Dean’s Blog

Colleen Brown

Posted by Joe Phillips on February 18, 2016 at 12:02 PM PST

Colleen Brown, board chair of American Apparel, participated in the Albers Executive Speaker Series on February 16 th .  The theme of her presentation was, "American Apparel--Difficult Choices," as she shared some of the difficulties the troubled firm has faced since she joined the board in 2014.

In addition to chairing the board of American Apparel, Brown serves as a board member of TrueBlue, Inc., a Tacoma-based staffing company, and Delta Dental of Washington, a dental insurance company. She recently bought and now manages, a web monitoring business.  Brown is also the former President and CEO of Fisher Communications, Inc., which she turned around and successfully sold in 2013, capping a career in the broadcasting industry that spanned more than three decades. 

A few highlights of her extensive business and civic boards include the National Association of Broadcasters, serving as Chair of the Washington Roundtable, Chair of United Way of King County, and board member of the Pacific Science Center.  Brown also has been elected twice to the board of the National Association of Broadcasters. She has served on the boards of the National Association of Television Program Executives and the Television Bureau for Advertising.

Brown started her presentation with a slide showing American Apparel protesters waving placards with her picture on it.  The point was to illustrate the stress that AA had been under due to financial mismanagement that had left the firm teetering on bankruptcy, while clouded by misconduct allegations against the founder.  Within a few months of having joined the board, Brown was swept up in the firing of the CEO and the installation of a new management team.

As Brown explained, she had found herself in another business turnaround project, only this time it was not Fisher, it was AA.  It was her success at Fisher, of course, that opened the way for her to be asked to join the AA board.  When she joined Fisher, it was a respected company losing money.  Brown returned it to profitability and was able to sell the company at a share price more than five times what it was when she took over.

Brown told the audience that her resilience and leadership can be traced back to her youth.  She was one of ten children, but her mother died when the family was young and her father was frequently travelling for work and battling mental illness, so the kids were very much on their own.  Brown was the oldest girl in the family, so much of the work needed to get by fell to her.  Today, she is not sure how they all made it, but she traces her self-reliance and "can do" attitude back to her early years.

Brown provided three points of advice to the students in the audience:

  1. "Remember that laughter is the best medicine."  Don't take yourself too seriously and when things get difficult, finding the humor in things will help you get through it.
  2. "There are no realists in fox holes." Substituting "realists" for "atheists" in this old adage, her point is you have to have faith you can succeed, even if it looks like a long shot.
  3. "Live beyond yourself.  Know there is a greater good than you."  We need to be in a mode of giving back to others, or "being men and women for others" as we say on a Jesuit campus!

Brown closed her presentation with an AA video entitled, "86 Hands," which she said was being shown outside of AA for the first time.  The video illustrated that it takes 86 hands to make a pair of AA jeans, highlighting the vertical integration of AA and its "Made in the USA" commitment.

In the Q&A, Brown revealed that her driving commitment at AA was to preserve jobs for employees and turn it into a good place to work.  That is what kept her going through all the stress.  When asked if she had changed as a leader during the AA experience, she noted that she was used to a business being well organized with processes and infrastructure in place, only to find that AA was not well organized and "chaotic."  She had to learn to loosen up and "let go" and not try to fix everything at once.  Finally, she noted that one of the things that gives her the most joy is mentoring others to be successful in their careers, and was proud to look back at all the people she had supported in the past and what they have gone on to accomplish.  She even gave a shout out to one of her former Albers mentees who was in the audience.  That alum is now paying it back by mentoring our students in the Albers Mentor Program!

After more than three decades in the broadcast industry, Colleen Brown agreed to apply her leadership skills to the challenge of American Apparel.  Never a dull moment since then, and a great opportunity for our students to hear her tell that story about difficult choices!

Dan Price

Posted by Joe Phillips on January 22, 2016 at 12:01 PM PST

Dan Price, co-founder and CEO of Gravity Payments, participated in the Albers Executive Speaker Series on January 21st. Price has been in the news quite a bit for establishing a salary floor of $70,000 at Gravity and lowering his own salary to that level.  He's made many national appearances on that topic, so we are fortunate to have him in our own back yard and available to speak.  Of course, when we confirmed his visit back in February of 2015, we did not know he would have so much notoriety! 

Despite the rain and resulting traffic, there was a strong turnout of nearly 350, which shows there is high interest in Dan Price and Gravity Payments.  The turnout was a pleasant surprise, and I wonder if it is connected to widening concern about income and wealth inequality in our society.  If so, Price may find himself getting pulled into the 2016 elections in ways he is not anticipating.

Price was born in Michigan and grew up in Idaho.  He founded Gravity Payments in 2004 while he was a student at Seattle Pacific University, in response to seeing many small business owners being overcharged by credit card processors.  Today, a decade later, Gravity processes over $13 billion in credit card payments for over 13,000 businesses as it continues to disrupt the industry. 

Along the way, Dan has received many awards for being a successful young entrepreneur --Entrepreneur Magazine  Entrepreneur of 2014, Seattle Business Magazine  2014 CEO of the Year,GeekWire 2013 Young Entrepreneur of the Year, and Small Business Administration 2010 Young Entrepreneur of the Year.

Recent publicity for Price has not all been favorable.  He is being sued by his brother and co-founder for mismanagement of Gravity.  There are insinuations of domestic violence against his ex-wife.  We received feedback beforehand that Price should not be in the speaker series and a group of students handed out fliers saying the event should be boycotted because of allegations of domestic abuse.  As most people know, law suits are easy to file and accusations are easy to make.  Unless there is at least some evidence in the public domain to substantiate the claims, we can't be cancelling events on the basis of hearsay.  Rest assured if we had come to the same conclusions as these critics, we would not have hosted the event.

Price titled his presentation, "More than a Business Plan: My Mission to Help the Little Guy or Gal Achieve Their American Dream," a reference to helping small businesses lower credit card expenses and his $70k initiative.  He started his remarks by talking about growing up in rural Idaho as the fourth child in a family of six.  He spoke about his "nerdy" transition from being home schooled to the public schools in seventh grade.  He explained how he formed a successful rock band and in the process met many small business owners who worked hard but did not necessarily have much to show for it, and that one of the challenges for them was the high fees they paid on credit card transactions.

That was the catalyst to create Gravity Payments, of course, and the path of Gravity has by no means been linear.  The company was hitting its stride when the Great Recession hit in 2008.  Price wanted to stay true to his core values and not respond by cutting salaries or eliminating jobs, and rallied his employees to find a way through the recession by increasing productivity.

By 2011 Gravity had bounced back and Price cited 30% profit margins, but he was taken back when an employee complained that he was being taken advantage of even though he was being paid "at market," and claimed that Price was proud to be making so much money and getting away with paying everyone else so little in market wages.  So for two years in a row Gravity made large across the board wage increases and in both cases profitability rose, suggesting the wage hikes led to higher productivity.

Despite the raises, Price was seeing evidence that some workers could not keep up with the cost of living in Seattle. He was concerned that employees were making him rich and at the same time could not afford to pay the rent.  On a hike with a friend one day, he decided to go with the now infamous $70,000 minimum salary policy.

In closing, Price said he wanted to be part of a movement where the purpose of business is not about squeezing out the last dollar of profitability, but that business serves a more noble purpose in terms of solving society's problems and needs.  He urged students to think about what their purpose would be and how they are going to serve society.

In the Q&A, the first question asked was about how the new $70k wage policy seemed to be working.  Price said the short answer is that it is too early to tell, but anecdotally he thinks there is evidence it is reducing employee stress and increasing productivity.

In a subsequent question on its impact on recruiting and retention, he said it had been a mixed bag.  Prior to $70k, they would get 50-250 applications for a position and be able to identify a few exceptional applicants.  Since the change they are getting thousands of applications and it is hard to pick out the gems.  He also mentioned they had been able to attract a "rainmaker" who had been a VP at Yahoo and joined Gravity because she was inspired by the $70k policy.  On the other hand, he admits a few people left the firm because of the policy and he regrets that.  He went on to say this was not a "100% all good" kind of decision.  He had to weigh it in the balance and make a call.  "HR is complicated," he reminded.

When asked to identify mistakes he made as a young entrepreneur, he noted that he used to see things as black and white and could be rigid in his thinking.  He said he has learned there are two sides to every story and the perspectives of others can be valuable.  He gave an example of an employment law suit that he knew he was right about and knew he would prevail in, but it also caused a lot of stress, distracted him from the Gravity business, and was expensive in terms of litigation fees.  Discretion may have been the better part of valor in that episode, he insinuated.

He was asked if he has a routine to keep himself operating effectively, such as methods recommended by author Tim Ferrris in The 4-Hour Workweek . He admitted he was not a big fan of Ferriss, but reading the book had prompted him develop a few successful strategies to deal with unwanted phone calls and email - not strategies that Ferriss recommended, but some that he developed for himself, such as programming his phone to send a gushing request to be taken off the email list by typing the letters S-P-A-M in a reply message.

Price gave expansive answers to the questions, something that seems consistent with his personality.  As a result, time ran out and no doubt our panelists and audience had more questions for him.  But that is ok, since we had students who needed to get back to their evening class! 

It was a great opportunity for our students to hear from a young entrepreneur who has been in the news a lot these days, and that may not be changing any time soon!  

Installation Ceremony 2015

Posted by Joseph Phillips, Jr. on November 25, 2015 at 2:11 PM PST

On November 20th  we celebrated the excellent work of our faculty by installing three of our faculty members into endowed chairs and one into an endowed professorship.  In recognizing these faculty members, we are, by extension, also recognizing the good work of our entire faculty.

We have the good fortune to have five endowed Chairs and five endowed professorships in the Albers School. Endowed chairs and professorships are a particularly important resource for a business school to have.  They are a valuable tool for attracting and retaining outstanding faculty.   If we are to attain our aspirations for academic excellence, we can only do so with a strong portfolio of endowed chairs and professorships.


Dr. Marc Cohen was installed as the fifth Genevieve Albers Professor is Marc Cohen.  Marc joined the faculty in the fall of 2008. He earned a doctorate in Philosophy from the University of Pennsylvania and holds a joint appointment with our philosophy department. His academic work concerns business ethics, social contract theory, moral psychology, and more general questions in social/ political philosophy about what makes society more than an accidental crowd. The journals he has published in include the Journal of Business Ethics , Journal of Trust Research , and the Business Ethics Journal Review .  Prior to joining Albers, Marc worked as vice president and corporate strategist at Branch Banking & Trust Co in North Carolina, as assistant vice president in the Bank's middle market commercial lending group, and as a management consultant at Mercer Management Consulting.   Last year, he was a visiting scholar in the Department of  Management,  National  Sun  Yat Sen University in Taiwan while on sabbatical.  


Dr. Lisa Zhao was installed as the third holder of the Lawrence K. Johnson Endowed Chair of Entrepreneurship.  The Johnson Chair was established by alum Kent Johnson in honor of his father, and Kent was able to join us for the ceremony.


Lisa joined us this year from the University of Missouri - Kansas City, where she directed the Entrepreneurship and Innovation PhD program and taught undergraduate, MBA, PhD, and executive education courses. Before she joined UMKC, she worked at Cornell University and Michigan State University. She was also an entrepreneur and a consultant with startups and Fortune 500 companies.


Lisa conducts research and teaching on new venture product launch strategies, new venture funding and exit strategies, innovation management, market-entry strategies, and statistical methods. She is the author of more than 20 articles in top academic journals such as Strategic Management Journal , Journal of Operations Management , Journal of Management , Entrepreneurship Theory and Practice , Decision Sciences Journal , Journal of Product Innovation Management , and IEEE Transactions on Engineering Management .


Dr. Jeffrey Smith was installed as the fourth holder of the Frank Shrontz Endowed Chair of Professional Ethics.  Shrontz is the former CEO of Boeing and was able to join us for the celebration.


Jeffrey joined us this year from the University of Redlands, where he spent twelve years and served as the founding Director of the Banta Center for Business, Ethics and Society. He currently serves on the Executive Board of the Society for Business Ethics and will assume its Presidency in 2017.


His research interests lie at the intersection of philosophy and business, currently focusing on the philosophical dimensions of corporate responsibility, examining whether recent calls for greater social involvement by corporations can be given a moral foundation, political foundation, or some combination of both. Jeffrey's work has been published in journals such as Business Ethics Quarterly , Ethical Theory and Moral Practice , and the Journal of Business Ethics , and he is the co-author of the forthcoming 8th edition of Ethics and the Conduct of Business .


We also installed Dr. Peter Brous as the third holder of the Dr. Khalil Dibee Endowed Chair in Finance.  Peter also was the first holder of the chair back in 2007 to 2011.  Dibee was a long time member of our finance faculty. 


Peter joined Seattle University in 1992, after four years on the faculty at Pennsylvania State University. He has published articles in the top finance and accounting journals, including the Journal of Finance , Journal of Financial Economics , Journal of Financial and Quantitative Analysis , and the Journal of Accounting Research .   At the same time, Peter has published several pedagogical papers in the Journal of Financial Education . He has taught on-site finance courses at Costco Wholesale Corporation and has served as an expert witness in over 30 cases based on his expertise in valuing employee stock options or business valuation. Additional areas of expertise include corporate performance measures, capital budgeting, corporate financing decisions, and real option analysis.


It was great to be able to recognize these faculty members for their outstanding work!  Please join me in congratulating them!

Jamie Nordstrom

Posted by Joseph Phillips, Jr. on November 13, 2015 at 11:11 AM PST

Jamie Nordstrom, President of Nordstrom Stores, participated in the Albers Executive Speaker Series on November 12 th .  Nordstrom was appointed President of Nordstrom Stores in May, 2014.  Prior to that, he was President of Nordstrom Direct starting in 2005.  A fourth generation family member, Jamie began his career in the stockroom of the Bellevue, Wash. store in 1986.  He  worked  in  sales  in  shoes  through  high  school  and  college, and   went   on   to   hold   numerous   positions   with   the   company   in   store   and   buying management.

Jamie started his remarks by reviewing the history of the company and the work of the three previous generations of Nordstrom's to get it to where it is today.  I take that back - he actually started his remarks by referencing the release of the company's latest earnings report that day, which had triggered a 20% drop in the stock price, so it was clear that being at Seattle University was going to be the best part of his day!

From its very beginnings as a shoe store, Nordstrom has focused on gaining customer loyalty, not around price, but around service.  With that philosophy, it became a very strong brand in the Northwest.  But in 1971, in order to facilitate the transfer of the company from the second to third generation, the family took the company public and that required growth.  Thus began the nationwide expansion of Nordstrom to where today they have 320 locations in the US and Canada.

Despite the results of the last quarter, Nordstrom has to be considered one of the best retailers out there. Jamie provided insights on how they see customers changing and how they are responding.

Not all the Options - in the good old days, the customer went to the store and selected from the available options.  Nowadays, a customer can check his or her phone for a wider selection.  You must get better at providing more options (like locating items from other stores).

Informed Customer - in the good old days, you could tell a customer anything about an item and they would not know the difference.  Nowadays, a customer can check his or her phone and know more than the sales associate, including prices at the competition.

Price Transparency - in the good old days, you would watch the prices of your competitor down the street.  Nowadays, a customer can check his or her phone and find the price anywhere.  All the more reason to compete on service, not price!

Jamie noted that when competing on service, one has to realize that the definition of great customer service is changing over time.  Same day shipping and curbside pickup matter today but were not expected in the past.  He also cautioned that customers are not so much looking for speedy  service, as they are looking to control their time.  He gave a great illustration of how in the good old days, you would call for a cab and wait and wait, wondering when it would arrive.  Now you can use Uber and you can see exactly when the driver should arrive.  Both could take the same amount of time, but you feel better about the wait for Uber.

In the question and answer session, he was asked when Nordstrom would be expanding outside the US and Canada.  His answer was -- not any time too soon.  They first have to get it right in those two markets and Asia and Europe seem to be well served these days.

When asked about preserving the culture of Nordstrom, Jamie said he likes their strategy of combining long time employees who have worked their way up (like him!) with new hires that bring new skills and experience at other organizations.  The culture is to be nice to one another and support one another in taking risks and trying new things.  While being nice internally, they also like to pound the competition and win!  They emphasize that retailing is a "team sport" and you need to be part of the team. 

Interestingly, he mentioned that our previous speaker, Alan Mulally, former President and CEO of Ford Motor Company, came to Nordstrom several years ago and spoke of his "One Ford" strategy.  They realized that Alan was also talking about their culture, so since then they have started a "One Nordstrom" campaign!

When asked about the future of on-line retail, Jamie responded that e-commerce is in its infancy.  He also noted that from 2005 to 2010 they ran the on-line business as a mature business, managing expenses and net income and not spending for growth.  That changed in 2010 and now they are investing heavily in their on-line business, which has become their engine for growth.

A question was posed about which customer the company should be focusing on.  Jamie noted that few customers buy only high end items. Instead, they mix and match items of different price points, so you will often see someone with $30 pants and $400 boots.  It's not about getting all of someone's business.  Instead of price, customers are really looking for something new  (as I write this, I am wearing my new  brown pants from Nordstrom for the first time!), so Nordstrom aims to provide the hottest and latest merchandise.

When asked about his leadership style, Jamie responded that the best leaders support people to be more successful.  They make others believe they genuinely care about them and are invested in their success.

Finally, the question came about the stock price.  Jamie responded that it was a bad quarter, with growth coming in at 1% instead of the 6-7% range they had been seeing, and it is not uncommon for a bad quarter to show up.  The key to responding is to manage inventories through these ups and downs and he said they are very good at that.  He added he felt very good about their ability to handle a bad quarter.

When it rains in Seattle, the turnout for the speaker series always takes a hit, but we had a very large crowd in attendance.  That shows you the power of the Nordstrom brand among our students!  Jamie is just one of four Nordstrom's at the top of the organization.  Would the turnout have been any different if it were Blake, Erik, or Pete?  Probably not, and the message would surely have been the same!  It was an evening of great insights on the retailing industry!

Want to see a great picture?!

Posted by Joseph Phillips, Jr. on November 6, 2015 at 9:11 AM PST

This picture features all the people who have served as chair of our Department of Accounting in its 45+ year history!  What a great picture!  Dave Tinius was the first and longest serving chair of the department.  Bill Weis also served during some of the earlier years.  After the completion of Dave's 18 years, Susan Weihrich followed Dave.  She handed it off to Bruce Koch in 2006, and this year Bruce  passed the baton to Chips Chipalkatti.

One thing for sure is that the department has benefited from outstanding leadership over the years!  Each of these individuals has made significant contributions to the progress and development of our accounting program.  Thank you Dave, Bill, Susan, Bruce, and Chips!

Alan Mulally

Posted by Joseph Phillips, Jr. on October 29, 2015 at 4:10 PM PDT

Alan Mulally, retired President and CEO of the Ford Motor Company, recently spoke to students in the Albers School on the theme of, "Strategic & Operational Leadership and Working Together."  There were nearly 350 in the audience on October 28th.

Mulally's prepared remarks largely followed themes in the book American Icon, by Bruce Hoffman, which chronicles Mulally's work to get Ford back on its feet after the Great Recession. Mulally served as President and CEO of Ford Motor Company from 2006 to 2014.  Through his One Ford plan, he led Ford back to being a leading auto company worldwide and number one in the US market.  He is also widely recognized as the Detroit CEO who did not go to Washington DC to borrow money during the Great Recession.  Judging from the audience reaction to that fact, it is an important aspect of his reputation today as a successful business leader!


Prior to Ford, starting in 1969 Mulally worked at Boeing, where he rose to become Boeing Executive Vice President and President and CEO of Boeing Commercial Airplanes before leaving to take over Ford.  Throughout his career, Mulally has been recognized for his industry leadership, including being named by Fortune Magazine  as #3 among the "World's Greatest Leaders" and one of the "World's Most Influential People" by Time Magazine.  Currently he serves on the boards of Google and Carbon3D.

Mulally addressed some of the difficulties he faced when he joined Ford.  One major problem was that the company had become very regionalized, with divisions around the globe divided by geography, and this prevented the company from creating economies of scale.  A second problem was a culture of hiding problems.  When he introduced his green-yellow-red spreadsheet review system, and the company was poised to lose $17 billion, all the items were coming in "green," meaning everything was on track.  But of course, it could not be.

Over time he worked to reshape the culture and get people to work together.  Later in the Q&A, he noted that leaders set the culture and it is one of the most important things they do.  He shared with the audience the culture he wanted to establish at Boeing and Ford:

The key for him is that the leader must create an environment where everyone is working together.  Not only does the leader need to lead by example, but also must be quick to call out those who are not respecting the principles.  He said that leading is like gardening, taking good care of your people like you would take care of your plants.

One of the most important reflections of the night was successful leaders move from "I to we" and "Me to service."  Those six words are very powerful and so consistent with what our students hear from us!  Leadership is about how you are enabling others!

It is also clear that Mulally's success as a leader is very much tied to the business plan and the business plan review (BPR) process.  The BPR brings everyone together frequently and is an important tool for accountability and transparency.  It also is a mechanism for people to help each other identify and fix problems, and so is an important part of "Working Together."  It lets everyone know what is going on and gives everyone the opportunity to contribute.  In answer to a question about responding to unexpected events and shifts in the environment, Mulally noted the BPR is the perfect tool for responding.  Updates are a routine part of the process.

When asked if he had any suggestions for achieving work-life balance, Mulally said he thinks of a diagram with many overlapping circles that represent family, work, community, faith, etc… that sit inside a larger circle that he labels as "One Life" and "Life's Work."  Those smaller circles overlap and compete and you must figure out what is important to you.  Then look at your calendar.  Are the priorities on your calendar?  If not, start scheduling accordingly!

I told him afterwards that I like that diagram because it aligns with my view that it is not about work-life balance, it is about work-life integration  and how to make what is important to you fit together.

He then told the audience about the "family meetings" they used to have in the Mulally household every Sunday, which were really BPRs.  There were certain rituals built into those meetings, one being that everyone came in with their schedule for the week.  Then they figured out how they were getting to ball games, music lessons, dance class, etc… and he was able to put that into his calendar!  Apparently, the kids complain bitterly about those meetings today, but he says they hold their own family BPRs now!

Alan Mulally is arguably one of the most successful business leaders of our time.  His awareness of the importance of culture and teamwork, combined with his ability to establish a compelling vision and plan and execute around that, while tying that all together, is really very distinctive.  This made for a compelling and inspiring evening for our students!

AACSB Honors Two Albers Alums

Posted by Joseph Phillips, Jr. on October 16, 2015 at 1:10 PM PDT

To celebrate its 100 th  Anniversary, AACSB has identified 100 graduates of business schools worldwide as Influential Leaders.   AACSB is the premier global accrediting body for business schools.  These graduates are being recognized for their innovation, entrepreneurial spirit, business impact, and influence on social change.  The honorees come from schools in 21 nations and span 20 different industries.   The Albers School was fortunate enough to have two alumni selected -- H.E. Mohamed Ali Rashed Alabbar and Gary P. Brinson.  It is a distinct honor to have two or our alums in the group because there are so many deserving business school graduates out their having a positive impact on our world!

Mohamed Alabbar is one of the leading entrepreneurs in the Middle East and has had a major impact on the economics of the region. He graduated from Albers in 1981 with a degree in business administration and returned to Dubai to take a position in the Central Bank of the UAE as manager of banking supervision. He came from a poor family and was the first in the family to earn a college degree.  Later, he was appointed director and general manager of Al Khaleej Investments, a government-owned investment company with significant real estate interests, and through this position he established his presence in the real estate sector.

In 1992, Alabbar established Dubai's Department of Economic Development, which had notable success in opening doors to the private sector, initiating innovative public policies to strengthen the trade and business segments and establishing a culture of transparency and openness. In the process, he established a close relationship with Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai, and he later became one of Sheikh Mohammed's trusted economic advisers.

In 1997, Alabbar helped established Emaar Properties-Dubai's largest real estate group. Emaar's projects include some of Dubai's most notable landmarks, such as the Burj Khalifa, the tallest building in the world, and the Dubai Mall, the world's largest shopping mall. Alabbar also facilitated a partnership with Giorgio Armani and established Emaar Hotels & Resorts LLC in an exclusive deal to launch a collection of luxury hotels in the designer brand's name. He is also known for creating the annual month-long Dubai Shopping Festival. Today, Emaar is not just active in Dubai but has initiatives in 18 countries around the globe.

Alabbar is well known for his pioneering role in positioning Dubai as a world-class city. He has been recognized for his business acumen and his influence in the Arab region in many prominent publications: Arabian Business, fDi Magazine, Fortune, Euromoney Magazine, and Advertising Age. Alabbar has put his status and leadership abilities to good use by serving as a member of the Dubai Executive Council and the Dubai Economic Council, as well as vice chair of the Dubai Aluminum Company (DUBAL).

In addition to his impact on the regional economy, Alabbar has also created several corporate social responsibility initiatives and supports various local organizations, such as the Al Noor Training Centre for Children with Special Needs. Focused on the need to promote affordable and low-cost housing, Emaar Properties undertook the reconstruction of the earthquake-ravaged village of Ngelepen in Indonesia. Alabbar also initiated a social housing project in Egypt, the Beyout residential project for the economically underprivileged. Finally, Alabbar has supported SU by serving on our board of trustees and making generous financial gifts to support university initiatives.

Gary Brinson graduated from the Albers School in 1966 with a degree in finance.  Growing up in Renton, WA, he worked his way through SU working at Oberto Sausage.  After graduation, Brinson earned an MBA from Washington State University. He was set to enter the PhD program at Stanford but was instead encouraged by Yale professor Eli Shapiro to join a portfolio management group at Traveler's Insurance for a year or two. He decided to veer from his academic plan to try his hand at investing.

Through the 1970s, Brinson rose to become CEO of Traveler's Investment Management Company. He became interested in investing globally, which was quite novel at the time, and joined First Chicago Bank to pursue that interest in 1981. By 1989 Brinson and his coworkers bought out their investment group from First Chicago and founded Brinson Partners.

In the mid-1990s Brinson Partners was acquired by Swiss Bank, and subsequently Swiss Bank acquired UBS. Brinson took over as chair of UBS Asset Management and led the group until 2001. According to published reports, Brinson was overseeing the management of approximately $1 trillion, a very large amount at the time.

Brinson has been very active in the CFA Institute (formerly AIMR), the organization that oversees the Chartered Financial Analyst designation. In 1999, Brinson received AIMR's Award for Professional Excellence. Other recipients include John Bogle, Warren Buffet, and John Templeton. Brinson has further distinguished himself as the recipient of the FMA's Outstanding Financial Executive award and the Graham and Dodd Scroll.

When CFA Institute Magazine  ran a cover story in 2003 about living legends in the investment profession, Brinson was one of seven individuals featured in the article (along with Buffet and Templeton).

Although Brinson never made it back to Stanford to pursue a doctoral degree, he has published research that any Stanford professor would be proud of. During his career, Brinson championed several important insights that are seen as conventional wisdom today but at the time were quite revolutionary. Perhaps his most influential work was a 1986 article in the Financial Analysts Journal  explaining that asset allocation is the predominant influence on portfolio return variability.

Today, Brinson works chiefly with the Brinson Foundation, which he founded to support charitable causes that work to encourage personal initiative, advance individual freedoms and liberties, and positively contribute to society in the areas of education and scientific research. As of 2013, the foundation distributed over $41 million via more than 1,200 grants to nonprofit organizations.  Brinson has also supported SU by establishing an endowed chair in finance, the Dr. Khalil Dibee Endowed Chair in Finance, which recognizes a retired faculty member who was influential in Brinson's development as a student.

These are two inspirational roll-models for our students.  Both came from humble backgrounds and were the first to earn a college degree in their families.  Both went on to have major impact on their professions, and both have undertaken major philanthropic activity to support their communities.  We are proud to have them recognized by AACSB as Influential Leaders!


Ben Bernanke Visits Campus

Posted by Joseph Phillips, Jr. on October 16, 2015 at 12:10 PM PDT

Ben Bernanke, former Chair of the Federal Reserve Board of Governors, spoke on the Seattle University campus on October 15 th .  The event was sponsored by Town Hall and was part of Bernanke's tour promoting his new book, The Courage to Act .  He was interviewed by former Washington Governor Gary Locke.  The book is about how Bernanke led the Fed through the Great Recession.

By the way, this is not the first time we have had a monetary policy maker on campus.  Previous visitors include Mark Olsen, when he was on the Federal Reserve Board, and John Williams, current President of the Federal Reserve Bank of San Francisco.

Bernanke comes off as unpretentious, unflappable, and unassuming.  He seems like a guy who would be easy to get along with and is a baseball nut.  Most of what he said in the interview is probably in the book (I have a copy but have not read it yet), but there are probably a few things in the 75 minute interview that are not.



 Locke asked some of the predictable questions.  Why bail out Bear Sterns but not Lehman Brothers?  Answer - Bear Stearns was not a bail out, it was an arranged acquisition and they could get no one to buy Lehman (it was too far gone) and they had no other strategies to deploy.  It was not a case of wanting Lehman to fail to teach the market a lesson.  It was a case of not being able to do anything about it.  Now that we have Dodd-Frank, there are other ways to handle this scenario that will lead to a better outcome.

Why assist Wachovia but not our local institution, Wamu?  Again, not the same situation, and in the case of Wamu, the FDIC and Chair Sheila Baird were focused on minimizing losses to the FDIC trust fund.  That is a different objective then stabilizing the economy.  Bernanke also admitted that JP Morgan got a sweet deal in the Wamu acquisition.

What about AIG - why bail them out?  Aren't they just an insurance company?  At that time, the Fed was concerned about the connections that AIG had with so many other firms.  A collapse of AIG would cause contagion across the system was what the Fed feared.  In this case, the government was able to lend funds to AIG to buy time for it to sort itself out.  The strategy worked and AIG is a going entity and has repaid its borrowings.

Bernanke also explained that the heart of the financial crisis was not sub-prime lending.  There was not enough sub-prime lending to take down the system.  The real problem was how the problems of sub-prime lending triggered investor panic.  Many financial institutions, including banks and investment banks, had become dependent on short term, uninsured borrowings.  Those funds abruptly dried up as lenders panic.  When liquidity disappeared, that threatened the many financial institutions that had grown dependent on that funding.  He claimed the Fed understood the possibility of a collapse of the sub-prime market, but did not see the contagion effect.

The former Fed Chair also argued that too much of the burden of economic recovery was placed on monetary policy, as very little was done on the fiscal policy side.  Congress could not come to an agreement on the appropriate use of fiscal policy tools, as right wing politicians balked at their use.  When the Fed did everything it could to drop interest rates, pushing short term rates essentially to zero, it was still not enough.   Thus Quantitative Easing became necessary, with versions 1, 2, and 3.

When asked why the resulting increase in bank reserves was not causing inflation, Bernanke explained that the banks are not using the reserves to increase the money supply, thus inflation is not rising.  Instead, the Fed is sterilizing the reserves by paying interest to the banks.  In essence, the banks are using the reserves as an earning asset rather than using them to make loans, which would normally result in an increase in the money supply.  This seems to be a little understood point by the media, most elected officials, and the general population.  Certainly any Presidential candidate who talks about imminent inflation is disclosing their ignorance and giving insight on their fitness for office!  If more of these folks would have taken a macroeconomics course, it would be easier for them to understand! :}

Bernanke also noted that the huge increase in the Fed balance sheet resulting from Quantitative Easing is not as scary as it looks.  He suggested the Fed's strategy would be to hold these securities until maturity, at which time they would leave the Fed's balance sheet (and Open Market operations would be used to offset any undesired change in bank reserves).  You want to know when the Fed's balance sheet will shrink - find out the maturity of those QE holdings!

While telling the QE3 story, he explained that as a known baseball nut he was invited to a Washington Nationals practice, and the manager introduced him to star outfielder Jason Wirth.  Initially, Wirth seemed unimpressed, but when the manager emphasized his role as chair of the Fed, Wirth surprisingly responded, "What's with QE3, anyway?"  I'll bet that story is in the book!

In the Q&A with the audience, Bernanke was asked if the repeal of the Glass-Steagall Act contributed to the Great Recession.  He replied that it did not and he did not think there was a need to reinstate a separation of commercial and investment banking.  For one thing, he said, if you look at all the institutions that experienced the greatest problems - Bear Sterns, Lehman Brothers, Wachovia, Wamu, Countrywide, etc… -- none of them were mixing commercial and investment banking.  Only Citibank could be said to have been doing both.  Moreover, some of the new rules in Dodd-Frank discourage the mixing of the two activities.

When asked if he could do it over again, what would be different, he expressed regret at not doing a better job of communicating with the public around why they needed to take certain actions, such as assisting large financial institutions but not assisting struggling Main Street businesses.  They tried, but just did not succeed.

When asked how the Fed should respond to financial bubbles, whether that is housing prices or tech stocks, he implied that the Fed should not be trying to pop bubbles.  Instead, it should forecast the worst possible outcome of the bubble and be prepared to address that situation.  A bubble is not likely to have large system wide effects because the impact will be concentrated on relatively few affluent investors and a particular sector of the economy.  It is a bit different with home prices, because there are so many home owners, but if a drop in home prices does not trigger investor panic, the down swing is likely to be manageable.

When asked what he was most concerned about in our economy, he said he was actually quite optimistic about our economy.  That said, his biggest concern was the growing inequality in income and wealth.  He noted it was long term trend that began in the 1970's and it was not a problem that could be turned on a dime.  It would take a number of years to fix, with improved education and changes to our tax and welfare system being the most obvious tools.

When asked if the large amount of debt held by China was a problem, he responded with a firm no.  That China is willing to hold our debt is a good sign, and they are doing it in order to manage the value of their currency.  He could have added it does not give them any foreign policy leverage over the US, in fact it is probably just the opposite.  Remember the old adage, "When you owe the bank a little, the bank owns you.  When you owe the bank a lot, you own the bank!"

He was also asked if US households were once again accumulating too much debt?  He said he did not and that households and business for the most part were being quite cautious.

Finally, he was asked about attempts to increase Congressional oversight over the Fed, such as the new audit that is being proposed.  He said the Fed already has plenty of audits.  The only thing this legislation wants to do that is new is to review monetary policy decisions, and that is just elected officials inserting themselves into monetary policy.  He noted, if you like the way the Congress has handled fiscal policy, then you should get them involved in monetary policy.  Not an inviting prospect for this audience.

I am a great admirer of Ben Bernanke.  Even with the benefit of hindsight, I think he did a masterful job as Chair of the Fed in navigating the Great Recession.  I don't like that firms like Goldman Sachs did not take a haircut with their AIG holdings, but maybe that was impossible to pull off.  And he continues to have the right take on issues.  Whether it is debt held by China, the repeal of Glass-Steagall, keeping Congress out of monetary policy, financial bubbles, or the growing inequality of income and wealth as our greatest challenge, I think he is on target.  It was great to have him on our campus!


New Eastside Campus is Open!

Posted by Joseph Phillips, Jr. on September 23, 2015 at 11:09 AM PDT

Our new Eastside Campus location is now open!  We have moved from Bellefield Office Park to the Bellevue downtown area, just a few blocks from the Bellevue Transit Center along I-405.  The new space has been completely renovated to meet student needs and to fit the way our faculty members teach these days.  The new address is 200 112th Avenue NE, Bellevue and we had our official opening today.

It is the first day of classes for the Fall, 2015 quarter, and the first class at the new Eastside campus will take place this evening!  We are really looking forward to life in the new facility.

We had a formal ceremony this morning to mark the occasion, with Fr. Sundborg and Provost Crawford offering remarks.  Fr. Sundborg did the formal ribbon cutting, along with our Eastside Coordinator, Susan Early.


We would like to thank SU Facilities for a great design and build out, especially Steve De Bruhl, and Meriwether Partners for getting us a great location and lease, especially David Rothrock!

We are starting the fall quarter with the largest undergraduate class we have ever had, and our graduate enrollment is up notably from a year ago!  Congratulations to our staff and faculty members for the successful work they have been doing to increase enrollment!

Here are pictures from the Eastside campus, including some of the signage in the entry way and the four classrooms at the new facility.





Indian Junket

Posted by Joseph Phillips, Jr. on August 27, 2015 at 2:08 PM PDT

From August 19-24 I did a quick trip to India to visit the Xavier Labor Relations Institute (XLRI) in Jamshedpur, India.  XLRI is a Jesuit university in India that offers only graduate business programs, both at the master's and doctoral levels.  It has a strong reputation in the country, consistently appearing in the Top Five of business school rankings, but is less well known outside of India.  The purpose of the visit was to assist them with their effort to obtain accreditation from the Association to Advance Collegiate Schools of Business (AACSB), an accreditation held by 750 business schools around the world, including the Albers School.

XLRI got its start in the 1940's when Tata Steel asked the Jesuits to provide training to its managers on improved labor relations.  Tata was a company ahead of its time in terms of how it viewed the role of business in society and how workers should be treated as a precious resource.  The early leaders of XLRI were Jesuits from the US, but over time Jesuits who are Indians have gradually taken over the reins.  A few of those early Jesuits, now in their 90's, still live on the XLRI campus and I was able to meet them!

Jamshedpur is literally a Tata company town known for its steel mills.  It is also a town that is hard to get to, as it does not have commercial airline service.  To get there, I had to fly to Delhi and take a flight from Delhi to the city of Ranchi.  Then you take a daunting car ride from Ranchi to Jamshedpur.  Most of the way it is a two lane highway with your driver constantly angling to pass the next car or truck and duck in just in time before oncoming traffic.   The drive is an important part of the Indian experience and hard to fully describe.  It's best to sit in the back seat and stare out at the countryside and not watch the road!

Most of the distance from Ranchi to Jamshedpur shows evidence of building a four lane highway between the two towns, but it is a work in progress and no segment has actually been completed.  The locals say the expanded highway has been under construction for four years and because of corruption progress has been slow.  At the same time, there were a few segments of the journey when we drove on private toll roads.  These roads were well maintained and not very crowded, and show that India is more than capable of taking on its infrastructure problem, but there just does not happen to be a toll road for the drive between Ranchi and Jamshedpur! :}

June 23rd was a Sunday, so I attended the 8:30 AM mass at the campus chapel.  I had been told earlier that almost all the XLRI students and staff are Hindus, so the fact that there were only about 75 in attendance was not surprising.  But about half way through the mass, I realized that the last time I was at a mass in India, Mother Theresa was there!  This happened in 1997 when I was a faculty member at Creighton University and helping to lead a study tour to India.  Back then, there were not a lot of Americans going to Calcutta, but those that did talked about attending the early morning mass at Mother Theresa's mission, and sure enough, when we did, she was there and we were fortunate enough to visit with her afterwards!  Ironically, the priest saying the XLRI mass referenced Mother Theresa's early morning mass attendance, noting that when asked about it, she replied that if she did not check in with the Lord every day then her work would "just be social work."

While it was the monsoon season in India, most of the time the sun was out and they reported it had been a weak monsoon year.  Naturally, it was much more hot and humid in Jamshedpur than in Seattle, but one seems to spend enough time in air conditioned buildings and cars that it does not make much difference.  The only time it rained was on the drive back to Ranchi as my trip was coming to a close, and that was intermittent and caused no problems with the driving.

The flight from Ranchi to Delhi proved to be interesting.  As we approached Delhi, the pilot announced the presence of thunderstorms and we would have to do 15-20 minutes of circling until the storms cleared.  The air was very rough and we did a lot of bouncing around, and after an hour we were still circling, but suddenly we were making an approach and all of the sudden we had landed.  Then the pilot announced that all the other planes that had been circling ran out of fuel and had to be diverted to other locations, and if we had missed our approach, we would have had to do the same.  That would not have been good, because then I would have missed my flight to Frankfurt!

On the flight from Ranchi, I met Sakshi Singh Rawat, the wife of M.S. Dhoni, the iconic cricket player and current India national team captain.  Prior to my trip, I did not know anything about Mr. Dhoni, but while at XLRI they proudly talked about him since he had grown up in Ranchi.  According to the London School of Marketing, he is Number Nine among the world's most marketable sports stars, ahead of Ronaldo and Kobe Bryant, for example.  Despite the global celebrity status, they still choose to live in Ranchi rather than Delhi or Mumbai or any other large city.  (Ranchi is not a big city by India standards, with a population of less than one million).  By the way, although she is a seasoned traveler, Mrs. Dhoni thought our bumpy ride was the worst she had ever experienced!

Once in Delhi, I needed to transfer from the domestic terminal to the international terminal, which is normally a ten minute taxi ride.  Unfortunately, because of the huge storm and resulting flooding, traffic was a disaster, and it took over an hour to make the transfer.  Luckily, there was plenty of cushion built into the schedule and I had no trouble making my 2:30 AM flight to Frankfurt and back to Seattle!