came out to help dedicate Chou Hall, the newest campus addition, in March. The $63 million building, which opened last August, was funded entirely by donations from alumni and friends. Chou Hall is currently on track to become the first TRUE Zero Waste certified academic building in the U.S.

4. Haas adopts a new diversity, equity & inclusion plan; hires new director of inclusion and diversity 

Hired last January from UCSF, where she directed the Multicultural Clinical Training Program, Élida Bautista is charged with setting school-wide strategy for inclusion, diversity, and equity efforts focused on students. This past October, Bautista helped senior Haas leaders deliver its first Diversity, Equity & Inclusion Action Plan, which provides concrete ways to bolster enrollment of underrepresented minorities at Haas and to develop a more inclusive environment school-wide. The plan is a direct response to a decline in the number of African-American students enrolled in the Full-time Berkeley MBA Program over the last two years.

5. 8th anniversary celebration for the Defining Leadership Principles

It’s been eight years since Rich Lyons codified the school’s culture in four Defining Leadership Principles: Question the Status Quo, Confidence Without Attitude, Beyond Yourself, and Students Always. The school celebrated with its first annual Berkeley Haas Culture Day in February. To commemorate how deeply they’ve been embedded in school culture, the four DLP’s were carved into the walls along the Piedmont Avenue entrance.

6. Janet Yellen leaves the Fed after achieving “near perfection”

Professor Emeritus Janet Yellen, who taught generations of Haas students from 1980 to 2004, retired in early February after a four-year term as the first woman to serve in what’s been called the world’s most powerful economic job. Under Yellen’s guiding hand, unemployment fell steadily, inflation stayed low even as the economy built up a head of steam, and, to add icing to the cake, financial markets went on a tear.

“Yellen is on a glide path to near perfection, as she will probably end her term achieving the Fed’s dual mandate better than any other chair in history,” George wrote Mason University economist Scott Sumner as Yellen ended her term.

7. Faculty rack up a stream of honors

Members of the Haas faculty racked up a host of awards for their teaching, research, and service throughout the year. Assoc. Prof. Panos Patatoukas won Berkeley’s most prestigious teaching award, and Sr. Lecturer Sara Beckman was honored with a graduate student mentoring award. Outgoing Dean Rich Lyons received the Berkeley Citation for his outstanding service to the campus community, while Prof. Andrew Rose was honored with the Williamson Award for his service at Haas. Assoc. Prof. Jonathan Kolstad was named as a top health economics researcher under 40 and a top business leader under 40, and Asst. Prof. Juliana Schroeder was recognized as a “rising star” by the Association for Psychological Science. Prof. Laura Kray’s article on women as negotiators garnered an outstanding paper award, and a paper by professors Nancy Wallace and Rick Stanton won a prize for best paper in financial management.

8. Rankings recognition

The year brought a few rankings highlights for the Full-time MBA program, which rose to #6 in Businessweek’s Best B-Schools ranking. The Evening & Weekend program ranked #1 (again!) and our undergraduate program tied for #2 among US schools, both in the US News ranking. The Economist ranked our Berkeley MBA for Executives (EMBA) program #4 in the world.

9. Haas welcomed three rising academic stars

Three new assistant professors joined the Berkeley Haas faculty, with research interests that range from how financial news influences markets to the unintended consequences of mortgage market regulations to developing more accurate ways to predict consumer behavior. Left to right: Anastassia Fedyk and Matteo Benetton will join the Finance Group, while Giovanni Compiani will be part of the Marketing Group.

10. Milestones in sustainability and social impact

Cleantech-to-Market student Jahon Amir practices his presentation for his team, Opcondys.

Haas had long led the way on incorporating social impact and sustainability into business education. Twenty years ago this fall, five Haas MBA students founded the Global Social Venture Competition, which has helped 6,500 teams from 65 countries move closer to their vision for a better world (the 20th annual competition will take place in the spring). Also this fall the Center for Responsible Business celebrated its 15th anniversary, and the the Cleantech to Market (C2M) Program marked its 10th year of pairing student teams with scientists to push promising technologies to market.

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Following is written version of Fiat Vox podcast episode #46: “Berkeley Haas Chief of Staff Marco Lindsey lives like his 80-year-old self is watching:”

Every morning, Marco Lindsey wakes up in his East Oakland neighborhood — where he was born and raised. He puts on a suit and tie, packs his briefcase, chats with his neighbors and drives to work.

[Music: “Night Owl” by Blue Dot Sessions]

It might seem like a typical routine, but to Marco, it’s a lot more than that. It’s a way to show boys and young men in his community that they have possibilities — that who they can become and what they can achieve is much bigger than they might know.

“I’ll just say that when I was growing up, I never saw a lot of positive black male role models in the neighborhood,” says Marco. “There were a lot of blue-collar working-class people and, you know, that was great. But I never saw a doctor. I never saw an engineer. I never saw a black lawyer or anything like that.

“So, it kind of limited my thinking in regards to what I could aspire to be when I grew up. I just never saw it. And so, I never even thought to consider it.”

Marco has been the chief of staff to the dean at UC Berkeley’s Haas School of Business for five years. He’s worked at Berkeley for 11. And I think it’s safe to say that he’s a really driven person. He knows what it means to work hard.

As an example, Marco does these races called Spartan Races. They’re kind of like a hybrid of a triathlon and a hardcore CrossFit workout. He’s done eight of them so far.

“It’s almost all uphill running,” he says. “You’re crawling under barbed wire uphill. You’re scaling walls. It’s a lot of wall climbing. It’s a lot of climbing up ropes and climbing down ropes, monkey bars. It’s all these things, and basically the Spartan Race is designed to find your weakness and exploit it.”

Read more on UC Berkeley News.

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It’s that time of year when inboxes and mailboxes are flooded with pleas from a parade of worthy causes—from fighting hunger overseas to aiding victims of the latest natural disaster to funding your local library. Faced with so many needs, do you spread your donation dollars around, or focus on one cause to maximize your impact?

If you’re like most people faced multiple requests for help, you’re likely to divide your donations among requesters because it feels more fair, according to a new Berkeley Haas study. The upshot? You may end up giving less to each requester, but more overall, the study found.

Juliana Schroeder

The paper, co-authored by Berkeley Haas Asst. Prof. Juliana Schroeder and PhD student Daron Sharps and forthcoming in the Journal of Personality and Social Psychology, offers new insights into how people give help. The results could help groups seeking the best strategy to maximize donations.

“People seem to be primarily driven by fairness concerns when allocating help, and when people see more individual requesters, they give more,” said Schroeder, a psychologist in the Haas Management of Organizations Group who studies social interactions and previously looked at how donors give different kinds of help to people they view as less competent. “That was surprising to both of us, since it seems to contrast with the ‘identifiable victim effect.’”

Identifiable victims

That effect is the tendency people have to offer more help to a single, identifiable person with a compelling need than to a large, vaguely defined group such as “earthquake victims”—a phenomenon leveraged by every charity sharing heart-tugging stories and photos. It’s also been found that people don’t tend to give more to larger groups, even though the need is greater: one study by Nobel Prize-winning psychologist Daniel Kahneman found that people will give the same amount to a group of 2,000 as to 200,000.

Yet prior studies did not look at whether people were considering each request separately—a psychological phenomenon known as “unpacking”.

“We know that you might get more donations for ‘Tommy’ who was affected by the earthquake than for a million people who were affected by the earthquake, but what about ‘Tommy’ compared with ‘Tommy, Ana, and John’?,” said Sharps, who served as lead author on the study. “We found the important part is the identifiable nature of the recipient, not that it’s one versus many requesters.”

A clear pattern

The researchers studied giving behavior across nine experiments involving 3,100 people, most of whom were recruited through an online platform. They found a clear pattern: When given a choice of how to allocate donations, almost 80 percent of people chose to distribute funds across multiple recipients, with the majority giving some to every requester—and half of those distributing funds equally (researchers only looked at up to ten requesters). Only about 20 percent of givers funneled all of their donation to one recipient.

In an initial experiment, participants were shown five real profiles of women seeking money to buy seeds for the upcoming farming season via Kiva.org—an online platform that allows people to lend money to low-income entrepreneurs in 80 countries. The participants were asked how they’d distribute $100. People not only preferred to spread the money among all the women, but rated that strategy as the fairest.

“People would rather give $10 each to 10 people than choose four people to give them $25 each,” said Sharps.

Deciding what’s fair

Even when people were presented with requesters with different levels of neediness, they tended to give more to those with greater needs but still thought it was most fair to distribute the money rather than concentrate on one needy person. When asked how they’d divide funds between women who were all trying to raise $600 for business equipment—but were starting out with unequal amounts from $100 to $400—just 16 percent of donors chose to give everything to the neediest requester, while 81 percent distributed funds among all the women. What’s more, only 4 percent split up the money so that the women ended up with the same amount of funding.

Having worked in philanthropy earlier in her career, Sharps said she was surprised that so many people chose breadth over depth, and that they paid more attention to distributing their donations equally than to equal outcomes. “Making an impact was a very important part of what we thought about in the world of philanthropy, and concentrating donations would seem to make a greater impact in some cases,” she said. “But people were more focused on allocating their help fairly than on the requesters’ actual outcomes.”

When asked about their motivations in one of the experiments, participants said that dividing funds equally was not only more fair, but was also more impactful and efficient, would be more appreciated, and would leave helpers with less guilt. A further analysis by the researchers found that only participants’ beliefs about fairness—rather than impact or efficiency or other motivations—statistically predicted their choice to distribute donations. This indicates that fairness may be the primary psychological driver of decision to distribute help, the authors concluded.

More requests = more giving

In another set of experiments, the researchers used real profiles from various online platforms that featured people as well as pets in need of medical care or support. The participants were given small amounts of real money to donate—some were told they had to donate it all, but in other cases were told it was optional and they could keep what they didn’t donate.

Whether the donations were optional or mandatory, people spread the money around. For those who were told their donations were optional, the total amount they donated increased with the number of people or animals to which they could donate. People were just as likely to distribute donations to two requesters as to ten requesters—although they gave less per requester as the number increased.

In another scenario, one group of participants was shown profiles of four pets and asked to consider donations to each of them, while another group was asked to donate to the “Pets in Need” charity to support the same four animals. Those who considered the animals separately gave more overall. Researchers found the same outcome when people were asked to donate polio vaccines to five individual children versus a group that would vaccinate five children—they gave more to the five individual children than to the group.

This finding has several implications for organizations, Sharps said. Charities might consider ways to bring in the stories of multiple people into their donation appeals, and ask people to consider each one individually, rather than lumping them together. They might also find ways to amplify fairness concerns—such as a message for donors before they leave the page: “Are you sure you want to leave this person unhelped?”

“People don’t like to feel like they’re leaving some needy requesters unhelped,” Sharps said.

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A novel new way of determining the value of employee stock options has yielded some surprising insights: Options granted to woman and senior managers are worth more because they hold them longer. And options that vest annually rather than monthly are worth more for the same reason.

The new valuation method, which combines standard option theory with real-world observations of what employees actually do with their grants, gets at a knotty problem: Even though stock options are one of the most common forms of compensation, companies don’t really know how much granting options costs them.

“We’ve come up with a practical method of valuing stock options that takes into account actual behavior of employees,” says Richard Stanton, a Berkeley Haas professor of finance and real estate who holds the Kingsford Capital Management Chair in Business.

The new approach is laid out in “Employee Stock Option Exercise and Firm Cost,” forthcoming in the Journal of Finance and co-authored by Berkeley Haas Prof. Nancy Wallace and New York University Assoc. Prof. Jennifer N. Carpenter. Their analysis also draws on behavioral economics, which considers the effects of psychology on financial decisions.

A behavioral economics approach

Among their original findings: Options awarded to women cost companies 2 to 4 percent more than those granted to men, who tend to exercise their options faster. And awards to the most senior employees cost 2 to 7 percent more than grants to their lower-ranking colleagues—again, because the execs hold onto them. In addition, options cost companies significantly more when they are set up to vest less frequently—that is, reach the threshold date when they become eligible to be exercised. A shift from an annual to a monthly vesting date reduces option value by as much as 16 percent because people exercise the options earlier and more often.

According to a recent survey by Meridian Compensation Partners, 42 percent of companies responding reported they awarded stock options to senior executives. And options represent more than 20 percent of CEO pay, according to one estimate. Options allow holders to buy a specific stock at a set price until a predetermined expiration date. The basic challenge in determining the cost of employee stock options is that their value depends on how long they are kept. In general, the longer they are held, the greater the cost to the company that issued them. Consequently, the key to valuing them is to predict accurately when they will be exercised. “How much the options are worth depends on what the employee is going to do with them,” Stanton notes.

A vast literature examines how to determine the value of stock options traded on exchanges. But employee stock options are a special breed with their own special characteristics. For that reason, the valuation methods originally developed for exchange-traded options are imprecise when applied to the options companies award their employees. 

Standard option theory takes into account several factors to forecast when options will be cashed in. But it was largely developed through studies of exchange-traded options, making it out of whack for employee stock options for several reasons. For one, employee stock options can’t be traded on the market—the only way employees can dispose of them is to use them to buy the underlying stock. Second, they can only be used during a multi-year window that starts when they vest and ends when they expire. Third, employees can’t easily protect themselves from the risk of having so much of their wealth tied to their employer’s stock, since the only way to reduce the risk is to exercise the option, and that impacts its value.

New model factors in behavior and risk

To arrive at a more accurate way of estimating when employees would exercise stock options, Stanton, Carpenter, and Wallace, the Lisle and Roslyn Payne Chair in Real Estate Capital Markets, analyzed a unique set of data that included complete employee stock option histories awarded to some 290,000 employees from 1981 to 2009 at 88 publicly traded corporations. The dataset gave them an unprecedented fine-grained look at option-exercise behavior. The authors then constructed a mathematical model of exercise rates that took relevant factors from standard theory and added factors related to the riskiness of the options, based on portfolio theory, along with some additional behavioral factors and information on the terms governing options grants, along with characteristics of issuing companies and option holders.

Their findings included some surprises. For example, vesting frequency had an especially powerful effect on option cost. The obvious reason is that employees are able to exercise options earlier when they vest more frequently. But something else may be at work—employees receive an email when options vest, which may prompt them to pull the trigger.  “When people’s attention is drawn to their holdings, they’re more likely to make a decision,” Stanton suggests. Similarly, men may exercise options earlier and more often than women because they are more confident making financial decisions. That finding is in line with influential work by Berkeley Haas Prof. Terrance Odean, who found that male investors trade more frequently than women—behavior that reduces their net returns.

But why do high-ranking employees hold their options longer than lower-ranking colleagues? One reason may simply be that they are wealthier and don’t need a stock options windfall to pay for a home renovation or an expensive vacation.

Almost ten years in the making, the research was funded by the Society of Actuaries in response to regulatory calls for improved employee stock option evaluation methods.

More from these researchers

Minority homebuyers face widespread lending discrimination

A decade after housing bust, mortgage industry is on shaky ground, experts warn

Nancy Wallace named chair of the Fed’s model validation council

A house of cards: Prof. Nancy Wallace warns of risk in real estate securities

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A prototype of the Aurora Space Station, which will host four guests and two crew traveling in low orbit. (PRNewsfoto/Orion Span)

Frank Bunger, MBA 18, dreamed of space as a child. Today, he’s pursuing that dream as co-founder and CEO of Orion Span, a startup that plans to build the Aurora Space Station to launch travelers into space 200 miles above the earth’s surface by 2021.

Bunger, who started Orion Span as a Haas student, has a goal to raise $2 million by Feb. 5 on SeedInvest, an online investment service, so the company can begin building a prototype. The station will accommodate six people—two crew members and four guests, who will pay $12.5 million each for the 12-day trip. So far, 26 people have put down the $800,000 deposit.

We recently sat down to discuss Bunger’s space travel plans.

Berkeley Haas News: Tell me a little bit about your interest in space.

Frank Bunger, CEO of Orion Span

Frank Bunger:  Space has been a passion of mine since I was a little boy. I was born in ’79 so I missed the Space Race. I remember being a little kid and reading in the history books about these journeys to the moon; I was like, “Wow! What an exciting time!” At that point, the 80s, it seemed like we were just on the cusp of creating this ecosystem in low-Earth orbit with the International Space Station and none of that came to pass because the costs were just far too astronomical for commercial endeavors to take root.

BHN: How did the idea for your startup happen?

FB: When I got to Haas I thought, “Okay, what could I do with the time I have left in this world and the skills I’ve learned as an entrepreneur to move this forward?” On the launch front, there are a lot of players like Space X that are attempting to significantly cut the price of launch and improve access to space. And in the destination business there is a field of players who were making things more expensive than they needed to be and then, by extension, they have to charge their customers more. That’s where I wanted to jump in first.

BHN:  Who did you go to for help after you came up with the idea?

FB:  When I came up with this concept in the summer of 2017 I started floating ideas. My first conversation was with a UC Berkeley faculty member who later became an advisor, Professor Tarek Zohdi from the mechanical engineering department. My first question to him was, “Can I 3-D print this whole thing, and just how cheaply can I build it?” Through many conversations, it turned out that we could probably 3-D print a good portion of it through known technologies. I eventually found some of the best people at NASA at the Johnson Space Center in Houston who have been in the industry for decades, who have done this before, who worked on the International Space Station, and told them what I had in mind. We started to slowly form a team.

BHN: So how much is it going to cost to build the station?

FB: NASA and other commercial entities are spending a lot themselves  in order to make something operable. I knew that space travel could be done far, far more cheaply—$65 million to build the whole thing. It’s still relatively expensive, but compared to others, that is about an order of magnitude less than any of our competitors.

BHN: Why did you choose a low-Earth orbit destination?

FB: It’s just closer, so the amount of energy to reach that point is pretty much as low as it’s going to get to achieve orbit. So that’s one thing that keeps cost down on the launch front. Number two, you get awesome views. Lastly, the Earth’s magnetic field keeps you shielded from the Earth’s natural defenses.

BHN: What classes did you take at Berkeley Haas that helped you start Orion Span?

FB: Entrepreneurship lecturers Kurt Beyer and David Charron were extremely helpful. The venture capital class I took, too, helped while I was forming the company.  And all the other classes around Haas helped, including some of the marketing courses—specifically strategic marketing. I asked the professor for advice many times and I think we really nailed it the marketing, at least at the get-go. We did a lot of things right early on.

BHN: How did classmates react to your business plan?

FB: I think some think I’m kooky and some think it’s cool. It’s a wide range.

BHN: What does the space station look like?

FB: It has the volume of a large, private jet—of a Gulfstream. It’s about 12-feet wide and 35- to 40-feet long, and cylindrically shaped because that’s what fits into a rocket. The key to a space like this is to keep it as open as possible so the guests sleep in these large-ish kind of sleeping pods. It’s kind of like a small cruise ship. I think that’s probably the best analogy.

BHN: What will your guests do once they’re up there?

FB: People want to feel what it’s like to be a professional astronaut. So they will spend a good part of it being citizen scientists. We want to grow food. And we’re also going to have just some fun activities. Even something as mundane as ping pong gets a lot more exciting in zero gravity because the ball goes everywhere, as does the paddle.

BHN: Do you worry that space travel is very elitist?

FB: Commercial aviation in the 1920s was a game for the rich. Space travel today is going to be a game for the rich. It will not be so forever. My goal is to make it accessible to everyone, but it takes time. The biggest bottleneck cost remains launch so until we see the price of launch come down, it’s going to remain something for the wealthy.

BHN: Will you go up with the first crew?

FB:  I’ll go up within the first year but not first because if I go up, that’s 10s of millions of dollars we’re not making.

BHN:  What do guests do to prepare to go?

FB: The minimum training time will be two weeks and the maximum will be three months, and we’re going to ultimately customize it per guest. The two-week training will be like diving training: you spend 80% of your time training on what to do in the unlikely event that things go wrong.

BHN: After the prototype is built, how much do you have to actually test it?

FB:  A lot. The Space Act Agreement from NASA that provides access to facilities as well as know-how from their staff to test the hell out of the station launch. Our first milestone is to build a ground model, which is just going to be a demonstration that’s not flight-worthy. The second milestone is a scale model which will actually go up (empty with a payload) into orbit and serve as a test bed for us. The final step is to build the full-size space station. It goes through about a year of testing: vacuum chamber, pressure testing, materials testing, strength testing, all that kind of stuff, and NASA has facilities for doing that.

BHN: How do you get insurance for a business like this?

FB: There’s actually insurance companies out there that do this stuff, believe it or not. Yeah. They insure rockets and/or payloads, but we’ve already talked to two different providers that can insure this.

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Chou Hall is officially the country’s greenest academic building, having earned TRUE Zero Waste certification at the highest possible level along with a LEED Platinum certification for its energy efficient design and operation.

The TRUE Platinum Zero Waste certification came after more than a year of dedicated waste sorting, composting, and other efforts to divert over 90 percent of Chou’s landfill waste. The official notice came from Green Business Certification Inc. (GBSI) on Dec. 20, following an on-site audit by the U.S. Green Building Council.

“The whole team is beyond excited to lead the way with the country’s greenest academic building,” said Danner Doud-Martin, the staff lead of the Haas Zero Waste Initiative and associate director of the International Business Development (IBD) Program at Haas. “It’s been such a journey—more than two years of trying to get all of our stakeholders on board with behavioral changes. It’s been a significant challenge, but we are so proud of all that we’ve accomplished.”

“A mark of leadership”

The Chou Hall Zero Waste Initiative is a joint effort led by a multidisciplinary team of graduate and undergraduate students working closely with Cal Zero Waste, Haas faculty and staff, facilities management, and building vendors to ensure that building operations are designed for successful waste diversion.

“Zero waste is a culture change for organizations and we’re thrilled to see that Berkeley Haas students, faculty, and staff have wholeheartedly committed to it,” said Stephanie Barger, director of TRUE at the U.S. Green Business Council. “TRUE certification is a mark of leadership and ongoing commitment to advancing a zero-waste economy.” About 25 percent of the more than 100 TRUE-certified facilities have achieved TRUE Platinum, Barger said. Chou Hall is the only academic building to achieve the honor.

Staff lead Danner Doud-Martin (right) with Michelle La of Cal Zero Waste at a recent Chou Hall zero waste audit.

During their December visit, the final step toward certification, the Green Building Council interviewed stakeholders involved with the project—including Courtney Chandler, Haas chief strategy and operating officer, former Haas COO Jo Mackness, and Haas Management Lecturer Frank Schultz, among others.

Separately, GBCI also announced this month that Chou received LEED Platinum certification for its architectural design, construction, and functioning of the building, earning 85 points—well above the 80 points required for the Platinum rating. Points are allotted in areas such as water efficiency, energy use, construction materials used, indoor environmental quality, and design innovation. Haas is also pursuing a third designation, WELL certification, given to buildings that promote user health and well-being.

“Going for all three certifications at the highest level is incredibly ambitious,” Chandler said. “With WELL certification we hope to achieve a trifecta. We are so proud of the work that everyone has done to make Chou Hall the greenest academic building in the country, and we hope that our work will inspire and guide all of the UC campuses and other institutions across the country.”

“A wonderful confirmation”

TRUE Zero Waste certification levels include Certified, Silver, Gold, and Platinum. To achieve TRUE Platinum, the Chou team earned 69 out of the 70 credits that they applied for, providing a narrative and evidence for each credit. Credits included everything from composting food scraps to tracking the purchase of environmentally preferred products to providing employees with access to zero-waste training to reducing the use of hazardous waste chemicals.

Student team lead Jessica Heiges sorting trash during the recent Zero Waste audit.

Jessica Heiges, the Chou Hall Zero Waste Initiative student lead and a candidate for the Master’s of Development Practice program at the College of Natural Resources, called the certification “a wonderful confirmation that the enormous amount of hours that the community devoted toward the effort was finally validated.”

“This was was a very difficult initiative because we are the first ones to go through it,” she said. “There were no best practices, no industry trends that we could fall back on or implement with our eyes closed. We had to address every single credit and the underlying motivation behind each credit, and had to go through it in a much more meticulous manner because it was all brand new.”

With the certification earned, Doud-Martin said the committee will now draft a “best practices” manual as a guide for other UC campus buildings that want to follow in Haas’ footsteps. Heiges said she’s excited to meet with other groups on campus to share what they’ve learned.

A shift toward reusing and reducing

The zero waste certification process began as soon as Connie & Kevin Chou Hall opened to students in August 2017.

“We initiated the TRUE Zero Waste certification for Chou Hall as our beacon to demonstrate that zero waste is definitely achievable for the entire campus,” said Lin King, manager of Cal Zero Waste, which manages waste for all of campus and is aligned with the University of California’s commitment to move toward zero waste by 2020.

In August 2018, Haas participated in its third week-long TRUE Zero Waste audit. Waste audits—a messy, hands-on endeavor that requires separating compostable items like soiled paper towels and paper cups from recyclable cans and bottles. The audits are a required component to better understand the waste flow and provide a benchmark for improvement.

The team used audit data to make more zero-waste adjustments and recommendations, including working with Café Think and the Evening & Weekend MBA program to change student snack offerings to bulk items; implementing a program to donate Café Think’s coffee grounds to UC Berkeley’s Gill Tract Farm for garden compost, and replacing the bathrooms’ one-roll toilet paper dispensers with two-roll dispensers to conserve toilet paper. (Custodial staff are less likely to toss an almost-spent roll if there’s a second one in the dispenser, Doud-Martin said.)

Doud-Martin said the next phase will be to encourage a shift from recycling and composting toward reusing or reducing single-use items such as “to go” containers and coffee cups. One recent example is a pilot with Café Think, which allowed customers to put down a $1 deposit for a mason jar of overnight oats and yogurt that can be refilled at the cafe. “Our goals are mighty,” she said. “But this shift would align us with more of a true zero-waste model.”

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The Berkeley Master of Financial Engineering Program ranks #2 in the world, according to a new ranking of the top 15 quant finance masters programs published by Risk.net on January 16.

Risk.net’s ranking is based on eight metrics, ranging from acceptance rate, job offers, and salaries to faculty research and faculty-student ratio. Particular weight was given to average graduate salaries — $159,402 for Haas MFE graduates — and a strong post-commencement employment rate — 99% of Haas MFEs.

View the full report.

In other reports, the Berkeley MFE is ranked #2 by QuantNet and #1 by TFE Times.

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Prof. Severin Borenstein has been appointed by Gov. Gavin Newsom to the board of the California Independent System Operator (CAISO), which oversees the state’s massive electric power system, transmission lines, and wholesale electricity market.

Borenstein is the E.T. Grether Professor of Business Administration and Public Policy at the Haas School and faculty director of the Energy Institute at Haas. He said he is honored by the appointment.

“This is an exciting time for the ISO as the industry develops approaches to reliably integrate renewable energy,” Borenstein said. “The board will have an important role facilitating opportunities for beneficial trade with the rest of the western market and continuing to support California’s climate goals.”

The California ISO is charged with ensuring that the state’s power grid—one of the largest and most modern in the world—operates reliably and transparently, and maintains an accessible wholesale energy market. The CAISO is a nonprofit public benefit corporation operating governed by a board of five members who serve staggered three-year terms.

Severin Borenstein

An economics professor at Berkley Haas since 1996, Borenstein’s recent research has focused on energy markets, including alternative models of retail electricity pricing, the impact of oil prices on gasoline markets, and the economics of renewable energy and climate change. He is also an outspoken, independent voice for climate change policies that are both efficient and are economically sound.

Borenstein has long been involved with California energy policy. He chaired the California Energy Commission’s Petroleum Market Advisory Committee from 2015 until it was dissolved in 2017. From 2012 to 2013, he served on the Emissions Market Assessment Committee, which advised the California Air Resources Board on the operation of California’s Cap and Trade market for greenhouse gases. He was a member of the Governing Board of the California Power Exchange from 1997 to 2003, and served on the California Attorney General’s gasoline price taskforce in 1999-2000.

Highly sought after as a media commentator, op-ed contributor, and blogger, Borenstein most recently discussed the implications of the Pacific Gas & Electric bankruptcy with more than a dozen news outlets, from the Financial Times to Bloomberg to KQED’s Forum. (Read his Berkeley News interview here.)

While the CAISO will not be directly involved in the PG&E bankruptcy, it will be required to ensure that the grid continues to operate seamlessly no matter which public or private utilities are in the mix. That includes preparing for changes wrought by climate change, and reliably integrating renewable power from wind and solar.

Borenstein’s appointment requires confirmation by the Senate.

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L-R: Shane Puthuparambil, Berklee Welsh, & Tim Tembrink of the HBSA Sustainability Committee.

Chou Hall uses about half as much water per square foot as other Haas buildings. All of Cafe Think’s coffee grounds are used as garden compost by UC Berkeley’s Gill Tract Farms. And Haas students print 77,000 pages—or about four tons—of paper annually.

Those are just a few facts unearthed in the first-ever student-authored Berkeley Haas Sustainability Report, published this week by the Haas Business School Association’s (HBSA) Sustainability Committee. The report is a sweeping overview of where the school stands with its sustainability efforts in its buildings, classrooms, and centers.

“This was our way of going beyond ourselves to give back to our business school,” said Tim Tembrink, BS 19 and vice president of sustainability for the HBSA. Tembrink worked on the report with Berklee Welsh, BS 20, and Shane Puthuparambil, BS 22, (environmental science and business.) “Writing the report was a journey from the beginning to the end of the semester,” Tembrink said. “We spoke to every single person we could find and everybody was so interested in the report and interested in helping us.”

Tembrink said he hopes that the 25-page report will be used for internal purposes or for Haas to showcase its sustainability-related initiatives outside of Haas.

Taking a leadership role

Robert Strand, executive director of the Center for Responsible Business, and Prof. Laura Tyson, former Haas dean and the faculty director for the Institute for Business & Social Impact (IBSI), commended the students for their work. “We stand at a critical point in history,” they wrote in a letter published with the report. “The sustainability challenges confronting the world are significant and mounting faster than anticipated. Berkeley Haas is well positioned to assume a leadership role among business schools to address these challenges and leverage the power of business to drive positive change.”

The report includes details of energy, waste diversion, and water use in different campus buildings—including Cheit Hall, the Barbara & Gerson Bakar Student Services Building, and the Faculty Building, with a special focus on Chou Hall, which was just certified as the greenest business school building in the country. Chou Hall recently earned TRUE Zero Waste certification at the highest possible level along with a LEED Platinum certification for its energy efficient design and operation.

The team worked closely with UC Berkeley campus groups to collect data on energy and water use, waste diversion, and supplies usage. UC Berkeley’s Energy Office, for one, has developed an energy dashboard to help monitor energy use anomalies across campus. (Haas is aligned with new campus-wide energy goals, include reducing energy use intensity by 2% annually, adding renewable solar energy, and shifting to 100 percent clean electricity from off-campus sources.)

Gathering the data

Welsh said the most difficult part of the project was compiling information across the U.C. Berkeley campus and beyond.  “From accessing individual water meter data, to interviewing Cafe Think staff, facilities managers, and more, we found that no single individual had access to all of the information we needed,” she said.

Writing the report was of particular interest to Tembrink, who is launching a line of women’s clothing called Foundationals this spring. Foundationals’ first product, a sweater to be sold on the company’s website, aligns with Tembrink’s commitment to the environment. It’s made from 48 percent recycled water bottles and 52 percent recycled cotton. It will also be produced in a LEED-Platinum certified factory in Vietnam. “It’s a dream factory,” he said. “With regards to human rights and labor standards this factory was amazing.”

After Tembrink and his team graduates, they hope that the sustainability report will serve as a benchmark—and that future HBSA students will update the work annually.

“By compiling data in one place, we hope to provide students, staff, and faculty with a clear understanding of where Haas excels, and areas in which we need to improve in order to remain leaders in the fields of sustainability and business,” Welsh said.

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Haas Dean Ann Harrison. Photo: Noah Berger

Dean Ann E. Harrison will share her priorities for her first 90 days in a discussion with former Dean Laura Tyson to kick off the spring Dean’s Speaker Series next month.

The event, planned during the anniversary week of the Haas Defining Leadership Principles, will be held Tuesday, Feb. 5, at 12:30pm in Chou Hall’s Spieker Forum.

It’s the 9^th  anniversary of the principles: Question the Status Quo, Confidence Without Attitude, Students Always and Beyond Yourself, four phrases that have come to be widely associated with Berkeley Haas.

In conversation with Tyson, Harrison will share her vision for Haas, her take on the Defining Leadership Principles, and her leadership approach.

Harrison began her tenure as Haas dean this month. The former William H. Wurster Professor of Multinational Management and Professor of Business Economics and Public Policy at the University of Pennsylvania’s Wharton School, Harrison has a deep Berkeley history. She earned her bachelor’s degree from UC Berkeley with a double major in economics and history in 1982. She also served as a professor of Berkeley’s Department of Agricultural and Resource Economics from 2001 to 2011.

A Q&A will follow the talk, which will be posted after the event on the DSS web page.

Registration is required for the free event, which is open to the Haas community and invited guests.

Doors will open at noon and a light lunch will be served.

Upcoming events in the Dean’s Speaker Series include:

Laurene Powell Jobs

(First Annual Chris Boskin Deans’ Speaker Series in Business and Journalism)
A conversation with Laurene Powell Jobs, Founder and President of Emerson Collective

Thursday, February 7
12:30-1:30pm
Spieker Forum

David Aaker

Professor Emeritus, Haas School of Business

Tuesday, March 5
12:30-1:30pm
Spieker Forum

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Michele Gelfand, a University of Maryland psychology professor, presents on her work examining “tight” vs “loose” cultures at the inaugural Berkeley Haas Culture Conference.

More than 100 senior business leaders and top scholars from around the world gathered at the Haas School last week to kick off the Berkeley Haas Culture Initiative, which will explore the role of culture and its impact in and across organizations.

The inaugural event was a two-day conference that brought together executives from Facebook, Netflix, Zappos, Pixar Animation Studios, Deloitte, Maersk, and other “culture-aware” companies with academics from a wide range of disciplines, including economics, anthropology, sociology, and psychology.

Jennifer Chatman and Sameer Srivastava

The initiative is the brainchild of Prof. Jennifer Chatman and Assoc. Prof. Sameer Srivastava of the Haas Management of Organizations Group, who aim to build a community of researchers and practitioners interested in how culture affects everything from hiring to promoting to the bottom line of corporate performance and strategic success.

“We invited a set of organizations that are already devoted to thinking about culture and asked them to explain the problems they are having on the ground, and we invited top academics to offer up a set of approaches to studying culture,” said Chatman. “What we are interested in is developing a shared research agenda to address some of the challenges we haven’t yet been able to solve.”

Launching the Berkeley Haas Culture Initiative

The Berkeley Haas Culture Conference was the first in what Chatman and Srivastava say will be an ongoing series of events, interdisciplinary research collaborations and industry partnerships, as well as communication exchanges on best practices. The idea was to start by taking stock of a field that has become increasing fragmented as it has expanded, Srivastava said.

“Economists study culture, psychologists study culture, and sociologists study culture—all in different ways,” Srivastava said. “At the same time, companies are developing innovative practices related to culture, and it’s often hard to disentangle what works and what doesn’t. We wanted to bring everyone together to start a conversation.”

Berkeley Haas Dean Ann Harrison

Haas Dean Ann Harrison welcomed conference attendees by highlighting the school’s commitment to its own distinctive culture.

“You don’t have to be here very long to realize that we at Haas believe that our culture is what really sets us apart,” she said. “If we ask our students why they chose to come here, most say ‘We came here because of the culture.’ And they all refer to our Defining Leadership Principles.”

UC Berkeley at the center of organizational culture research

Attendees noted that UC Berkeley has long been a leader in the study of organizational culture. “It’s really appropriate to have a conference like this here at Berkeley,” said Michael Morris, a cross-cultural psychologist and professor of management at Columbia University. Much of the classic work on organizational culture and cultural sociology came out of the university, he said.

Chatman and Charles O’Reilly, a Haas professor emeritus now at the Stanford Graduate School of Business, are pioneers in the field (both are Haas PhD alumni). Influential work has also come out of Berkeley’s anthropology, sociology, and psychology departments. More than two dozen Berkeley faculty members—including a dozen from Haas—were among those in attendance at the conference.

Prof. Chatman presented on how to measure culture.

New data, new methods

Over two days, more than 100 invited attendees tackled a breadth of issues around organizational culture. Academics described their latest research with an emphasis on how data and new research methods, such as using computational approaches and unobtrusive culture measures of culture, are opening up opportunities for companies to better understand how their overall culture—and subcultures within departments or teams—affect their organizations.

For example, researchers are analyzing words used in employee emails for signs of cultural fit among individuals. They can use apps to unobtrusively capture group conversations or obtain video from body cameras. They’re also looking at historical data, such as folklore in pre-industrial countries, to better understand modern social norms. Social media platforms such as Glassdoor, too, have become a rich source of data.

“What is amazing about the papers presented here—and what is very different from 20 years ago—is the quality of the research, the use of lab and field studies, the use of archival data and ethnographies, and the use of sophisticated measurement techniques,” O’Reilly said.

Challenges on the ground

Bethany Brodsky of Netflix discussed the company’s distinctive culture.

For their part, company speakers spoke candidly about the challenges around culture they are confronting as their businesses evolve, whether through mass hiring, mergers, new business strategies, or changes in leadership.

“Every time we add employees or a group of employees, our culture shifts,” said Inyong Kim, the vice president of employee experience at Adobe, who described how and why the company abolished formal performance reviews in favor of the “ongoing check-in.”

Ever-changing cultures was a theme echoed by others. For Deloitte, the question of how to transition a 150-year-old company for the future meant embracing “courage” as a key cultural value and embedding the attribute throughout the firm, said Jen Steinmann, Deloitte’s chief transformation officer. “Our three tenets of culture are the need to speak openly, support one another, and act boldly,” she said.

Bethany Brodsky, VP of talent for Netflix, talked about the enormous challenges that came with the company’s massive hiring spree after it launched simultaneously in more than 130 countries three years ago.

Grail CEO Jennifer Cook

“When you have all these new people, how do you transmit [your] culture?” asked Brodsky. A word like “feedback,” she noted, doesn’t always translate. “It Russian, it translates closest to ‘criticism,’” she said.

Jennifer Cook, MBA 98 and the CEO of cancer detection startup Grail, said her experiences at six companies of varying sizes over 15 years have taught her that culture is a key leadership tool. “What I’ve realized in looking back is that there were any number of organizational themes and challenges that I had faced, and our teams had faced, for which culture was the relevant solution,” she said.

Seeds of a shared agenda

Bob Gibbons, a professor of organizational economics at MIT’s Sloan School of Management, said he is pleased that the culture initiative’s goals match his own agenda of nudging his field in an applied direction. In his case, that means addressing the question of “How can an economist help a fixed set of people collaborate better together?”

“People in the world know that culture is a thing and that it matters, and they are looking to us for help,” he said. “There’s an enormous academic opportunity, and it’s super important to do it across a whole bunch of disciplines that are represented in this room. I loved hearing that part.”

Founding sponsors of the Berkeley Haas Culture Initiative include Goldman Sachs, Adobe, Deloitte, Maersk, Spencer Stuart, and the UC Investments Office.

Assoc. Prof. Sameer Srivastava

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Eleni Kounalakis, California’s 50th Lt. Governor, at her Jan. 7 inauguration at Tsakopoulos Library Galleria in Sacramento. Photo: Drew Altizer

The Haas alumni community can now count California’s first elected female lieutenant governor among its ranks, after Eleni Kounalakis, MBA 92, took the helm on Jan. 7.

Kounalakis became the state’s 50^th lieutenant governor at a crowded ceremony attended by newly minted Governor Gavin Newsom, who swore her in, and Congresswoman Nancy Pelosi. Serving as master of ceremonies was former Michigan governor and UC Berkeley alumna Jennifer Granholm, BA 84 (political science).

“I’m thrilled that the first woman to be elected as lieutenant governor is a Berkeley MBA,” said Peter Johnson, assistant dean of the full-time MBA program and admissions, who met Kounalakis while he was living and working in Budapest and she was serving as former President Barack Obama’s U.S. ambassador to Hungary.

Johnson said he was always impressed by her leadership.

“Her ability to question the status quo, even in the traditional role of ambassador, made her stand out among the diplomats serving in Hungary,” he said. “I know she’ll bring that same savvy and enthusiasm to the office of lieutenant government.”

Eleni Kounalakis (middle) surrounded by Haas alumni and community (including former Dean Rich Lyons and Peter Johnson, assistant dean of full-time MBA program and admissions) at a 2011 event held at the Ambassador’s residence in Budapest in 2011.

No greater investment than education

In her new role, Kounalakis will have a hand in guiding the future of UC Berkeley, as a member of the UC Board of Regents and the California State University Board of Trustees. During her inauguration speech, Kounalakis said she would focus on protecting California’s environment and fight for accessibility and affordability in public education.

“Civilized societies recognize that the path to wisdom is through education and that’s very personal to me,” she said.

She recounted her father’s journey to America from his village in Greece as a teen.

With no money or English skills, her father landed in Lodi, Ca., working as a field hand and attending Sacramento State for just $62 per semester, including the cost of books, she said.

“Think about that: $62 a semester. One job, no loans,” she said. “How else could he have gone from the fields to the classroom?” Her father, Angelo Tsakopoulos, worked his way up from the fields to become one of the state’s largest land developers and Democratic donors.

There is no greater investment in the future of our state than investing in education, she said. “As your lieutenant governor and in my role as UC regent and CSU trustee, I am committed to expanding access to public education here in our state. It is wise. It is smart. It’s the right thing to do. And it is most important now as we face the rapidly changing digital economy.”

“What it looks like for a woman to ‘lean in'”

Kounalakis was born and raised in Sacramento. After earning her undergraduate degree from Dartmouth College, she earned an MBA at Berkeley Haas. Dan Sullivan, senior director of academics at Haas, met Kounalakis during the program’s orientation in 1990.

“The Class of 1992 was full of strong personalities, but Eleni stood out immediately,” he said. “She was just delightful: bright, engaging, and super high energy. And she was always warm, kind, and thoughtful towards even the most junior members of the staff, as I was at that time.”

Kounalakis spent 18 years helping to build her father’s Northern California real estate company, AKT Development Corp. In 1992, she became a staff member of the California Democratic Party and she served four times as a delegate to the Democratic National Convention and as an at-large member of the California State Democratic Central Committee.

Lt. Gov. Eleni Kounalakis was former US ambassador to Hungary under President Obama.

At AKT, where she served as president, she helped raised more than $1 million for Hillary Clinton’s presidential campaign before backing former President Barack Obama.

In 2010, her career shifted focus, as she was sworn in as former President Obama’s U.S. ambassador to Hungary. At 43, she was one of the youngest women to head a U.S. embassy at a time when Hungary was grappling with the rise of nationalism and antisemitism.

She recounts her family’s story and her experience as a diplomat in the 2015 book Madam Ambassador: Three Years of Diplomacy, Dinner Parties, and Democracy in Budapest. In a review, Janet Napolitano, UC President and former U.S. Secretary of Homeland Security, wrote “If you want to know what it looks like for a woman to ‘lean in,’ read Ambassador Kounalakis’s book. It is an inspiring example of a businesswoman-turned-diplomat taking every opportunity to effectively advance the interests, values, and security of our country.”

Ted Janus, BA 83, MBA 94, and principal at J Capital, who has known Kounalakis for 20 years and serves with her on the Haas School Board, said it’s no surprise to him that she won the election.

Both Kounalakis and her husband, journalist Markos Kounalakis, BS 78 (political science), a visiting fellow at the Hoover Institution at Stanford University, view themselves as public servants and elected office was “a natural extension of what Kounalakis has been doing all along,” he said.

“She’s incredibly hard working,” Janus said, noting the 58-county listening tour she embarked on during her campaign. “She’s an excellent communicator and she’s very capable at business, capable in politics, and a very capable ambassador. I think she’s a winner and she’s just getting started.”

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(L-R) Mary Balingit, undergraduate assistant director of admissions, advised the National Diversity Case Competition winners Alec Li, Claudia Diaz, Kiara Taylor, and Frances James. Photo: Jim Block

A plan to build an inclusive new small-format Target store in Oakland netted a Haas undergraduate team a first-place tie with the host school at The National Diversity Case Competition (NDCC). The 8th annual event was held at Indiana University’s Kelley School of Business Jan. 18-19.

The Team: Team captain Claudia Diaz, BS 19, Kiara Taylor, Alec Li, and Frances James, all BS 20. The team’s advisor was Mary Balingit, assistant director of admissions & outreach for the undergraduate programs, and the undergraduate lead for inclusion & diversity. Faculty coaches were Haas Lecturers Steve Etter and Krystal Thomas, along with Erika Walker, assistant dean of the undergraduate program.

The Field: 168 undergraduates from 42 business schools around the country, competing for a total of $20,000 in prize money.

The Challenge: Choose a neighborhood and develop a strategy for the location, design, and merchandising of a new small-format Target store, as well as address ways to help the community integrate Target into their neighborhood. Target asked the students to consider community engagement, marketing, the supply chain, delivery options, finance & logistics, and diversity & inclusion.

The team’s plan: To build a small-format Target in downtown Oakland, called The Town’s Target, with a locally-owned café to be operated by a local food entrepreneur. The cafe would double as an incubator—a residency program that would allow that local entrepreneur to build clientele and develop an exit strategy to launch a business at the end of two years, at which time a new entrepreneur would take over the café. The café would include a mural painted by an Oakland artist collective, and a community space for local social justice organizations to meet. Electronic lockers in the store would house customer’s hot lunches or purchases and be accessible to people with disabilities and farmer’s market produce would be delivered daily, along with locally sourced products, like coffee, chocolate, and apparel.

Frances James (speaking) and the undergrad team presenting at Indiana University’s Kelley School.

What made them winners: Storytelling, originality, and depth of content. Competition judge Zain Kaj, CFO of GE Global Supply Chain at GE Healthcare, said the team’s ideas were “creative and delivered with passion and a genuine sense of inclusion and celebrated what the weekend was all about.”

The competition provided the perfect platform for the team “to showcase how we’re living our culture out loud,” Walker said. “The Defining Leadership Principles were in full effect and I’m so proud of the team for its authentic approach and positive energy. It’s a well deserved win!”

James opened the team’s 15-minute presentation in a unique way—with spoken words.

Oakland
The land of culture, the home to change
The Brown Berets carried the torch for Chicano freedom
Black Liberation ignited
The voices of Malcolm X and Angela Davis heard loud and clear—they called for more
Oscar Grant killed, a flawed police force at fault
Black Lives Matter, they yelled, Black Lives Matter!
Tupac preached about changes, America needs change
Said forgive but don’t forget, always keep your head up
All of these voices came to form the Oakland we know
But it has become so much more…

Alec Li’s collage included in the student’s presentation was an homage to Oakland’s rich history.

Li designed a stunning visual presentation, with collages representing Oakland’s rich history.  “We hit every emotion,” he said. “We made them laugh, and made them cry.” Taylor had great command and presence in the room, Balingit said.

The secret sauce: Diaz’s slow and steady delivery of her personal story of growing up in a low-income community in South Central Los Angeles—a food desert, she said, where your choices were either “McDonalds or Jack in the Box because there were no fresh strawberries or apples.” A Haas senior and a social justice warrior, Diaz served as team captain, and “the person who had to rally everyone together,” Taylor said.

The Haas Factor: Questioning the status quo. When the students read the case they boiled it down to one word: gentrification. Then they focused on Oakland, and how gentrification has impacted the city. That led them on a tour of Oakland with Balingit, where they drove past shuttered mom and pop stores and discussed the homeless problem and how lower income people were priced out. They decided that every aspect of their case must prioritize inclusion and the needs of the community. The approach was very “Berkeley,” Balingit said, referring to the focus on social justice.

Alec Li, Mary Balingit, Claudia Diaz, Frances James, and Kiara Taylor take a break in Indiana.

Most memorable experience from the competition: A standing ovation from the crowd. “We could not get out of that building when we were done,” Taylor said. “We were literally held back.”  At that moment, James said, “we knew we had made an impact.”

The students got to bring their whole authentic selves to the competition, Balingit said. “They brought such a fresh, innovative and risky approach but still won the hearts of everyone there,” she said. And another fun outcome: they all finish each other’s sentences now—and might just be friends for life.

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