Dean’s Blog

Jerry Stritzke -- REI CEO

Posted by Joseph Phillips, Jr. on June 1, 2014 at 5:06 PM PDT

On May 29th, our Marketing Club, which is now affiliated with the American Marketing Association, hosted Jerry Stritzke, new CEO for REI.  Stritzke has been CEO at REI since October. 

 Stritzke is the seventh CEO in the history of REI, and he mentioned that he would be meeting with Jim Whitaker, one of his predecessors.  I made sure to tell him that Jim, the first America to climb Mt. Everest, is an alum of Seattle University, having played basketball at SU in the early 1950's!

Stritzke started his presentation by tracing his career path, explaining how he went from being a less than diligent student to becoming CEO of REI, with stops at Coach and Victoria Secret along the way.  His point was to illustrate to students that their careers can move in unpredictable ways.

Stritzke then moved to give some advice on managing one's career.  He noted the importance of networking, and how it had been critical to his success.  Second, he emphasized the importance of picking your own boss, someone who would be supportive and successful in his or her own right, because as the boss succeeds the boss can do more for you.  Third, pick the best experience, not the highest paying job.  Early in your career it is important to get experiences that will make you a more productive and talented worker.  These are not necessarily the positions that will generate the most income.  If you pick the roles that will offer the most learning, it is bound to reward you later.

He ended with some thoughts on leadership.  First, it is important to ask great questions.  You have to be able to learn from others with the situation really is.  Second, leaders have to be life long learners.  They have to know how to learn and keep improving themselves.  Finally, leaders need to understand "it's not about me."  They need to know they are in their role to move the organization forward by empowering those who are part of the organization.

It was the final event of the year for the Marketing Club, and the club certainly went out with a bang!  Congratulations to the club for inviting a leader of the caliber of Jerry Stritzke to campus.  We'll have to get him back someday soon!

42nd Annual Accounting Awards Banquet

Posted by Joseph Phillips, Jr. on June 1, 2014 at 5:06 PM PDT

The 42nd Annual Accounting Awards Banquet took place on May 30th.  Forty-two years speaks to a strong tradition for our Department of Accounting.  No wonder our accounting graduate program is ranked fourteenth in the nation by US News and World Report!

The evening featured the awarding of 15 scholarships, three academic awards, and one service award.  Beta Alpha Psi, the accounting academic honorary, also presented eleven leadership awards to members.  Our BAP chapter is top notch, having won the BAP Gold Chapter Award for three consecutive years.  Only a handful of the over 300 BAP chapters nationally receive this award each year, so to win in three consecutive years is exceptional.

Professor Sarah Bee and Dominique Vincenti, chair of our Internal Audit Advisory Board, received the prestigious Chair's Award for their contributions to the development of our Internal Audit program.  The Chair's Award is given each year to someone who provides outstanding service to the Department of Accounting.

Congratulations are in order to the Department of Accounting on the occasion of its 42nd Annual Accounting Awards Banquet!

Jim Weber -- Brooks CEO

Posted by Liz Wick on May 28, 2014 at 6:05 PM PDT

Jim Weber, President and CEO of Brooks Running, was the speaker at the Albers Executive Speaker Series on May 27th. The title of his talk was, "Building a Loved Running Brand," and he gave an enthusiastic, high energy presentation that began with him declaring he has "the best job in Seattle!" And now Brooks is in Seattle and will move into its new Fremont-based headquarters in August. 

This is the 100th year anniversary for Brooks, which was founded in my hometown of Philadelphia. When Weber took over in 2001, Brooks was a full-line athletic footwear and apparel company, and having little success in trying to be "everything to everybody." Weber shifted the strategy to focus on high end running shoes at a time when that was unusual and risky - and it worked. Although annual revenues initially fell from $65 million to $45 million, today Brooks is now over $500 million and climbing.


Brooks did this by establishing a brand that is about "celebrating the run," and no other company is positioned this way. This required producing high quality product that creates trust, but also establishes a connection with the customer who takes running seriously. Brooks has strived to create an inspirational brand, as opposed to Nike which has created an aspirational brand via celebrity endorsements.

Weber closed his opening remarks with some insights on leadership. First, "you have to have a point of view." You have to have a vision and know where you want to take the organization. Second, "you have to play to win." Decide what markets you are going to operate in and invest to do well there. Don't have a bunch of businesses that suffer from lack of resources and investment. Third, "play for the long haul." Do not focus on short term results and understand that success does not come overnight. Great businesses are built over decades, not years.


In the Q&A, Weber was asked about the company's commitment to sustainability. He clarified that for Brooks, sustainability is a value, it is not a strategy. It is want employees want to stand for. People will not pay more for elements of sustainability in the products they purchase.


Weber said that from 2001 to 2009, the company focused on what runners needed, doing significant scientific research on how their shoes should be designed for comfort and performance. After 2009, Brooks started listening to customers to see what they wanted. This resulted in more changes to design and appearance - for example, more distinctive colors and look. For several years, Brooks' pivot to high end running shoes was under the radar, but by 2007 others started jumping into the market, including specialty retailers such as North Face and other shoe companies such as Puma. No one limited themselves to the running category, however.


Weber emphasized the important role that high quality products play in building trust. Brooks needed to become a trusted brand, and to be trusted required high quality product. He also noted the importance of winning over "key influencers," which in the running world is the staff working in specialty running shops, sports medicine personnel, physical therapists, etc….

When asked about sensor technology and wearable sensors and how that would be incorporated into the running products of the future, Weber answered that while that technology would become increasingly popular, he did not think it would end up in shoes and apparel. Instead, it would be incorporated into other items such as ear buds. In other words, he did not think Brooks needed to be investing in that - someone else is going to control that space.


In response to a question about what were the most useful topics he learned about in business school, his answer was that he found his business strategy classes to be very useful, especially working through case studies. Leadership was another area that was very valuable. Everything he learned about leading and connecting with people has been very important in contributing to his success. Disappointing to see him get this wrong and not mention ECONOMICS as the most useful topic in b-school! :}



Business Plan Competition 2014

Posted by Joseph Phillips, Jr. on May 21, 2014 at 9:05 AM PDT

The Sixteenth Annual Harriet Stephenson Business Plan Competition took place on May 20th.  There were over 200 in attendance.  The $10,000 Grand Prize Winner was   Wanderlust featuring undergrad students Alex Walz and Jonathan Parsay.  Wanderlust is an on-line platform for cross-cultural communications that empowers travelers to meet-up, and share insights, with locals and like-minded fellow travelers.

Receiving the $5000 Meisenbach Prize for Second Place was Skywise, led by LEMBA student James Faulknor and Richard Farnsworth.  Skywise is a Veteran owned consulting agency to address the need for efficient policy navigation by drone operators.

The Third Place Awards of $3000 went to Shadow Dog Industries, developed by undergrad students Tyler Petersheims and Cyrus Fien, and Unleash the Brilliance, presented by undergraduate students Tim O'Reilly and Amanda Waite along with Terrell Dorsey.  Shadow Dog provides portability to a musician's amplifier. It also doubles as a stage platform that enhances the sound coming from the amplifier.  Unleash the Brilliance is a not for profit organization that assists youths in creating successful ventures inside and outside of school.

All the teams made great presentations and made it very hard on the panel of judges.  From time to time some have wondered about the wisdom of allowing undergraduate students to compete with grad students, noting that grad students would seem to have an advantage.  Perhaps that is true, but three of the four finalists this year were undergraduate teams, suggesting that undergrads can hold their own!

Professor Harriet Stephenson was recognized at the awards ceremony for her many contributions to the business plan competition and entrepreneurship education over the course of her career at Seattle University.  That's why the competition is named after her!  Harriet is retiring at the end of this academic year after 47 years of service to Albers and SU!  Thank you, Harriet!

Business Ethics Week 2014

Posted by Joseph Phillips, Jr. on May 13, 2014 at 3:05 PM PDT

May 5-9 was Business Ethics Week in the Albers School.  Throughout the week, nearly 70 business professionals visited more than 100 classes to discuss a business ethics challenge they had faced at some point in their careers. Over 80% of Albers classes participated.  There were also three keynote speakers during the week:

    Howard Behar, former President of Starbucks International, on May 5th.
    Andy Hinton, VP for Ethics and Compliance at Google, on May 6th.  He also spoke at the Albers Alumni Breakfast Series the morning of May 7th.
    Nancy Higgins, VP for Ethics and Compliance at Bechtel and Carolyn Barton, Chief Compliance and Ethics Officer at Group Health, on May 7th.

The purpose of Business Ethics Week is to emphasize to students the importance of ethical behavior in the conduct of business, and to show that it is essential in order to be successful as a professional.  The idea for Business Ethics Week came from the advisory board of the Center for Business Ethics.  Originally, the idea was to have members of the board pick a day and cover classes throughout the day.  We challenged the board to cover all the classes meeting on a particular day and to include other business professionals.  In the first year, the event went reasonably well, but we received inquiries from students and faculty members who were not in class for what was Business Ethics Day.  In the second year, we established Business Ethics Week, which would allow more classes to participate. We tried to cover all the classes meeting during a week, and ended with 84 classes participating, about 70% coverage.  This was the third year and the second year for Business Ethics Week, and we were able to expand coverage to over 100 classes. 

Business Ethics Week was sponsored by the Albers Center for Business Ethics, with Professor Marc Cohen and grad student JP McCarvel doing much of the work.  Congratulations to them on a successful Business Ethics Week!

Albers Awards Ceremony 2014

Posted by Joseph Phillips, Jr. on May 10, 2014 at 4:05 PM PDT

The Albers School Awards Ceremony for 2014 took place on May 9th in Pigott Auditorium. Twenty four awards recognizing student academic achievement and leadership were given to Albers students. Some of the awards included;

The Spirit of Albers Award was given to economics student Megan Morris. Megan has worked for NGO's in India and Peru while also maintaining a high academic performance. She has also interned with a local labor union and presented two papers at the National Undergraduate Research Conference, one on how the minimum wage law impacts the gender wage gap and one on how foreign aid impacts economics development. Megan was recognized for her academic and service work.

Tim O'Reilly received the Albers Undergraduate Service Award. Tim has played an important leadership role in our ENACTUS chapter, and in the process been involved in many service activities, stretching from Seattle to Nepal.

Loc Nguyen received the Albers Graduate Service Award. Loc has served as president of the Albers Graduate Student Association and helped re-establish the group as an active organization.

Margaux Helm received the Paul A. Volpe Award for the graduating business senior with the highest academic performance. Margaux will also receive the President's Award at graduation, given to the senior graduating from the university with the highest academic performance. Margaux will share the award with three other SU students this year.

The Volpe Award is named after Paul Volpe, the founding dean of the Albers School who served as dean from 1947 to 1965. Just so you know, I am planning on passing that guy in five years as the longest serving dean at Albers! :}

Robert Hall received the Jerry A. Viscione Award for the highest academic performance among our graduate students. Robert is a student in our Professional MBA program.

Viscione was dean of the Albers School from 1986 to 1997, when he left SU to become Executive VP at Marquette.

After the awards ceremony, the 2014 Beta Gamma Sigma installation took place. BGS is the academic honorary for business schools accredited by AACSB. Fifteen juniors, twenty seniors, and 47 graduate students were installed in BGS. The ceremony was organized by chapter advisor, Dr. Fred DeKay.

Dr. Bill Weis received the BGS Professor of the Year award, as voted on by the BGS students. Congratulations to Bill!

Shanghai 2014

Posted by Liz Wick on May 5, 2014 at 4:05 PM PDT

April 24-28 I travelled to Shanghai to visit with our partner school, Shanghai International Studies University (SISU). There were two items on the agenda. The first was to attend a conference hosted by SISU on "The Shanghai Free Trade Zone and Preparing Interdisciplinary Students for the Global Economy." This may seem like an odd pairing for a conference, but the two are connected in the sense that Shanghai is looking to its relatively new FTZ as a catalyst for growth through innovation, and they know they need to prepare creative and entrepreneurial leaders to succeed, thus the second theme of education.


I was asked to make a presentation on trends in business education. First I discussed the new environment higher education faces in terms of the disruptive change being caused by technology and the increased challenges coming from the affordability of higher education. I then explored four important trends in business education -- increased emphasis on the integration of liberal arts education in undergraduate programs, increased emphasis on application and experiential education, the globalization of the educational experience, and increased attention to the role of business in society. The full remarks are below, but I don't recommend reading since there are few insights given its length. :)


The conference ended up discussing two interesting themes. First, there is a strong desire in Shanghai to turn the city into a major financial center, the likes of New York or London. This will be challenging for the city, considering the head start that Hong Kong has and that Beijing is headquarters for many of China's major financial institutions and national government. If a major financial center is to emerge in the Asian region, Shanghai will be hard pressed to be that city.


The second item that arose was the strong desire to have the Renminbi emerge as the dominant currency in the world market, replacing the US dollar. Many at the conference seemed quite focused on how the RMB had passed other currencies in trading levels. Surpassing the dollar is another matter. There are several issues that will slow down China in this quest, including lack of transparency in the government sector. While the world is amazed at the dis-function in Washington, DC, at least it can see what is going on. In China, one can only guess, and that does not sit well with global investors.


Second, the Federal Reserve is well understood by financial markets, performed well in the Great Recession, and enjoys political independence. China's central bank is neither understood nor independent.


Third, China has a fixed exchange rate and financial markets prefer a flexible rate, not trusting government currency intervention. China will be reluctant to allow for a float for the foreseeable future because of the impact on economic activity. The US, on the other hand, is much less dependent on trade and changes in the exchange rate have a limited effect on most of the population. This allows the government to worry less about exchange rates since political backlash is more muted. Not the case in China for now and the foreseeable future.


Fourth, China lacks the volume of financial activity and the major financial institutions the US has. This will no doubt change over time, but in some respects it is the least important factor. The institutional and governance issues are more important and unlikely to change for quite some time.


My second reason for visiting SISU was to meet with SISU students interested in enrolling in our 3-2 program with SISU for our Master of Professional Accounting degree. Students attend SISU for three years, then come to SU for two years to study accounting. The students earn their undergraduate degree from SISU and their MPAC from SU. We have been offering this program for several years and the results have been very good. The students are very smart and hard-working and their English is excellent. After all, SISU is a university that focuses on foreign languages, with students required to master a foreign language, and they do a terrific job training their students in English! 


This year I interviewed six students, all of whom I know would be excellent students at SU. I hope we see all of them starting our MPAC program in September!


Here is a picture of me at Nanjing Road during my recent visit to Shanghai:





Here is the text of my presentation on business education:


I am delighted to have this opportunity to speak at this "International Conference on the Influence of the Shanghai Free Trade Zone &Training of Inter-disciplinary Students in a Global Context." Seattle University is very proud to have been able to partner with the Shanghai International Studies University over the last few years, one of China's most distinguished institutions of higher learning. What has impressed us the most about the university is how well you do on the most important measure of a university's success - the accomplishments of your students and alumni.

If you will indulge me, I would like to speak on emerging trends in business education. My perspective is mostly through the lens of someone working in the US, but I have some global exposure from serving on a board for a global network of universities, as well as sitting on the Initial Accreditation Committee of AACSB (a global business accrediting body) and seeing information on many schools outside of the US who are applying for AACSB accreditation, including schools from China. Thus, I will endeavor not to provide a purely US-centric perspective.


Certainly, higher education in the US has faced a rapidly changing environment since the Great Recession, and schools, including our university, have been scrambling to respond to a new environment. The two factors that we must contend with are the role of technology in education, and the second is the affordability of higher education. Both these are impacting all areas of higher education, including business education.  


With respect to technology, we have been hearing much about the disruptive nature of technology on higher education, best illustrated with the growth of MOOCs. They are seen as a threat by many and an opportunity by some. But really, for at least a decade many of us have been bracing for the impact of technology on higher education. We just did not know when it would start to impact traditional providers and in what form. The impact has been gradual and steady. We did not wake up one day and suddenly face a different world.

On-line delivery has slowly rolled out as different institutions one by one decide to begin those programs. My own institution has been very late to this party, and even now we do not really think about 100% online programs. This is because we want to preserve the personal attention we provide to our students, and want to be sure the use of technology does not disrupt that.

Instead, we are positioning ourselves to provide "hybrid" or "blended" programs that use both traditional face-to-face education and technology. The technology tools are getting better and they have allowed us to offer a better education to students, to be more successful in what we try to accomplish in our programs. Increased convenience coming from the use of technology is helpful, but by itself not the sole driver.


Increased convenience of delivery does have some impact on us, though, particularly for our graduate students who mostly work full-time and go to school part-time. We do believe that switching some of the course content on-line and coming to campus less often will be attractive to students trying to balance work, family, and school responsibilities.

While we do not see ourselves doing degree programs 100% on-line, we are looking at on-line certificate programs, particularly in niche areas where we might have specialized expertise.

All that said, I think this technology territory is changing very fast and what I say today could be very different a year from now.

The second issue is affordability. Several things have been happening in the US that impact affordability. First, taxpayer subsidies of public institutions are declining, so state schools are responding by raising tuition and pursuing students who pay higher out of state tuition rates (including students from abroad). Second, employers are cutting back tuition support programs for their employees, so students must rely more on their own financial resources. This especially impacts business graduate programs. Third, students are graduating from undergraduate studies with more debt, and this makes them less willing to take on more debt for graduate school. Fourth, private schools like my own, and increasingly public schools, have been raising tuition well above the rate of inflation year after year. This is not a sustainable practice in any industry. These high tuition levels are supporting high cost structures. In the US, we have lots of brick and mortar infrastructure and we are labor intensive, and both are costly. We are stuck in a "high-cost high-price" model.

On the one hand, these affordability trends should help our undergraduate programs because affordability issues should make students more career-focused and that should benefit undergraduate business enrollment. On the other hand, they should negatively affect our graduate enrollment because students do not want to take on more debt, they get less assistance from employers, and they hear a drumbeat of criticism of the value of an MBA degree.

As a consequence most business schools in the US are focusing on their graduate programs these days. They are shortening the time to degree, they are promoting certificates instead of degrees (because they require less time and expense), and they are creating one year graduate degree programs that attract students from overseas, including students from China. Some schools are also using 100% on-line programs to fill the gaps they have been experiencing.

My sense is that technology and affordability are also issues outside the US, but not to the same degree, at least not yet. It varies by region, of course, with the UK and Australia being much more aggressive in the use of technology. I will be interested to hear from you how you think this plays out in China!

So against this backdrop, let us talk about some emerging trends in what we deliver. There are four I will mention - liberal arts education, globalization, experiential education, and the role of business in society.

The first is an increasing emphasis on including liberal arts education in business education. Some private schools, including my own, have had this emphasis all along, but more schools are moving in this direction and being more intentional about integrating the liberal arts curriculum with the business curriculum as opposed to teaching them in silos. Note how this coincided with the interdisciplinary education theme of our conference!

This interest in liberal arts education in business can be illustrated by a book that was written in 2011, Rethinking Undergraduate Business Education, authored by Anne Colby, Thomas Ehrlich, William Sullivan, and Jonathan Dolle. The book suggests that we need to move beyond narrow technical business training to encourage creativity, critical thinking, sound judgment, and pursuit of the common good. It is hard to argue with this message. In response, the Aspen Institute launched a program to encourage this among business schools, the Aspen Undergraduate Business Education Consortium. The consortium works to integrate liberal learning and undergraduate business education. Approximately 40 business schools from around the world participate in the program, ranging from ESADE in Spain to the University of Pennsylvania in the US, and also includes my institution, Seattle University. It is important to note this applies to the undergraduate business degree. Graduate degrees are too specialized to take on this role.

A second trend, not especially new, but gaining increasing momentum, is the desire to globalize the educational experience. Thus, you have an ever increasing number of study abroad programs, international study tours, and other experiences overseas. This has led to increasing numbers of collaborations between universities in different countries, such as SISU in China and Seattle University in the US. There are increasing numbers of programs mixing cohorts from different countries, such as one program I know of that brings together students from China, the US, and Spain, and students participating in those programs at three different locations - China, the US, and Spain. Note that these initiatives are experiential and not just impacting the curriculum.

A related part of this is the globalization of student recruiting, not necessarily new, but something being done with greater frequency and by more players. So, now you have schools from Europe, the US, and Australia vigorously recruiting Chinese students. Soon the shoe will be on the other foot, as China and others will be recruiting students from those regions. At this point, there does not seem to be aggressive recruiting in the US by schools from overseas, but one can see that this will be changing going forward.

Globalization has given impetus to partnerships between schools in different nations. It only makes sense to have a partner on the ground who understands the market, the rules and regulations, etc… But increasingly you are seeing schools within countries partner, even schools that you might think would see themselves as competitors. What is driving this I think is the high cost structures we have in place. As an example, rather than start a costly engineering program we can have students take two years of general education at one university and send them somewhere else for the final years of specialized engineering education. Those programs existed years ago but over time they were not vigorously promoted. Now they are gaining new life.

A third trend is to make education more experiential, more applied. So, we are going to industry and non-profits for projects for students to work on. We are encouraging students to participate in internships. We are doing this because we have found out that this is how people learn, and it is a more interesting experience for the student. It is not just happening outside of class, but also in the classroom. Lecturing is disappearing in classrooms. It is more problem solving exercises, case study discussions, and student presentations. Technology facilitates the disappearance of lectures. Faculty record short segments of material and students watch those outside of class. Class time is left for higher order activity. This has been called "flipping the classroom," and it has been facilitated by the two trends of an increasing focus on application and improving technology.


I think a parallel trend will be increased co-curricular requirements for graduation. It will not just be the courses students take, but what other requirements do they have for graduation. Such requirements are not new, but they will become more prominent as they are facilitated by an applied approach to education. For example, you will see more schools requiring internships, requiring study abroad, requiring Excel certification, etc… with none of that tied to a specific course in the curriculum.

A final trend is much more discussion in the curriculum of the role of business in society. Some schools have always emphasized business ethics and social responsibility. They have always raised questions about the role of business in society. They have always addressed social responsibility, but with each business scandal there seems to be increased awareness of the need for schools to articulate that business is not about maximizing shareholder value and wealth accumulation, but rather business has a more noble role to play in terms of providing employment and income to workers, in terms of providing goods and services that meet genuine human needs, and doing all this in a sustainable way that does not compromise future generations. At Seattle University we have always approached things this way, but even we feel like we must be even more intentional about it. So, in recent years we established a Center for Business Ethics, we began hosting something called "Business Ethics Week," which brings business leaders to campus to speak to every class meeting that week about a business ethics challenge (to signal to students its importance), etc…

On top of what individual schools are doing, you have other entities giving emphasis to it. So, for example, you have AACSB making ethics part of its expectations for accreditation. Or, you have the development of the United Nations Global Compact spinning out a program for higher education, the Principles of Responsible Management Education (which nearly 600 business schools worldwide participate in).

So to conclude, business schools have found themselves in a new environment where changing affordability and changing technology are having profound impacts on our operations. Against this backdrop, schools are responding with new programs and new approaches. Part of the response includes weaving new elements into our approach to business education. Four trends that I have identified are greater emphasis on liberal arts education, globalization, experiential education, and the role of business in society. They are all highly relevant to our conference theme of "Preparing Inter-disciplinary Students in a Global Context."

Thank you for your attention and the opportunity to speak to you today, and I look forward to further discussions and your insights on the important themes of our conference.

John Williams Returns

Posted by Joseph Phillips, Jr. on April 29, 2014 at 5:04 PM PDT

John Williams, President of the Federal Reserve Bank of San Francisco, spoke at the Albers School about monetary policy on March 5th.  He was disappointed that there was not more time for questions from the audience, so he volunteered to teleconference with students on April 21st.  That morning, 25 Albers students and faculty gathered for a Skype conversation with Dr. Williams.  He was in his office in San Francisco.  We were in the Puget Energy Room.


He answered a few questions he had received in advance, then turned it over to students for more questions.  They asked about everything from how much work it takes to prepare for an FOMC meeting to how he would contrast the styles of the three Fed Chairs -- Greenspan, Bernanke, and Yellin.  It was a unique opportunity for some of our students, and we appreciate Dr. Williams wanting to make a return visit to Albers!  He is for sure the first participant in the Albers Executive Speaker Series to follow up with a Skype meeting! :)

Here is a picture of John Williams in his office Skyping with Albers students and faculty.



Diane Jurgens

Posted by Joseph Phillips, Jr. on April 29, 2014 at 10:04 AM PDT

Diane Jurgens, Managing Director of Shanghai OnStar, participated in the Albers Executive Speaker series on April 23rd.  Shanghai OnStar is a telematics joint venture of GM in China.  Diane has been a leader in China for GM for more than eight years.  The title of her presentation was, "China: Successfully Navigating the Middle Kingdom."


Diane opened her remarks by recounting her leadership journey.  It began when she was in a leadership development program with Boeing, her employer at the time, and realized she did not have the business training she needed to complement her engineering background. That led her to enroll in our MBA program, and her experience in the program opened her up to the possibility of working globally. Soon after graduation she left Boeing to take a position with GM, and she ended up in China in 2005.


Diane stressed that one ingredient to GM's success in China (the number one car seller in China in seven of the last eight years) was using local partners, who understand the local consumer and how to navigate the political and legal systems.


She noted that one of her struggles in China as a leader has been to get people comfortable with autonomy.  The typical leadership style in China is hierarchical, but she is to a team approach and decentralized decision-making.  She has had to work hard to get her colleagues to embrace this behavior -- they are afraid to make a decision without asking her.


It turns out that the Chinese consumer is a more intensive user of On Star than Americans are.  They are more intensive users of directions because there are always new roads under construction and it easier to keep abreast of the changes with OnStar.  It is also the case that the Chinese consumer has higher expectations for product quality.


When asked what was most important about her SU education, she mentioned two things.  First, ethics and integrity has to be the foundation for everything you do.  Second, she was introduced to the important concept of sunk cost, a tool she has found herself using many times.  For example, if you have invested in a new program and it not working, you don't keep spending on it to "protect your investment."  Instead, you cut your losses and get out of that program.


Diane was also asked what it was like to work in two male dominated industries, aerospace and automobiles.  She responded that in the past she would try to ignore all gender related issues and just let her performance determine her path.  But she has come to realize the importance of mentoring other women with their careers.  She thinks women who have achieved success need to pay it forward and assist other women to have successful careers.


It was a pleasure to welcome Diane Jurgens back to campus, one of the few American females in a leadership role in China's manufacturing sector.  That makes her a great role model for many SU students.


Ironically, the next day I flew to shanghai to visit a partner university, Shanghai International Studies University.  Diane, on the other hand, was flying on to Detroit for a meeting at company headquarters!

John Williams

Posted by Liz Wick on March 9, 2014 at 3:03 PM PDT

On March 5th, John Williams, President of the Federal Reserve Bank of San Francisco, visited Albers to speak in the Albers Executive Speaker Series. Since Williams serves on the Fed Open Market Committee (FOMC) and helps set US monetary policy, this was a special opportunity for our students and a true privilege for us to host him. It is the dream of every Money and Banking professor (and every former M&B professor like me!) to have a member of the FOMC on campus!


Nearly 300 students, faculty, staff, and friends gathered in Pigott Auditorium for his talk on, "The Federal Reserve: Inside Monetary Policy." In the talk, he wanted to address three questions: (1) What is so important about the Fed?; (2) What does the Fed actually do?; and (3) How does the Fed impact the economy?


On the first point, he noted that only the Fed sets monetary policy for the US, which is important for both the domestic and global economies. The Fed does this in a non-partisan way and thus far has been able to maintain its political independence.  Williams also noted that the Fed has become much more transparent about monetary policy, which most observers see as a much welcome development.


While the Fed supervises banks and oversees the payments system, its most important function is to set monetary policy. The primary instrument for this is buying and selling securities through open market operations.  We used to say Treasury securities, but since the Great Recession the Fed has shown it is willing and able to buy and sell other securities! Williams offered a frequently overlooked fact - the Fed has a great business model, as open market operations consistently generate a surplus of $80-90 billion a year!


To answer the final question on the Fed's impact, Williams provided financial market data on two episodes. The first was the June 19th , 2013 FOMC announcement that it would begin to think about "tapering" back its "Quantitative Easing," which was a surprise to the financial markets. The second was the Fed's September 18th, 2013 FOMC announcement that it would make no change to policy, when the financial markets expected some tapering. Williams presented graphs showing the movement of the S&P 500, 10 year Treasury rate, and dollar exchange rate at the times of those announcements. The graphs gave a vivid illustration that the Fed can make those variables move!


In the Q&A, Williams was asked how other central banks respond to our monetary policy. He noted that other central banks are most concerned with their policy goals, which can differ from the Fed's, and he noted that Fed was driven by domestic concerns. Although there are differences in central bank goals, policy makers frequently end up on the same page.


He was also asked how to avoid future financial crises. He noted that monetary policy is a blunt instrument and cannot be used to forestall a financial market crisis or pop a financial bubble. He also noted that the Great Recession was not a result of the housing bubble as much as it was the result of financial securities based on the housing market, and thus ultimately savaged when the housing bubble burst.  He opined that we will never eliminate asset bubbles, but that stronger regulation and proactive regulatory moves can temper the excess.


When asked about how events in the Ukraine might impact the economy, he noted that at the moment the impact is mostly geo-political, not economic.  However, he did note the possibility of a small country like the Ukraine having a contagion effect on the global economy.


As for his short term economic forecast, he expects the economy to continue to grow at 2.5 to 3% and for the unemployment rate to fall to 5.5% by the end of 2015.


Since he has worked closely with Fed Chairwoman Janet Yellen, he was asked what it was like to work with her.   He responded that she has the respect of everyone at the Fed, and while she herself has strong views on monetary policy, she likes to hear what others have to say and likes a good give and take over policy.


When asked what keeps him awake at night, he returned to the topic of price bubbles, saying he was most concerned about finding a way to identify them and respond appropriately.  He feels the Fed responded very effectively to the Great Recession once it got started, but could have done more to think ahead about the housing bubble that led to the downturn.


Williams also proved to have a good sense of humor and to be a good sport. He is still recovering from the Seahawks victory over the San Francisco 49ers in the NFL playoffs. "Just throw it four inches higher!" he exclaimed, in reference to the Seahawks end zone interception. Since both cities are in his district, he can pretend that either as Super Bowl Champion works for him - but not really. Why else would he let the audience know that it was his understanding that the Mariner's season would be over by May! :}


It was an honor and pleasure to have John Williams visit campus on March 5th. It was a rare opportunity for students to hear from someone intimately involved in crafting financial and monetary policy for the US.