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Women in Leadership (WIL) conference team members: Left to right: Sandra Tamer, MBA 19, Lauren Grimanis, MBA 20, Mila Pires, MBA 19, Annie Powers, MBA 20, Geena Haney, MBA 20, Kate Hancock, MBA 19, (conference co-chair) Jordan Baxter, MBA 19, (conference co-chair) Lipika Grover, MBA 20, and Erin Casale, MBA 19.

If 2018 was the year that the world woke up to the #MeToo movement’s allegations, marches, and debates around diversity and equity, 2019 is shaping up as a year of accountability and action.

That’s where the Berkeley Haas Women In Leadership team drew its inspiration as members organized the 23rd annual conference, to be held this Saturday, March 16, at Berkeley Haas. For six months, a leadership team of seven second-year MBA students and partners have been prepping for Haas’ longest running student-led conference. Organizers are expecting more than 300 people will attend, with 20 speakers lined up to talk about everything from inclusive culture to imposter syndrome.

This year’s theme is “Your Stories, Your Growth.”

“We recognize that everyone attending this conference brings something to the table, and we created this theme to inspire people to recognize the value of their own stories, and share them with others,” said Erin Casale, MBA 19, a WIL leadership team member who worked in management consulting before coming to Haas. “Stories inspire change, and that’s our ultimate collective goal.”

Pioneering women leaders

After breakfast and a welcome address from Dean Ann Harrison, the day will feature a keynote, talks, and four breakout sessions. Sessions will cover, for example, how millennials can drive corporate change for gender equity and how to fight imposter syndrome (and learn what kind of imposter you are). Another session, led by two T-Mobile senior employees, will allow attendees to practice having courageous workplace conversations.

Among the list of speakers and companies participating, many are women who broke into senior positions in industries or roles that were historically closed to women. They include Sandra Lopez, vice president at Intel Sports and Teri List-Stoll, executive vice president and chief financial officer at Gap Inc., who will give the day’s final keynote. Other speakers include Tyi McCray, the interim director of diversity and belonging at Airbnb, Brandi Pearce, the faculty director of Teams@Haas and a lecturer in the Management of Organizations Group at Haas, and Elena Gomez, CFO of Zendesk.

Coming away with a “clear next step”

For Casale, a big part of planning this conference required reviewing formal written and informal feedback from last year. The goal was to make this year’s conference unique and fun, especially given the current climate in which #MeToo news dominates the headlines regularly. “We wanted to make sure people didn’t feel tired or worn out from current events, but rather  inspired to take action at work and in their lives,” Casale said.

She added that business schools can do a lot to improve equity fluent leadership, a term coined by Kellie McElhaney, the founding director of the Center for Equity, Gender, and Leadership at Haas, which emphasizes the value of different life experiences, encouraging people to use their power to remove barriers, increase access, and drive change for positive impact.

The hope is that attendees will walk away from the conference ready to start a hard conversation at work—or share an inspiring story with friends or coworkers, Casale said.

“For us, it will be a win if attendees come away with a clear next step of what they can do to set themselves and their peers on a better path toward equity and inclusion,” she said. “We want people to feel equipped for change and inspired to start it.”

Tickets are available here.

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Margaret Stutt and Matthieu Kaminski of Development & Alumni Relations.

Berkeley Haas raised just over $605,000 during Big Give last Thursday, more than any other school or program, during the 24-hour campus-wide online fundraiser.

Notably, the overall number of gifts to Haas increased by 34 percent this year, rising from 600 to 806 and giving among faculty and staff grew by almost 50 percent to more than 108 donors.

“We saw a sizable jump in the number of people giving this year,” said Tracy Mills, executive director of strategic campaigns in Development & Alumni Relations. “This year, we focused on participation and getting the word out to everyone in our community. As a result, hundreds of alumni, faculty, staff, and students were inspired to give during the day. It was exciting to watch the gifts come in and see Haas climb to the top of the campus leaderboard.”

The school received $79,500 by unlocking the Haas School Board Challenge, earned if at least 400 gifts were made to the Haas School of Business Fund during Big Give.

Big Give launched in 2014 to give the entire Cal community—alumni, parents, students, faculty, staff, and friends—the chance to come together to support favorite schools and programs, and to help those schools and programs win prize money.

Overall, UC Berkeley received 14,094 gifts this year totaling $4,201,378.

If you missed the Big Give, it’s still possible to donate.

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Pedro Moura and Jessica Eting, both EWMBA 18, started banking services startup Flourish Savings.

Pedro Moura and Jessica Eting, both EWMBA 18,  built a rewards-based online and mobile savings account designed to appeal to people who underutilize banking services. Their hard work led to the launch of startup Flourish Savings, which has now earned a place at the April 5 Global Social Venture Competition (GSVC) finals.

“It takes a lot of expertise, research, and partnerships to tackle wicked problems like helping low-income and immigrant communities learn to trust banks, save money, and build credit,” Moura said. “We’re hoping that the judges will see how our idea has the potential to change the way people handle personal finance.”

The competition, which is celebrating its 20th year, will be held during the Future of Social Ventures Conference at Haas.

Flourish, along with Respira Labs, founded by Dr. Maria Artunduaga, UC Berkeley/UCSF MTM 18, Nerjada Maksutaj, MBA 20, and Nikhil Chacko, MBA/MPH 20, are the two Haas teams competing in the finals—among more than 20 global teams in this year’s competition.

L-R: Nikhil Chacko, MBA/MPH 20, Dr. Maria Artunduaga, UC Berkeley/UCSF MTM 18, and Nerjada Maksutaj, MBA 20. Photo: Yizhe Gu

A vision of a better world

GSVC has come a long way since its founding in 1999 by five MBA students—Lia Fernald, Alison Lingane, and Denise Yamamoto,  MBA 00, and Nik Dehejia and Sara Olsen, MBA 01. Their idea was to provide social entrepreneurs with mentorship, feedback, and a chance to hone their funding pitches.

Jill Erbland, GSVC’s program director, has watched the program’s number of partners and its international appeal to students grow since she arrived at Haas in 2007. This year, 11 partners hosted 12 regional semi-final events—and the competition had a record-breaking 692 applicants hailing from 67 countries. To date, GSVC has distributed more than $1 million in prize money, and helped more than 7,000 teams move closer to achieving their vision of a better world.

“In 1999, creating viable companies that had social impact was a nascent idea, even for Berkeley Haas,” Erbland said. “Our steady growth has been fueled by other universities prioritizing social impact and entrepreneurship educational programs.”

Following footsteps

The competition has launched a number of Haas student-led social impact ventures, including Indiegogo—co-founded by Danae Ringelmann and Eric Schell, MBA 08—and Revolution Foods—co-founded by Kristin Groos Richmond and Kirsten Saenz Tobey, MBA 06.

Flourish Savings’ co-founders are hoping to follow in their footsteps. Eting, the daughter of immigrants, and Moura, an immigrant himself, met in Senior Lecturer Sara Beckman’s Applied Innovation class. They soon discovered a common interest in helping people build savings habits, reduce reliance on debt, and achieve financial security. A pilot program demonstrated that participants saved an average of $192 in the first four months of using Flourish.

This is Eting’s second GSVC event. About 10 years ago, she was an attendee and guest of her boss, who had judged one of the regional competitions. “I was in awe of the people who were pitching, and I never once imagined it’s something I would be doing,” she said.

Meantime, Respira Labs aims to help people who struggle with chronic obstructive pulmonary disease (COPD), a progressive lung disease that obstructs breathing. The team is pitching a wearable lung-function monitor that that uses audio-signal processing and machine learning to alert patients, caregivers, and doctors when inhalers, medication, or medical care is needed. The data collected could be used to predict and prevent flare-ups of COPD, which afflicts 16 million Americans, according to the CDC.

Artunduaga met her Haas colleagues at Berkeley SkyDeck. Maksutaj said her family has been affected by COPD and was quick to embrace the startup’s mission. Chacko came to the team with a passion for solving health crises in low- and middle-income countries, to which the World Health Organization (WHO) attributes 90 percent of global COPD deaths.

“GSVC’s global focus is especially important to us because our long-term ambitions go beyond the U.S.,” Chacko said.

The full conference includes more than the GSVC final presentations and judging. This year’s sessions are organized around the theme “Technology for Good,” and sessions include “The Future of Food: A Design-Thinking Session with IDEO,” “Financial Inclusion and Technology” with speakers from Mastercard and PayPal, and “The Promise and Peril of Emerging Technologies in Social Impact.”

Attendees will also be able to watch presentations from all the finalists and meet GSVC co-founder Sara Olsen, who is serving as a judge this year.

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Patrick Awuah, MBA 99, founder of Ashesi University in Ghana, will be the speaker at the 2019 Full-time MBA and Evening & Weekend MBA commencement, while Steve Etter, BS 83, MBA 89, a founding partner of Greyrock Capital Group and a long-time Haas finance lecturer, will speak at undergraduate commencement.

The 2019 MBA commencement will take place on Friday, May 24, at 2 p.m. at the Greek Theatre.

The  undergraduate commencement will take place on Sunday, May 19, at 9 a.m. at the Greek Theatre.

Patrick Awuah, MBA 99

Patrick Awuah

Born and raised in Ghana, Awuah came to Berkeley Haas after attending Swarthmore College and working at Microsoft. His son’s birth inspired him to want to give back to his home country by establishing a new university that would offer a liberal arts education.

In past interviews, he has emphasized the need to teach through critical thinking rather than through rote memorization, which was the general practice in Ghana. His dream was to develop ethical and entrepreneurial leaders who would go on to revitalize Ghana and the African continent.

At Haas, Awuah turned his idea into a project through the International Business Development (IBD) Program. For several years Berkeley MBA students helped build the business plan for Ashesi University, and Haas faculty served as advisers. Classmate Nina Marini helped launch Ashesi in 2002 in a rented facility with 30 inaugural students. Today, Ashesi has a new 100-acre campus outside Accra with an enrollment of more than 1,000 students who hail from 15 African nations. The school has more than 1,200 alumni.

“Patrick is an inspiring business leader who truly represents our Defining Leadership Principles,” said Laura Tyson, former Haas dean and faculty director of the Institute for Business and Social Impact. “We are very proud of all that he has accomplished and honored to welcome him back for commencement.”

Awuah, who was profiled in BerkeleyHaas magazine, has earned many accolades, including:

• A MacArthur Fellowship (aka “Genius Grant”)
• Placement on Fortune magazine’s list of the world’s 50 greatest leaders
• The WISE Prize for Education
• A 2014 Schwab Foundation “Social Entrepreneur of the Year” award
• The John P. McNulty Prize awarded by the McNulty Foundation and the Aspen Institute
• The UC Berkeley Elise and Walter A. Haas International Award
• The Haas School’s own Leading Through Innovation Award
• An honorary doctorate from Swarthmore

Stephen Etter, BS 83, MBA 89

Steve Etter

Etter has spent the last 30 years of his career working in private equity. As one of the founding partners at Greyrock Capital Group, he helped raise and invest almost $1 billion over four funds.

Previously, he held positions at Bank of America, GE Capital, Citibank and PricewaterhouseCoopers, where he obtained his CPA. Most recently he has transitioned into the world of social impact investing.

For the last 24 years—48 consecutive semesters—Etter has been a professional faculty member in finance at Berkeley Haas. He has twice earned the school’s prestigious Cheit Award for Teaching Excellence from his undergraduate students and once received the campus-wide UC Berkeley Distinguished Teaching Award.

Alumnus Kevin Chou, BS 02, cites him as an inspiration for his gift toward the funding of Chou Hall.

“The personal commitment and coaching Steve provides his students is extraordinary,” said Erika Walker, assistant dean of the undergraduate program. “Steve’s classes have inspired scores of students to go beyond themselves.”

Etter’s role at Haas goes beyond teaching. He coaches Haas external case competition teams, helps with professional job searches, and works with many student athletes who go on to professional sporting careers (including Jarod Goff, Jaylen Brown, Missy Franklin, Ryan Murphy, and Marshawn Lynch).

Riley Brown, BS 19, and a Cal varsity crew coxswain, said Etter helped her think more seriously and deeply about what set her apart as a student when she was applying to Haas. “He gives me incredible advice,” she said. “Every time he opens his mouth I have to listen because I know there will be a nugget of gold.”

Steve Etter with Cal athletes

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Students enjoy a moment at the 2019 MFE commencement
Photo: Noah Berger

Richard Lindsey, managing partner at Windham Capital, offered some clear advice for the 79 Berkeley Master of Financial Engineering graduates at Friday’s commencement: invest in your professional network, hold fast to your ethical standards, and “don’t sweat the money.”

“We all like money, or at least the lifestyle that it can provide, but you should do what you love, rather than focus on the money,” said Lindsey, who holds a PhD in finance from UC Berkeley, and noted that he left Bear Stearns in 2007 with $30 million in stock that he liquidated for $400,000 after Bear Stearns collapsed in 2008. “Don’t confuse your compensation with your self-worth.”

Linda Kreitzman, who has been the MFE program’s executive director since its inception 19 years ago, praised the class for raising the standards of the program, which is consistently ranked #1 in the country. “I am very proud of you and your accomplishments,” she said, before welcoming Gifford Fong, BS 67, MBA 69, JD 71, who provided the founding gift for the MFE program, and finance professors David Sraer, Nancy Wallace, Eric Reiner, and Terry Odean, who participated in the ceremony. She also welcomed the incoming cohort of 93 new MFE students, who arrived last week.

Moving beyond yourself

In opening remarks, former Haas Dean Richard Lyons, who teaches the Equity & Currency Markets elective course in the MFE program, said the program has provided students with the skills to move beyond being the outstanding individual contributors they have been trained to be—to team leaders who go beyond themselves.

“That psychological transition from individual contributor to understanding that your most important work is done by working through and other people is profoundly important and that’s part of what this program is about as well,” he said.

The 2019 MFE class hails from more than a dozen countries. Photo by Noah Berger

The MFE class student speaker, Jack St. Clair, noted how quickly the past year has gone by, saying the class grew close through pizza parties, horse track races, bowling events, football game, trips to Tahoe and Napa, class dinners, and karaoke nights. He urged classmates to remember “the times we’ve spent together, just as we did the formulas we’ve memorized throughout the year.”

“Before we spread out over the globe, let’s not forget this year we’ve had,” he said. “The Berkeley MFE is ranked #1 not just because of Linda and our great faculty, but because we as students give back to each other, past and future MFEs. I ask each of us to do the same when we graduate.”

Before awards were given out, Kreitzman delivered a lighthearted slide show, a showcase of the talents of many students, including a pilot, a professional high-stakes poker player, several outstanding skiers, a mountain biking champion from France, a sailor, a ukulele player, and a songwriter.

This year’s valedictorian was Vaibhav Pednekar, while the salutatorian was Yiming Yu. A team of four students received the $5,000 Morgan Stanley Applied Finance Project Award during the ceremony: Matias Lopez, Sumair Ajanee, Willam Shi, and Laurent Morrissette-Boileau for “Machine Learning Monte Carlo for American: Style Derivatives Valuations.”

Grads celebrate after the ceremony. Photo: Noah Berger

Other awards:

Earl Cheit Award for Excellence in Teaching: Prof. Eric Reiner

Outstanding GSI Award: Mykyta Bilyi

Alumni award for outstanding teaching and service to the MFE: Yang Guo, Yihui Li, Tianyi Xia

MFE Certificate for MBA Students: Daniel Clayton, Michael Bausback

Defining Principles:

Beyond Yourself: Julien Gille and Ruochen Zeng

Confidence without Attitude: Teddy Legros and Jack St. Clair

Question the Status Quo: Matias Lopez and Joanna Wang

Students Always: Shailen Aggarwal and Nathan Johnson

Embodiment of All Four Defining principles: Hosang Yoon

MFE grads will head to top financial jobs in Hong Kong, New York, Chicago, London, and San Francisco this year. Photo: Noah Berger

Students in the graduating class are moving on to jobs at Morgan Stanley, Citadel, Goldman Sachs, Citi, BlackRock, Two Sigma, Moody’s, Deutsche Bank, Kohlberg Kravis Roberts, Mellon Capital, Putnam Investments, Citi, Barclay’s, DV Energy, DRW, Uber, AQR, Wells Fargo, WorldQuant, etc., in locations including Hong Kong, New York, Chicago, London, and San Francisco.

New class arrives

Meanwhile, the MFE class of 2020 arrived last week at Haas for orientation and began classes today. This year’s larger class is split into a blue cohort, which is a data science in finance specialization, and a gold cohort, which is a finance specialization for financial engineers.

Students in the incoming class come from 11 countries, including the U.S., Brazil, Canada, Chile, China, France, India, Peru, Russia, South Africa, and Thailand. About half of them have graduate degrees and 12 percent earned PhDs.

Watch the video of the ceremony here.

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Organizers of this year’s Berkeley Haas Africa Business Forum: Clockwise from back row L-R: Abigail Adu-Daako, Bosun Adebaki, Cheikhou Diaw, Zaidat Ibrahim, Kaffa Sakho, Roland Ekop, and Sarah Lebu, Ibrahim Balde, Iman Umer, and Stan Cataldo Gonzalez.

Solar-powered motorcycles zipping around Kenya. Elementary school students using robots to solve problems in Uganda. Honey-spun band-aids designed to more quickly heal diabetics’ wounds in Egypt.

Investors, startups, and entrepreneurs increasingly have their eyes on Africa, where innovation and creativity combined with fast growth and a young population are among the strengths to be explored at the 5th annual Berkeley Haas Africa Business Forum on April 6 at Haas.

This year’s conference — called “Africa on the Move: Enabling Homegrown Innovation” — focuses on the rapid development on the continent and how policymakers and business leaders can serve as a resource and support innovation and growth in areas from mobile money to solar power and battery storage.

The goal was to organize a bigger conference than in previous years: more speakers, panels, keynotes and attendees. About 200 people and 18 speakers representing firms such as IFC and Convergence Partners are expected to attend.

Cheikhou Diaw, MBA 19, and Zaidat Ibrahim, MPH 19, co-chairs of the conference planning committee, have been organizing the forum for the past year, alongside a team of undergraduate students and public policy and public health students.

“It’s really important for us to make sure that people in the Berkeley community and the Bay Area understand that Africa is more than a place with safaris or a place full of poverty and disease,” Diaw said. “There are billions of opportunities. Making people aware of those opportunities is something I’ve been trying to do since I joined Haas.”

A different perception

Six of ten of the world’s fastest growing countries are African: Ghana, which is boosted by oil and gas expansion, Ethiopia, Côte d’Ivoire, Djibouti, Senegal, and Tanzania, according to the World Bank.

“Fast growth and a young population means that there’s tremendous business opportunity and this will continue over the next five, 10, 15 and 20 years,” Diaw said. “We should have a different perception of Africa in the West.

Throughout the day, forum attendees can take part in four panels, a morning hackathon, and two keynotes, discussing policy, financing, and entrepreneurship unique to Africa and its challenges.

Some panels will center around what government can do to help businesses and entrepreneurs, as well as how investors and financial institutions can support ideas and bring them to life.

This year’s interactive session will be the first non-technology hackathon, encouraging groups to come up with a public policy innovation. Judges will pick the winning team and award a prize, and the group will talk about the idea in the policy panel later in the day.

Some of the forum’s speakers include Andile Ngcaba, founder and chairman of the investment group Convergence Partners; Benjamin Fernandes, founder of fintech company NALA; and Nichole Yembra, founder and managing director of The Chrysalis Company.

Get more details and purchase tickets here. (20 percent off with code ABFHAAS19)

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Leo Helzel, MBA 68, LLM 70

Leo Helzel, MBA 68, LLM 70, an honored faculty member who guided the school’s first forays into entrepreneurship and was a dedicated and generous supporter of Haas for decades, passed away Thursday, March 21, in his home, surrounded by family. He was 101.

Helzel’s history at Haas includes a series of firsts. He taught the business school’s first entrepreneurship class—one of the first such courses offered at a U.S. business school. He was also the first chair of the Haas School Board, which advises the dean, and the first Haas instructor to be honored with an “adjunct professor emeritus” title upon retirement in recognition of his nearly forty years of service.

Helzel was instrumental in establishing the school’s entrepreneurship program. In addition to teaching, he provided the funding to endow the Leo B. and Florence Helzel Chair in Entrepreneurship and Innovation in 1986. He worked closely with then-Dean Richard Holton to create the business school’s Lester Center for Entrepreneurship and Innovation, which opened in 1991.

Helzel summarized his entrepreneurial verve and lifelong learnings—alongside wisdom from the CEOs of the Gap, Bank of America, and Williams-Sonoma—in his 1995 book, A Goal is a Dream with a Deadline: Extraordinary Wisdom for Entrepreneurs, Managers, and Other Smart People, and donated the proceeds to Haas.

“Leo was one of those people who changed the game whenever he was around, raising standards and pushing people to reach for more together,” said Professor and former Dean Rich Lyons, who worked closely with Helzel on the board and beyond. “He taught me a lot. It’s hard to imagine a stronger exemplar of our school’s defining leadership principles.”

Helzel flew as a navigator on Navy planes during WWII.

Helzel was born in New York City on November 1, 1917, to Philip and Hannah Helzel; he had two older siblings, Sylvia and Max. His parents had immigrated from Podhajce, a shtetl that was part of the Austro-Hungarian Empire, before World War I. He graduated from Townsend Harris, a tuition-free honors school for the City College of New York. He then worked full-time at his uncle’s accounting firm, Gerber & Landau, while attending ROTC and night classes at City College, graduating in 1938.

Called up to serve during World War II, Helzel flew as a navigator on Navy planes and served as a navigation flight instructor. His home base was the Alameda Naval Air Station, and after the war he stayed on in Oakland, launching several successful careers—as an accountant, a lawyer, and an entrepreneur.

In 1946, Helzel founded Leo B. Helzel & Company, now called the RINA Accountancy Corp., in Oakland. Aspiring to become a lawyer, Leo took night classes at Golden Gate University while also teaching tax and accounting there. In 1957, he decided he wanted to concentrate on law full time and left the firm as a partner, but remained as a client. He eventually took a risk on new technology for drilling oil wells and was successful in that arena as well.

Helzel began sharing the knowledge acquired during his multiple careers when he began teaching international business at Berkeley’s business school in 1967. While teaching, he decided to get an MBA, and upon completing the program at age 51 joked that he was “probably the oldest MBA in the books.” He went on to earn his Master of Laws (LLM) from Berkeley Law in 1970.

In 1970, Richard Holton, dean at the time and a friend of Helzel’s, came up with the idea of creating an entrepreneurship course and hired him to teach it. Helzel initially presented a case about a fictitious startup, Miracle Goggles. He later invited entrepreneurs whom he knew to share their stories with his class. Interest in the companies emerging in Silicon Valley was so intense that the course soon had to be moved to an auditorium. The course may have been the first to provide students with direct contact with successful entrepreneurs, according to Business at Berkeley by Sandra Epstein.

“Leo was a thought leader decades ahead of others in bringing real business practices and live case studies into the classroom from the time he began teaching here in 1967,” said his former student Jerry Weintraub, BS 80, MBA 88, and president of Weintraub Capital. “As a depression-era child who came from humble beginnings, Leo took immense pride in Haas—the opportunity this public institution gives to students and the impact education can have on improving the lives of others. Leo has left a legacy as an incredible agent of change in education, philanthropy, and the community through his mentorship and friendship to those of us lucky enough to have known him as a teacher.”

Members of the Helzel family: Florence; Larry, BA 68 (history); and Leo, MBA 68

Helzel also taught business law and commercial law at Haas, creating the course called Top Down Law with Adj. Prof. Noel Nellis, JD 66. The course taught business from the perspective of an entrepreneur who encounters legal problems.

“Leo was indeed a friend, mentor, and educational innovator. His leadership role in creating our entrepreneurship program is well known. More subtle perhaps, and one of his biggest innovations at Haas, was recruiting accomplished professionals to join our professional faculty,” said Jerome Engel, founding executive director emeritus of the Lester Center for Entrepreneurship and Helzel’s long-time faculty colleague. “We at Haas will benefit from his foresight, leadership, and generosity for generations. We will miss him. May his memory be a blessing to all of us.”

Helzel gave generously to the Haas School’s original campus that opened in 1995 and to its new building. In return, the Helzel Boardroom and a “Helzel Family” breakout room are named in his honor. He was also a Trustee for Golden Gate University and for the California College of the Arts, served on the board of BerkeleyLaw, and was active in several Bay Area nonprofit organizations.

He is survived by his loving family—his wife of 72 years, Florence; his two children and their spouses, Larry Helzel (Rebekah) and Deborah Kirshman (David); grandchildren Rachel Concannon (Jason) and Daniel Kirshman, MBA 2011 (Jennifer); great-grandchildren Riley and Jacob Concannon and Sienna and Skylar Kirshman; great-nephew Zachary Pine; and several other family members with whom he maintained close relationships.

A private family service has been held.

Contributions in Helzel’s memory may be made to the Magnes Collection of Jewish Art & Life, UC Berkeley, 2121 Allston Way, Berkeley, CA 94720-6300; givetocal.berkeley.edu/magnes.

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Berkeley Haas Dean Ann Harrison grew up with an insatiable curiosity and a dream to make the world a better place.

No surprise, then, that she ended up at Berkeley—first as a double major in history and economics and later, after receiving a PhD in economics from Princeton, as a professor in the Department of Agricultural & Resource Economics from 2001 until 2011. She then joined the World Bank as director of development policy and after that the Wharton School of Business, where she gained international acclaim for her research on foreign investment and multinational firms. On January 1, Harrison “came home” to Berkeley once more—this time to serve as the 15th dean of Berkeley Haas.

She recently spoke to BerkeleyHaas magazine about her early years on campus, her groundbreaking research, and her plans for strengthening Haas as a leader in 21st century business education.

What was your experience as a Cal undergrad?

Being a Berkeley student and growing up in the Bay Area pretty much shaped who I am today. I had an independent streak and had hiked all over California by the time I was in junior high. I remember campaigning door-to-door in support of a statewide ballot initiative to protect our coastline. When I came to Berkeley, I lived in a co-op on the North Side. I was—and still am—into modern dance and loved that I could take dance classes on campus from former stars with the Martha Graham company and go to Zellerbach Hall and see great performances. I wrote dance reviews for the Daily Cal and was elected to the ASUC senate.

How did you get interested in economics?

I started off as a history major with a plan to go to law school. But then I took economics and loved it. One day I saw a posting for someone to do the grading for Econ 101A and the professor, Leo Simon, hired me—although he was taking a bit of a risk since I was an undergraduate. He became my mentor and convinced me to get a PhD. He really changed my life. After college I became a health economist at Kaiser Foundation Health Plan. It opened my world to the power of data. Kaiser had millions of members, and I would stay in the office until 10:00 p.m., just analyzing the data.

How did your time at the World Bank shape you as a leader?

It taught me diplomacy, patience, and how people can do amazing things when they have the will to work together. After the financial crisis a decade ago, the bank’s lending tripled but its overall budget stayed flat. So, there was a lot of competition internally for fewer resources. The different parts of the bank were able to overcome that because of the strong relationships between people.

You are a much-cited scholar in your field. What inspires your research?

As a trade economist, I’m interested in real-world questions and their policy implications. What I find most interesting are big-picture policy issues. During my first business trip to India in 1986, I was part of a team that helped the Indian government formulate policies to increase competition and reduce monopoly power. To be able to take part in a project that helps economies solve problems in real time is very satisfying.

The question I have been most obsessed with recently is whether rising international competition has led to job losses and stagnating wages for the American worker—and whether free-trade economists miscalculated the costs of globalization or whether trade is just a scapegoat. I’ve concluded through my research that China is not the culprit. The cause of all those job losses is automation. The Factory-Free Economy, a book I co-edited with French economist Lionel Fontagné, looks at what will happen to high-income economies when many tasks become automated and jobs that used to exist are done by machines.

Read the full interview here.

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To mark Equal Pay Day, we’re featuring new work by Prof. Laura Kray, an expert on gender and negotiations, along with Margaret Lee, a postdoctoral research fellow with the Center for Equity, Gender, and Leadership. Equal Pay Day was created in 1996 by the National Committee on Pay Equity to mark extra days that American women would have to work, on average, to earn what male counterparts earned last year.

Professor Laura Kray has doubled down on helping women develop ace negotiation skills: She’s spent much of her career studying gender dynamics in negotiations, and has also taught many hundreds of MBA students and seasoned women executives how to negotiate like pros.

Prof. Laura Kray

But when it comes to strategies to close the stubborn pay gap that has women earning about 80 percent of what men earn (a statistic that varies by race/ethnicity and how it’s measured), she takes issue with telling women they can simply negotiate their way out of it. That not only puts the onus on women rather than the systemic issues that keep their salaries low, but it perpetuates stereotypes that may not be true, she said.

“We know that people who negotiate get more than those who don’t, but that’s not a ‘women’s issue’—two-thirds of men don’t negotiate,” said Kray, the Warren E. and Carol Spieker Chair in Leadership. “Women are asking, but they’re not always getting what they ask for, and they’re more likely to be told things that aren’t true.”

Kray has long peeled back the surface to look at the deeper structural issues that lead to gender inequality, from implicit bias to lack of transparency to inflexible mindsets. Recently, she’s uncovered a new front in the pay gap battle: team size. Kray and Margaret Lee, a postdoctoral research fellow sponsored by the Center for Equity, Gender, and Leadership (EGAL), are examining how deep-seated biases about leadership may lead to men being put in charge of larger teams than equally qualified women, and being paid more because of it.

Since supervising more people can be more work and indeed justify a higher salary, it’s important to unravel the reasons why men manage larger teams and how that drives higher salaries, she said. Combined with other findings, this new line of research offers another layer of insight into the causes of the gender pay gap—and possible solutions.

“We’re most interested in the structural issues, and the psychological processes of decision makers that produced them,” Kray said, at a recent EGAL presentation on her work with Lee.

Do women ask—and do they get?

Kray points to a 2017 study by McKinsey & Co. and Lean In that asked 70,000 respondents across 222 companies whether they had asked for a raise or negotiated for a promotion. While the percentages varied slightly by race, there were no significant differences between men and women overall.

She and Lee took a closer look at how this plays out among Berkeley Haas MBA students. Analyzing the results of a negotiation exercise completed by 346 MBA students who were asked to structure their own job offer, she found that the women did not sell themselves short, and asked for virtually identical base salaries as men.

In a more disturbing finding from a 2014 paper, Kray looked at the results of a sales negotiation exercise completed by pairs of 298 MBA students, where one acted as seller and one as buyer, with opportunities to lie or misrepresent the truth. Men reported they had lied to female partners in 24 percent of cases, versus just 3.4 percent of negotiations with another man—in other words, seven times as often. And although women reported lying less overall, they also were slightly more likely to lie to other women as to men.

Based on that and other experiments in the paper, Kray concluded that female negotiators are perceived as less competent and more gullible than male negotiators, which leads to them being lied to or manipulated more often—another reason why she believes the problem goes far beyond teaching women to negotiate.

“In this classroom simulation, MBA women were not getting the same treatment in negotiations, regardless of whether they were asking or not,” Kray said. “It’s important to explore if—and how—this plays out in organizational contexts.”

Team size and salary

In their new work, Kray and Lee looked at the results of a Berkeley Haas alumni survey of almost 2,000 full-time professionals who graduated between 1994 and 2014. Respondents had between two and 18 years post-MBA work experience, with an average of seven years. The researchers found that while men’s base salaries were about 8 percent higher than women’s, it’s in the extras—bonuses, share values, and options, which tend to not be tracked as publicly as salaries—where the men’s salaries dwarfed the women’s. These MBA women’s overall compensation averaged about $290,000, or about 66 percent of men’s $439,000 average.

That echoes findings from a recent study by the Forté Foundation, revealing that the salary gap is even higher for MBA women than for women overall (and highest for minority women), and that it only increases with seniority. A 2010 study of Chicago Booth MBA grads found a similar result: thirteen years out, women earned 56 percent of what men earned overall (they traced a large part of that to the career interruptions of motherhood, but found at least 10 percent of it to be unexplained).

Analyzing the Berkeley Haas alumni survey, which contained information on direct reports, Kray and Lee became interested in whether team size is contributing to pay disparities.

They compared the number of subordinates men and women reported managing and found men averaged 11 direct reports while women averaged six. After controlling for multiple factors such as experience and industry, that was reduced to an average of 10 for men and slightly less than 8 for women, but still significant. They then conducted further analysis parsing out team size from salary, and concluded that team size did account for a portion of the pay gap—above and beyond other individual job characteristics.

The researchers then delved further into why men are given larger teams. They conducted surveys of Berkeley Haas undergraduates, and also of subjects recruited through an online platform, and found no differences in men’s and women’s preferences on the number of people they’d feel comfortable managing. Even so, both groups said they preferred male managers for large teams, and female managers for smaller teams.

In another study, they found that people were more likely to associate stereotypically male attributes (e.g. assertive, forceful, aggressive, demanding) with leaders of larger teams, and associate stereotypically feminine attributes (e.g. patient, polite, kind) with leaders of smaller teams. They also found that people do believe that leaders of large teams earn more than leaders of small teams.

Kray and Lee are now more deeply pursuing research on why a team-size bias exists—based not only on stereotypes of who is a more appropriate leader but also on how complex and challenging the jobs of leading teams of various sizes are believed to be. The ultimate goals is to examine how implicit biases about team size justify part of the difference in men’s and women’s pay, and especially the gap that widens with seniority.

What can women do?

In the meantime, Kray—who also serves as faculty director for EGAL—advises women entering a job negotiation to pay close attention not only to their salary and bonuses, but also to how many direct reports they’ll be managing.

“For women who are aiming to maximize their earnings, it is important to make sure they have the headcount to justify what they’re asking for,” she said. “My advice for these aspiring women is: Don’t overlook team size as a factor that could make a difference in your paycheck, especially in the long run.”

EGAL Founding Director Kellie McElhaney said Kray and Lee’s new research is exactly the type of work she wanted the center to support when it launched in 2017.

“This works on two critically important paths: Dispelling long-held and damaging myths that are used to justify inequitable behavior, like unequal pay, and introducing new explanations that need further research, like team size,” McElhaney said.

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Zappos says its 10 core values are a “way of life,” while Netflix details seven aspects of its culture, nine “highly valued behaviors and skills,” plus deal-breakers like “no brilliant jerks.” Nordstrom has just one rule of thumb: “Use good judgment in all situations.”

More and more companies are asking employees to adopt a set of core values, seeking to build a culture that will give them an edge. But while getting everyone on the same page makes it easier for people to work together, too much of the same thinking can stifle creativity. What’s the right balance of cultural values to drive profitability, growth, and innovation?

An analysis of 500,000 Glassdoor.com reviews of S&P 500 firms found that companies whose employees disagree on core values are, indeed, less profitable than similar companies where workers are culturally aligned. Meanwhile, the firms that are the most highly valued and innovative have something in common: They embrace a diverse range of cultural values throughout the organization.

Assoc. Prof. Sameer Srivastava co-directs the Computational Culture Lab and the Berkeley Culture Initiative.

“Past research has suggested there’s a tradeoff between diversity and productivity,” said Berkeley Haas Assoc. Prof. Sameer Srivastava, co-author of the study, which is forthcoming in Administrative Science Quarterly. “We suggest it’s a false tradeoff. You can have a multiplicity of ideas and values and also have cultural alignment on those ideas and values.”

A new way of thinking about cultural diversity

The paper defines a new way of thinking about diversity in organizations and reconciles a fundamental contradiction in current thinking. On the one hand, deep differences in how people think can create problems when they have to coordinate on tasks; research has found that a strong and unified culture increases productivity and efficiency. On the other hand, diverse viewpoints and perspectives can help people respond to change and uncertainty, and ultimately recombine ideas into something novel.

To get a more nuanced view of the cultures of different organizations and their relationship to business performance, Srivastava and collaborators Amir Goldberg of Stanford and Matthew Corritore of McGill drew on the power of the Computational Culture Lab, which Srivastava and Goldberg co-direct. The joint Berkeley-Stanford lab uses data science to develop new ways of measuring organizational culture. (Srivastava, Goldberg and co-researchers previously analyzed 10 million internal emails from a technology company to learn about culture fit within an organization.)

This time they looked at differences between organizations, turning to Glassdoor, a job search platform with 17 million monthly users who post anonymous reviews of their employers. The company has a data science team that agreed to share data with the research team to gain new insights.

The power of machine learning

The researchers used natural language processing and machine learning to identify hundreds of topics in comments about company culture—ultimately choosing 500 topics to cover as wide a range as possible. After “training” their statistical model to identify patterns in culture-related sentences, they scanned over 500,000 reviews of 492 S&P 500 firms posted between 2008 and 2015. They matched companies with similar characteristics for purposes of comparison, limiting the sample to companies with at least 25 reviews.

By looking at how many topics were mentioned in reviews of each company, how many times they were mentioned, and how much commonality there was between reviews, they were able to determine whether a company’s culture was diverse or uniform, and divided or aligned.

For example, they classified a company as divided when they found little overlap in topics mentioned by reviewers—as might happen at a company where customer service reps prioritize delivering “wow,” but engineers care only about technical progress, and the finance team is laser-focused on profits. They found other companies where everyone talked about the same few topics: They were culturally unified, but had little diversity.

It was the companies in which employees, on average, talked about many different culture-related topics that seemed to hit the sweet spot for innovation. That kind of diversity was strongly associated with a higher market valuation—as measured by Tobin’s Q. Those firms also produced more patents on average, as well as higher-quality patents that were built on by other companies, than similar firms where the typical employee mentioned relatively few topics related to culture.

Conversely, the researchers found that firms with highly divided, rather than unified, cultures were less profitable: those types of cultures were associated with lower returns on assets (ROA).

Diversity of values, distribution of values

Interestingly, these statistical relationships were true no matter which specific values were mentioned (e.g. collaboration, adaptability, playfulness). The important factors were the variety of culture-related topics discussed and how consistently people mentioned those topics throughout the organization.

The paper suggests that in assessing a company’s culture, it’s important to look beyond which values are emphasized to how they are distributed in a group. While diversity may arise from differences between people—which the researchers call “interpersonal diversity”—it’s also true that individual people often hold multiple values, which may even be contradictory. They define this as “intrapersonal diversity.” This view builds on research that finds when people have a broad “toolkit” of cultural resources, they have greater capacity for creativity and adaptability.

New technique for measuring culture

In addition, the power of data science and natural language processing offers an exciting new way for organizations to understand what makes for a successful culture. Traditional approaches such as collecting demographic information like age, gender, or ethnicity may or may not relate to underlying beliefs, and surveys are not only expensive but also relatively static. This approach allows researchers to examine topics that people are actually talking about and how these topics vary over time.

“This gives us a much more granular measure of culture over time,” said Srivastava, who also co-leads the Berkeley Culture Initiative, which he founded with Prof. Jennifer Chatman to develop new approaches to organizational culture research.

Srivastava cautions that a limitation of Glassdoor data is that people are writing for an external audience, and they choose to write reviews for a complicated set of reasons—including in response to campaigns by their employers. To the extent possible, the researchers did account for these dynamics in their analyses, he said.

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“Classified” is a series spotlighting some of the more powerful lessons faculty are teaching in Haas classrooms.

Alex Budak teaches a new undergraduate course called Becoming a Changemaker.

Nearly 40 students poured out of the Chou Hall elevators on a recent morning on a strange mission: to find ways to get rejected in less than 15 minutes.

One student told a passerby it was her birthday. “Could you sing ‘Happy Birthday’ to me?” she asked.  Another offered to swap his jacket for a person’s laptop. Yet another went from table to table at Café Think, asking for bites of food.

The exercise may sound like improv, but it’s just part of Haas Lecturer Alex Budak’s new undergraduate course called Becoming a Changemaker. The course aims to inspire and empower future leaders with the mindset and tools to make a positive impact on the world—a mission that includes learning to overcome fear of failure by confronting it head-on.

“If you seek to do anything innovative or meaningful in your life, you’re inevitably going to fail along the way,” Budak said. “It’s one thing to intellectualize failure, but it’s another to feel it personally. How often do we hold back asking for something because we’re sure we’ll fail when in reality we may not? We’re failing even before we try.”

Turning panic into confidence

The rejection exercise is just one example of how Becoming a Changemaker tries to upend traditional notions of leadership. In follow-up interviews, students described how a near sense of panic turned to newfound confidence as they practiced asking for something and not getting it.

“It was one of the most powerful educational experiences I’ve ever had,” said Nye Avilla, BS 20, who overcame her fear of asking people if she could borrow their umbrellas. Despite getting rebuffed time and again, she basically realized it was no big deal to ask. “By being more open to failure, I know now that I can be a better leader and a better individual.”

The course uses many tools (including this “act it out” exercise) to create a new kind of leader.

The students were also struck by how many strangers agreed to their outlandish requests, because it reminded them that people do want to help and that their own reticence can be inhibiting.

“Outdated notions of leadership tell young people to wait their turn; to wait for permission to lead,” Budak said. “But while leaders might be scarce, leadership is abundant. We can all lead positive change from wherever we are, whether we’re an intern or a CEO. Leadership is not a title; it’s an act. This course reflects the Haas commitment to building a different kind of leader.”

That’s why the Haas Defining Leadership Principles—Question the Status Quo, Confidence Without Attitude, Student Always, and Beyond Yourself—are woven throughout the course curriculum, he said.

The sum of “small, daily acts”

Students say the course has fundamentally changed how they think about leadership and has transformed how they see themselves in the world.

Sarika Saksena, for example, was 14 years old when she launched a nonprofit, Ujala, that has taught more than 1,000 women in India how to make and sell candles to gain financial independence. Despite her success and experience, the self-described introvert says she never thought she had what it takes to succeed as a leader.

“Before this class, I believed, like many others, that successful leaders are always extroverts, outspoken, bold, and dominating,” said Saksena, a freshman who plans to apply to Haas. She said Budak has taught her that leadership instead requires, among other things, humility, trust in yourself and others, a collaborative team spirit, and the resilience to “fail forward” after taking calculated risks. She sees leadership now as the sum of these small, daily acts that are within anyone’s reach.

Adeel Cheema, a senior computer science major who will work as a software engineer at Facebook after he graduates in May, said he didn’t know what leadership in a culture meant before taking the course. “Now I know how to lead culture,” he says.

Budak gives students many opportunities to put what they learn into practice. Throughout weekly two-hour sessions, students break into groups to discuss the topic at hand—including, for example, the role of corporate cultures on change—and their own experiences with it.

Budak’s teaching approach is to help all students recognize their capabilities as changemakers, which involves many techniques. When students arrive in class, they’re greeted with classic songs about change by the likes of Tracy Chapman, Bob Dylan, and Sam Cooke, and written quotes from some of history’s greatest changemakers. His “Changemaker of the Week” exercise gets students to select a favorite change agent and present on how course frameworks and theories apply to their impact.  For their final projects, students will work in small teams to identify a positive change they want to make on campus, in the community, or even globally, and develop a strategy for achieving it.

“A dream come true”

Budak says his commitment to fostering changemakers is deeply personal. In 2010, he co-founded the social enterprise StartSomeGood, which has helped over 1,000 people in 50 countries raise over $10 million to launch and scale new social ventures. He joined Haas in 2016, first as the founding executive director of the former UC Berkeley Center for Reinventing Leadership, and then as the director of the Berkeley Haas Global Access Program. Becoming a Changemaker is Budak’s first foray into teaching and, he says, a decade-long dream come true.

For their final projects, students will work in small teams to identify a positive change they want to make.

“In a world where the only constant is change, our companies, our communities, and our world are yearning for changemakers who can not just survive change but can leverage it to improve lives. These students give me so much hope for the future.” he said.

Ibrahim Balde, BS 20, said the course has opened his eyes to the leader he wants to be and has helped him gain confidence. Balde, who is active in student organizations such as Faces of African Muslims and Black Collectivism for California Students, came to Haas with visions of one day helping disadvantaged groups find economic empowerment.

Balde said the class, with its focus on putting lessons into practice, has been a welcome balance to courses in microeconomics and other technical business subjects.

“This class allows me to think about my mission and purpose and to understand that leadership isn’t a defined trait,” Balde said. “It’s a series of actions, a conscious effort every day to do the right thing.”

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While she was working at Microsoft several years ago, Christina Chavez, MBA 19, logged into an anonymous online job compensation board called Blind and was shocked to see the tech gender pay gap in plain sight.

“People were posting their data, and we started saying ‘whoah’ there’s some major differences in how our colleagues are getting paid,” said Chavez, who will start working at Google after graduation.

With these numbers top of mind, pay equity and transparency was a top goal for Chavez when she arrived at Berkeley Haas. She put that priority into action last fall when she and classmate Jack Anderson—a fellow member of the student-led Haas Gender Equity Initiative—set up a new spreadsheet where classmates can share all the details of their compensation packages. (The spreadsheet is managed by Jordan Sale, MBA 19, and founder of startup 81cents, which provides salary support for women during job negotiations.)

Using salary data and research provided by Berkeley Haas Prof. Laura Kray, the students created a Haas Wage Gap Infographic, which shows that women who graduated from Haas last year earned 96% of what their male peers earned. But the more concerning finding was that for alumni with greater than 10 years experience, the salary gap between men and women widened.

“We earned 96 cents to the dollar in the last MBA class and people were like ‘yeah we’re approaching equity,’ but this gap grows over time,” Chavez said.

Christina Chavez 

Moving toward transparency

The Haas students launched this project to expand what’s offered through CMG Bears —the Haas Career Management Group’s tool that allows MBA students to anonymously enter and look up salary data based on company and job role. The database offers a wealth of information, but doesn’t track salaries by gender.

Abby Scott, assistant dean of MBA Career Management and Corporate Partnerships, who worked with the students to provide historical data for the project, said the long-term salary gap is a concern. She added that Haas is working to add gender identification to CMG Bears to provide as much context to the salary data as possible.

“I don’t think that we know the real cause of the long-term pay gap, but we are advising students to make sure they’re negotiating salary and thinking beyond compensation—and we speak frequently to women about both the importance of negotiation and taking on leadership roles,” she said.

By many estimates, American women working full time earn about 80% to 85% of what men earn (a statistic that varies by race/ethnicity and how it’s measured). Kellie McElhaney, founding director of the Center for Equity, Gender, and Leadership (EGAL) at Haas, said transparency is a critical weapon in the fight to close the pay gap. “Knowledge is power,” she said, noting that a growing group of companies such as Salesforce, Gap, and Google have been moving in the right direction, toward public reporting of compensation.

In recent research, Prof. Kray and Margaret Lee, a postdoctoral research fellow sponsored by the Center for Equity, Gender, and Leadership (EGAL), looked at the Berkeley Haas alumni surveys of full-time professionals who graduated between 1994 and 2014. The researchers found that while men’s base salaries were on average about 8 percent higher than women’s, it’s in the bonuses, share values, and options—which tend to not be tracked as publicly as salaries—where the men’s salaries outpaced women’s. Overall compensation for Haas women MBAs averaged about $290,000, or about 66 percent of men’s $439,000 average. Kray and Lee also linked part of the pay gap to the fact that men manage larger teams than equally qualified women.

Tricky negotiations

It’s the company shares and stock options that are trickier in negotiations and not often tracked, Anderson said, adding that for some reason, male MBAs appear to fare better in those areas after graduating from Haas.

Jack Anderson

“That’s the thing that jumped out to me: how much of the offer goes beyond base compensation [salary and signing bonus],” he said. “So many companies are offering other compensation, RSUs (restricted stock units), and stock options. It drove us to think about how important it is for people to understand this and to get some basis for comparison. We need to work on how we display that information for people.”

But that might not be enough. In their research, Kray and Lee found that the problem goes far deeper than negotiation skills, pointing toward a bias about leadership that leads men to be put in charge of larger teams than equally-qualified women, and get paid more because of it.

McElhaney agreed that better negotiating skills will only go so far—if it comes down to the basic fact that managers just want to pay men more and that women are facing entrenched bias.

“You can change processes but the long-term problem is people’s individual biases,” she said. “If they believe things like men do a better job at leading big teams, or that women bosses are unlikable, this is unconscious and conscious bias at work.”

To access the new spreadsheet, students must agree to share their own salary data anonymously, including their preferred gender, job title and function, years of post-college work experience, geographic location of the job offer, and compensation details, including base salary, bonus, and any equity package offered. All students are asked whether they negotiated their compensation— and if so, to include the initial and final offers. So far, 58 students in the 2019 MBA class who have received job offers have added data to the sheet—split about evenly between men and women.

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Luofei Chen (center), a student in the Management, Entrepreneurship and Technology Program (M.E.T.), has joined with Aayush Tyagi (left), and Noah Adriany (right) to bring soundproof karaoke pods to the U.S. (UC Berkeley photo by Irene Yi)

During a trip to China last year, Luofei Chen arrived at the airport a few hours early. Spying a soundproof karaoke booth, he decided to pop in and kill some time singing.

“I thought I’d spend 15 minutes in it. I ended up using it for an hour and a half. I think I was the last person to get on the plane,” says Chen, a freshman in the rigorous Management, Entrepreneurship and Technology (M.E.T.) program, which awards students two undergraduate degrees—one from Berkeley Haas and one from Berkeley Engineering—in four years.

Chen, who has always enjoyed karaoke with friends, says he got hooked on the fun of singing by himself. The karaoke booth, he adds, felt “like singing in the shower, but with better equipment.”

So, when he got back to the United States, he huddled with his roommate Noah Adriany, a first-year architecture major at Berkeley who also loves karaoke, and the two decided to find a way to bring soundproof karaoke pods, already popular across Asia, to U.S. airports and shopping malls.

Six months later, their startup, Oki Karaoke, is manufacturing its first karaoke booth, and it’s on track to arrive in California from China in May. This summer, the students will pilot test the booth in the Westfield San Francisco Centre in downtown San Francisco.

Dorm development

Their mission began in their Unit 2 residence hall, where Chen and Adriany invested their own money, about $1,000, to build a rudimentary prototype — an open karaoke booth equipped with a computer tablet and a video screen that plays music videos. They spent more than 40 hours a week for two weeks creating it in a makerspace in the campus’s Jacobs Institute for Design Innovation. Then, they installed the pod in their dorm’s lounge and used it to do research on the residents

A prototype of the soundproof glass karaoke booth being manufactured by Berkeley students that will be installed in Westfield San Francisco Centre (Image courtesy of Luofei Chen)

“People really responded to being spontaneous and singing whenever they wanted to,” Adriany says. “We tracked up to 1.5 hours of singing every day with the 18-to-25-year-old age group during the two months we had the prototype installed.”

After the team took down the prototype in February, they moved forward with a plan to design Oki Karaoke’s first commercial soundproof karaoke booth. The 8-foot-tall booth, roomy enough for a maximum of four people, will have privacy options, such as curtains, for singers and will feature a video screen and a library of more than 1,000 English-language songs. Customers will be charged by the minute; further pricing details are in the works.

“Our target customers range from solo singers to a few friends to couples hanging out in the mall,” says Chen, who speaks Mandarin, prefers pop tunes and wants to add songs in Chinese to the library soon.

Mentors move it forward

Mentors, along with $5,000 in seed funding from Haas’ Trione Student Venture Fund, are helping to move Oki Karaoke forward.

Stephen Torres, a Berkeley Engineering lecturer who teaches in the M.E.T. program, helped the founders develop their idea. Torres then introduced them to alumni Kai Huang, who earned a B.A. in computer science in 1994, and his brother, Charles, who graduated in 1993 with a B.A. in both economics and Asian studies. The pair co-created the blockbuster Guitar Hero games.

“They’ve gone through a lot of the same things we’re going through now with everything from licensing to manufacturing, and they’re helping us to build our company,” Chen says.

Help from Berkeley LAUNCH

The team, which now includes a third co-founder, Aayush Tyagi, a Berkeley junior majoring in electrical engineering and computer science, is currently participating in Berkeley LAUNCH, the UC-wide startup accelerator and competition designed to transform early-stage startups into fundable companies.

Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program and who serves on the LAUNCH faculty, said business models like Oki Karaoke’s don’t automatically translate from one part of the world — like China, where solo karaoke booths are in wide use — to another.

“Applying the skills they’ve learned in the LAUNCH accelerator can help them mitigate the risk and get to success more quickly,” Shrader says.

Oki Karaoke’s founders plan to stay in Berkeley this summer to work on the business and participate in Real Startup, a Bay Area entrepreneurship program that works with companies like Google, Warner Music Group and Apple to mentor students interested in music, media or entertainment technology.

With their first booth on its way, the founders are looking forward to getting customer feedback. “If we can prove that our pod works and that people love it, then we can possibly get the money to build 10, 20 or 40 more booths,” Chen says.

He adds that he’s excited to get the Oki Karaoke booth rolled out for altruistic reasons, too.

“Singing is a way to happiness,” Chen says. “It’s a very easy way to have fun.”

NOTE: Antoinette Siu contributed to this article.

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As an entrepreneur and founder of UC Berkeley’s student-led venture fund Arrow Capital Matthew Bond, MBA 19, has concerns about the groupthink he has seen at work in Silicon Valley—such as when venture capitalists rush to invest in startups purely because other influential firms have funded them, rather forming their own views of the companies.

So when classmates Chinmay Malaviya, MBA 18, and Robert Moore, MBA 18, told him about their profound experiences participating in the Fellowships at Auschwitz for the Study of Professional Ethics (FASPE) program, he jumped at the chance to apply. He’ll be heading to Berlin May 25 for two weeks of seminars at Nazi historical sites in Germany and Poland.

Matthew Bond, MBA 19

“Businesses today focus on shareholder value without considering the social cost,” said Bond. “I hope the fellowship helps us spur conversations that develop people’s ethical muscles to the same extent as their intellectual ones.”

Bond is the sixth Berkeley Haas MBA student to be selected since 2015, when the program added a cohort of business students to its journalism, law, medical and seminary fellowships. Led by expert faculty, 14 business students along with journalism and law students from top universities will examine the role of German businesses in enabling and executing Nazi policies. Then they’ll be challenged to identify and confront the ethical issues facing businesses today.

Obsession with shareholder value is one of many topics this year’s fellowship explores, along with legal compliance versus ethical behavior; the ethics of technological and business innovations; and navigating loyalties to stockholders, customers, employees, and communities. The trip includes museum visits, a Holocaust survivor meeting, and workshops at the House of the Wannsee Conference, where the Nazi’s “Final Solution” was planned. Fellows then travel to Poland for seminars in Krakow’s Jagiellonian University and a tour of the Auschwitz-Birkenau State Museum in Oświęcim.

Bond hopes the experience will help him understand why most German business leaders looked the other way, when collectively they could’ve stopped the Nazi regime. “You’ve got a few people with awful views, but they couldn’t run a regime like that without support from tens of thousand of complicit people,” he said.

He’s especially excited because past participants Malaviya and Moore told him the program was a defining moment for them. Jean-Marc Chanoine, MBA 17, described it a “one of the most influential events of my professional life.”

After completing the fellowship, Bond plans to return to the Bay Area to join an early stage company. A U.K. native, he loves the entrepreneurial climate in Silicon Valley and is seeking mentors who can help him apply his fellowship knowledge to avoid the pitfalls of groupthink.

“Everything moves so quickly in the Bay Area, it’s critical to have an internal moral compass and reflect on whether you’re taking the right path,” he said.

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Note: The “Classified” series spotlights some of the powerful lessons faculty are teaching in Haas classrooms.

Prof. Don Moore passes around a jar filled with the titles of research papers on the psychology of scarcity. Psychology PhD student Ryan Lundell-Creagh selects the paper that he’ll have to replicate.

As a young researcher, Kristin Donnelly was captivated by the work of social psychologists who published striking insights on human behavior, such as a finding that people walked more slowly after being exposed to the words gray, Florida, and Bingo. That was one of many surprising studies that had crossed into mainstream pop culture—thanks to books like Malcom Gladwell’s Blink—but there was a problem: No one could reproduce them.

“It was a sad, dark time to enter the field,” says Donnelly, who is now a Berkeley Haas PhD student in behavioral marketing. “I was pursuing similar ideas to people who had these incredible studies, but I couldn’t get any significant results. I became very disillusioned with myself as a researcher.”

Psychology has been rocked by a full-blown replication crisis over the past few years, set off in part by a 2011 paper co-written by Haas Prof. Leif Nelson. It revealed how the publish-or-perish culture—which rewards novel findings and did not reward attempts to replicate others’ work—led researchers to exploit gray areas of data analysis procedures to make their findings appear more significant.

Professors Leif Nelson and Don Moore are leaders in the open science movement.

Now Nelson, along with Prof. Don Moore, is working to train a new generation of up-and-comers in methodologies that many see as key to a rebirth of the field. This semester, they’re leading Donnelly and 22 other doctoral students from various branches of psychology in what may be a first for a PhD seminar: a mass replication of studies around one psychological theory: to see how well they hold up.

“We aren’t doing this because we want to take down the literature or attack the original authors. We want to understand the truth,” says Prof. Don Moore, an expert on judgement and decision-making who holds the Lorraine Tyson Mitchell Chair in Leadership and Communication. “There are many forces at work in the scientific publication process that don’t necessarily ensure that what gets published is also true. And for scientists, truth is at the top of the things we ought to care about.”

Examining the psychology of scarcity

The theory they’re examining is the “psychology of scarcity,” or the idea that being poor or having fewer resources actually impairs thinking. Moore and Nelson chose it not because of an inherent flaw, but because it’s relatively new (defined by a 2012 paper), high profile, and relevant to the students’ interests. Each student was randomly assigned a published study, and, after reaching out to the original researchers for background details, is attempting to replicate it. Results will be combined in a group paper.

“At Berkeley, we’re at the epicenter of this new methodological and statistical scrutiny, and as a young researcher I want to do good work that will replicate,” says Stephen Baum, also a PhD student in behavioral marketing at Haas. “Most people were willing to take things at face value before 2011. Things have changed, and we all have to do better.”

Berkeley Haas PhD student Derek Schatz chats with Graduate Student Instructor Michael O’Donnell and professors Leif Nelson and Don Moore during a class break.

Moore and Nelson are leaders in the growing open science movement, which advocates for protocols to make research more transparent. Nelson, along with Joseph Simmons and Uri Simonsohn of Wharton, coined the term “P-hacking” in 2011 to describe widespread practices that had been within researchers’ discretion: removing data outliers, selectively reporting data while “file drawering” other results, or stopping data collection when a threshold was reached. These practices, they argued, made it all too tempting to manipulate data in pursuit of a P-value less than 0.05. That translates to a less than 5% chance that the results were due to pure chance, and it’s the standard for demonstrating statistical significance and the threshold for getting published.

Building confidence through pre-registration

At a recent session of their PhD seminar, Moore and Nelson led a discussion of one of the key ways to combat P-hacking: pre-registering research studies. It sounds arcane, but it’s simply the grown-up equivalent of what grade-school teachers require students to do before starting on their science fair project: Write out a detailed plan, including the questions to be answered, hypothesis, and study design, with key variables to be observed.

“How many of you are working with faculty who pre-register all their studies?” asks Nelson, a consumer psychologist in the Haas Marketing Group and the Ewald T. Grether Professor in Business Administration and Marketing. Less than half the class raises their hands.

Nelson and Moore estimate that only about 20% of psychology studies are now pre-registered, but they believe it will soon become a baseline requirement for getting published—as it has become in medical research. Although there’s no real enforcement body, the largest pre-registration portal, run by Brian Nosek of the Center for Open Science, creates permanent timestamps on all submissions so they can’t be changed later. Nelson co-founded his own site, AsPredicted, which now gets about 40 pre-registration submissions per day. It’s patrolled by a fraud-detecting robot named Larry that dings researchers for potential cheats like submitting multiple variations of the same study.

“Without pre-registration, statistics are usually, if not always, misleading,” Moore tells students. “They aren’t entirely worthless, but they’re worth less.”

The class is the largest PhD seminar that Moore has ever taught.

Gold Okafor, a first-year PhD student studying social and personality psychology, says she plans to pre-register all her future studies. Though it requires a bit more work up front, it may save time in the end. “I think if you don’t use some of these methods, you could be called out and have your work questioned,” she says.

Students are also learning techniques such as P-curving, which is a way to determine the strength of a study’s results and whether data manipulation may have occurred. They’re also learning from guest lectures from other open science leaders, including Economics Prof. Ted Miguel and UC Davis Psychology Prof. Simine Vazire, who edits several journals.

The bedrock of the scientific method

Then there’s reproducibility, one of the bedrocks of the scientific method and the heart of the course. The American Psychological Association now promotes systematic replications, where multiple researchers around the world all re-create the same study. (PhD student Michael O’Donnell, who is assisting Nelson and Moore in teaching the course, recently led one such effort that cast doubt on a study finding that people who were asked to imagine themselves as a “professor” scored higher on a trivia quiz than those who imagined themselves as a “soccer hooligan.”)

Baum, the marketing student, will be replicating a psychology of scarcity study that was published in the flagship journal Psychological Science. The researchers asked people to recall a time when they felt uncertain about their economic prospects, and then write about how much pain they were experiencing in their body at that moment. The finding was that those people reported feeling more pain than those in a control group prompted to recall a time when they felt certain about their economic prospects.

“If it replicates, I will be surprised, but I’ve been wrong before,” Baum says.

No matter what the results, the replications will offer important new insights into the psychology of scarcity—important to understand in a society plagued by growing inequality, Moore says. Beyond the one theory, the fact that the course has the highest enrollment of any PhD seminar he’s ever taught gives Moore great hope for the future.

“The stakes are high,” he says. “The most courageous leaders in the open science revolution have been young people—it’s the doctoral students and junior faculty members who have led the way. The next generation will be holding themselves, and each other, to higher standards.”

Donnelly is a case in point. “This whole movement has made me a better researcher. I’ve changed what questions I ask, I changed how I ask them, and I changed how I work,” she says. “It’s a brave new world, and we may be able to lay the foundation of a new science that will build on itself.”

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A rule designed to make executive compensation more transparent has instead given companies a tool to push CEO pay even higher, according to an analysis by researchers at UC Berkeley’s Haas School of Business and Columbia University.

Since 2006, the Securities and Exchange Commission has required public companies to name a group of peer companies that they use to benchmark their chief executives’ salaries, giving investors and the public a reference point to judge whether CEO paychecks are within reason. But while benchmarking is a good idea in theory—applauded by corporate governance experts—in practice companies tend to cherry-pick peers with highly paid CEOs, says Berkeley Haas Asst. Prof. Mathijs De Vaan.

“We found strong evidence that the benchmarking process has been systematically gamed,” says De Vaan, an economist in the Haas Management of Organizations Group. “Peer groups are assembled more to legitimize excessive pay than to provide objective information about an appropriate level of compensation.”

Not only that, but companies are even more likely to skew their peer group when their CEO underperforms, De Vaan concluded in a new paper published in the journal Management Science and coauthored by sociologists Benjamin Elbers and Thomas A. DiPrete of Columbia University.

Dramatic rise in CEO pay

Mathijs De Vaan

The dramatic rise in executive pay in recent years is fueling the growing income inequality that has become a first-order public policy issue, economists have found. Average CEO compensation jumped 12% per year from 1980 to 2004, swelling from $625,000 to $9,840,000. And while the median market capitalization for companies in the S&P 1500 grew just 22% from 2007 to 2014, median CEO compensation grew 39%, according to the paper. To allow for more public scrutiny of CEO pay, the SEC began requiring companies to disclose what peer companies pay their chief executives.

Skewed peer groups

Since then, a number of researchers have looked into whether this executive compensation benchmarking process is fair and unbiased, but measuring it has proved tricky. De Vaan and his coauthors came up with a novel way of determining whether compensation benchmarks were skewed toward higher salaries. Using data from more than 3,400 companies that reported compensation peer groups to the SEC between 2006 through 2016, they developed a model to generate alternative benchmark​ groups that were free from bias. They did this by creating reciprocal groups of peers—that is, if company A compared its CEO’s pay with that of company B, company B would also ​benchmark against company A. They used the model to simulate hundreds of alternative peer groups, and then compared these with the benchmark​ groups​ companies actually used.

The results strongly suggest that companies typically chose a skewed sample of highly paid CEOs. Not only that, but these skewed peer groups were closely associated with real increases in CEO compensation. In other words, benchmarking was used to justify high pay, and CEOs benchmarked against highly paid peers were paid substantially more, they concluded.

Underperformers get bigger rewards

In fact, the researchers found that benchmarking is even more skewed when CEOs fail to meet their performance targets, such as stock market value and profit. De Vaan and his coauthors found new evidence that these underperforming CEOs get especially generous pay packages. The researchers’ statistical analysis showed that decreases in returns on assets—a standard profitability measure—were associated with wider gaps between the selected peer group and the simulated peer groups created by the researchers.

“If you’re a CEO who doesn’t perform well, your compensation should be adjusted downward,” De Vaan says. “One way companies prevent that is by introducing more bias.”

The authors also found that companies that had greater discretion in choosing peer firms, perhaps because they didn’t fit neatly into an industry category, tended to use that flexibility to select peer groups with even higher-paid executives.

Finally, De Vaan and his coauthors looked at how peer-group benchmarking has changed over time. They found that the average level of bias has diminished, which may reflect growing shareholder and regulatory pressure on companies to avoid abusing the disclosure process. However, the association between peer group bias and executive pay has increased over time, meaning that CEOs get greater financial gains from skewed benchmarking now than they did in the past.

A role for watchdogs

Why don’t boards push back? The researchers point out that board members may want to maintain cordial relationships with their CEOs, and also that they tend to be executives themselves, and may be inherently biased toward increasing executive pay.

Although the authors did not explore the indirect effects of peer-group benchmarking, De Vaan thinks it’s probable that biased benchmarking by some companies may also affect firms that aim to select an unbiased set of peers. When a company skews its peer group to push up its own CEO’s pay, that in turn becomes a potential reference for other companies. “Given the network nature of this process, it is difficult to be honest,” he says.

Is there a way to stop the merry-go-round? De Vaan thinks probably not, as long as companies select their own peer groups for benchmarking. But the story would be different if industry watchdogs or regulators created unbiased peer groups for companies that were similar in size and business mix. That would allow benchmarking to do what it is supposed to do—give shareholders an objective way of evaluating whether CEOs deserve their pay.

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