2018

Stories related to "Conversations."

conversations

Why Is Productivity Stuck in Neutral?

When we talk about the global economy, we tend to turn to automotive metaphors. A recession brings things to a “screeching halt.” Boom times are said to be “in overdrive,” to have “found a higher gear.” And since the recession, one of the major components of the economy has been stuck in neutral. According to the Conference Board, productivity has barely budged since 2007, was flat in 2014 and 2015, and fell last year. We asked professor Chad Syverson, alumnus Matt Tracey, and Executive MBA student Crystal Lam to tell us why it’s stuck and what might kick it into gear. Chad Syverson, J. Baum Harris Professor of Economics, is the author of “Challenges to Mismeasurement Explanations for the US Productivity Slowdown,” published in the spring 2017 issue of the Journal of Economic Perspectives: Is productivity stuck in neutral? The short answer is yes. It’s been slow for the last decade—truly slow, not mismeasuredly slow or illusorily slow. The mismeasurement hypothesis says that although productivity has been slow since the mid-2000s, that isn’t real. The hypothesis argues that what’s actually going on is that our ability to measure economic growth has gotten worse. New things that people like and use a lot—Google, Facebook, Snapchat—are all free. We calculate GDP by adding up what people spend money on. Those things don’t show up because they’re free, so it looks like output per worker hour isn’t going up much. In my recent paper I asked, if that’s true, what else would it be true of? The patterns I found were consistent with an actual productivity slowdown rather than with mismeasurement.

conversations

How Do You Manage Millennials?

For the rising ranks of millennials in business, 2015 was a watershed year: they surpassed Gen Xers to become the largest generation present in the US labor force. Yet another milestone is on the horizon—Pew Research predicts the 73 million–strong cohort, born between 1981 and 1996, will overtake baby boomers as the country’s largest living adult generation sometime next year. Though millennials are no more or less a monolith than the generations that came before them, many managers have observed that members of this generation are bringing a markedly different set of values to the office than their predecessors. Millennials may be derided as tech-obsessed, approval-seeking job-hoppers, or praised as creative, adaptable idealists, hungry for personal growth. But one thing’s clear: they’re prompting executives across industries to reevaluate the traditional approach to management. We asked three Booth experts what the future holds. William Osborne, ’01 (XP-70), is senior vice president for global manufacturing and quality at Navistar Inc., a Fortune 500 company based in the Chicago area: Millennial employees take a fundamentally different approach to their professional lives, but they’re not the caricatures people make them out to be. They have a different value system regarding the role of work in their lives—work is one component, and not the centerpiece. They value experiences more than what I would call traditional rewards. For example, I just had an employee, an engineer, recently quit the company and move into a completely different position, in purchasing, with another company. It was a fundamental change, and the main reason he gave was that he lived downtown and the new company was downtown. For him, work was a means to support his lifestyle. <br/>This is not necessarily a bad thing. They’re more creative and more innovative—they look at things differently, and that’s what’s driving change. But they’re less willing to compromise personal growth and development for the sake of the corporation. <br/>

conversations

Improving Your Outlook

Randy Bellows, ’88 (XP-57), has been attending Economic Outlook for a decade. Established in 1954 as Business Forecast, Chicago Booth’s annual event provides a forum for professors to evaluate emerging trends and share key insights about where our economy is headed. Having retired after a long career as an ophthalmologist, Bellows is an avid investor, and he considers the event one of his most important resources for information—which was his motivation to attend both the Chicago and New York events last January. “Booth faculty are a step ahead of the ordinary media,” said Bellows. “These people are leaders whom I respect, and when I have the privilege of sitting in front of them and hearing what they have to say, it’s valuable enough that I sit there, take notes, and look at those notes all year long.” At the two sessions, with over 1,300 total attendees, leading Booth economists discussed critical issues facing the global economy. They shared their insights into the outlook for Wall Street and Main Street 10 years after the financial crisis, and discussed whether we might be headed toward another. The events were covered by a number of media outlets, including CNBC, Financial Advisor, and the Chicago Tribune. During the event in New York, John Authers, senior investment commentator for the Financial Times, moderated a discussion between Randall S. Kroszner, Norman R. Bobins Professor of Economics; and Erik Hurst, V. Duane Rath Professor of Economics and John E. Jeuck Faculty Fellow. Both economists said they anticipate strong growth this year, and neither believe there to be a threat of inflation or recession on the immediate horizon.<br/>

conversations

Reaching a New Breed of Consumer

The Approach: Since 2016, professors Pradeep K. Chintagunta and Lil Mohan have been cohelming Digital Marketing for Executives, a three-day Executive Education course offered at Gleacher Center in downtown Chicago. Like other open-enrollment courses at Booth, it offers a chance for executives to take a step back from their day-to-day responsibilities in order to sharpen their skills and keep up with the evolving business landscape.<br/>About three-fourths of those who sign up come from traditional verticals. It’s the remaining fourth, though, that help keep it eclectic. “I had a participant who worked for a large cosmetics company and another who was the CEO of a money-transfer business between here and Mexico,” Chintagunta recalled. For many, the course is their first Booth experience, and they find themselves learning alongside peers with diverse experiences—between two and three each session are over 60 years old, Chintagunta said. Mohan, a renowned entrepreneur, teaches the framework and brings the applied perspective, while Chintagunta delves into the analytical topics. The Preparation: Participants are asked to read a few thought-starter articles beforehand, including Think with Google’s “How Mobile Has Changed How People Get Things Done: New Consumer Behaviour Data” and Harvard Business Review’s “Competing on Customer Journeys.” They also complete a short questionnaire so that Chintagunta and Mohan know what role the participants play in their organization and what they hope to get out of the course. The Curriculum and Case Studies: In the first hour, the executives are assigned a team project to devise a holistic digital marketing strategy that they must complete and present to Chintagunta and Mohan on the final day. “I tell them not to pick a strategy for the whole, giant company,” Mohan said. “Instead, pick a division of the company and put yourself in the position where you can actually make a decision and make it happen within a 60-day window.” Teams generally meet up after hours to design and fine-tune their strategies, as classroom time is devoted to several modules on what’s new and what’s next in the field. Mohan takes the lead on lessons, especially those relating to models and frameworks, content marketing, search marketing, mobile marketing, social-media, and omni-channel marketing. <br/>

perspectives

This is Working for Me: Sandra Stark, ’95

Fifteen years ago, Sandra Stark, ’95, went west to Seattle to Starbucks Coffee Company, where she worked with three others in new ventures, a group that behaved like a VC firm: buying Tazo Tea, introducing the Starbucks Card, and looking for other growth opportunities. She wasn’t managing a huge slice of the company’s total $22.4 billion business, as she does these days as a senior vice president managing the global product organization, but it gave her a first glimpse of the fast-growing company’s equitable culture. It’s this culture, she says, that informs “what we do and how we treat people—farmers, suppliers, partners in stores, customers—along the way. It permeates everything we do, it sets the tone, and it helps answer many, many questions. It’s our true north and it’s why I’ve been here 15 years.” A native of Waukesha, Wisconsin, and mother of three tweens, Stark recharges with her kids: skiing and playing tennis and basketball. “I have everything I could wish for in my life. Every single day I think, ‘I am so lucky to have this job.’” Coffee is the heart and soul of our business. Product is my responsibility: beverages, food, merchandise. It starts with coffee and expands from there. What’s the strategy? What’s the right portfolio? What’s the innovation? How are we staying ahead? Currently new to the mix are our Blonde Espresso, made with lightly roasted beans; nitrogen-infused cold brew, which is less acidic and richer tasting; and Teavana Tea Infusions. With merchandise, we’re thinking, what do our customers need to create the right coffee experience at home?

conversations

How Can Humans Work With Artificial Intelligence?

Humans’ fear of robots taking over jobs (or, perhaps, the world) dates back many decades. But there are lots of ways in which AI is already being integrated into the workplace, and the trend will only continue. Yes, AI may take the place of some jobs, but it will also create new jobs—and free up humans to engage in more creative and, well, human tasks. Justin Adams, ’10, is CEO of Digitize.AI in Charlotte, North Carolina: "Most people are familiar with the fact that AI is being used in manufacturing—think robots on an assembly line. But much of AI’s role is service based these days—in health care, for example, which is what my company does. Right now, AI is being used for more of the rote functions, the repeatable and predictable. Humans don’t innately want to do repetitive, rote work, and I think AI will help free people up to do more creative work. My view of AI in the workplace is very positive: I wouldn’t have started an AI company if I didn’t believe that! For instance, my company developed an AI system that can do 50–70 percent of the work hospitals have to do to get preapproval from insurance companies for medical procedures. Currently people are still sending faxes, if you can believe that, or manually entering data online. Because humans are prone to error, and treatment can be delayed because of lack of prior approval, there’s a real patient impact here. Our software can handle approval in the majority of cases, leaving only the more complicated cases that require creativity or negotiations with the insurance company. Humans still have to handle these.

conversations

Risk and Reward

After a career progression that took her around the globe, Julie A. McLaughlin, ’13 (XP-82), took a leap of faith when she returned stateside to start a job search that ultimately led her to cofounding Vertex Energía, based in Weymouth, Massachusetts. At the 2015 Booth Women Connect Conference, McLaughlin spoke on a panel about encouraging women to take career risks, along with Alyssa Pei, ’02, who had just made her own international move to Toronto as a partner at consulting firm A. T. Kearney, based in Chicago. Here, McLaughlin and Pei continue their conversation and share what they have learned about risk from their own journeys. McLaughlin: A big risk I took was deciding to leave E.ON in 2013 when I finished my executive MBA. My role was centralized back to headquarters in Düsseldorf, Germany, and changed from what I’m the most passionate about, which is negotiating renewable deals on the ground. I had a very difficult time finding an opportunity in the United States. Nobody would take me seriously as a candidate from Europe, so I moved back without a job and then started searching. Pei: Did people take you more seriously once you had a US address? McLaughlin: They did. People asked me how I knew I could do deals in New Jersey, for example, which seemed comical in comparison to many of the difficult countries I had operated in. Well, it stands to reason that if I can figure out how to do it in Indonesia, I can figure it out in New Jersey. However, being able to network locally and easily interview in person made the difference. Pei: I think it’s an interesting reflection of what they saw to be risk, though.

conversations

To Your Health

The Challenge: In the early 2000s, a 50 percent failure rate for mental-health-drug trials meant the Food and Drug Administration approved few new treatments for psychiatric diseases, says Amy Fershko Ellis, ’80, who cofounded MedAvante in 2002 to analyze how the pharmaceutical industry tested psychiatric drugs. Her team found the root cause of trial failure was measurement variability and investigator bias in subjective assessments of trial participants. MedAvante created a holistic methodology to improve testing, but the company encountered industry resistance as outsiders looking to change the way clinical trials had long been conducted. The Strategy: Ellis applied universal principles to product development. Because drug trials are conducted in various parts of the country and around the world, companies pay investigators to find, evaluate, and enroll patients. But differences between investigators result in unreliable outcomes. MedAvante, however, proposed a way to control and centralize the evaluation process, using the internet to connect remote clinicians to patients to ask the same questions in the same way and characterize patient responses identically. MedAvante also digitized the process and made it cloud based, so researchers would have instant results. To build credibility, MedAvante enlisted key medical and scientific leaders who believed in their strategy and concept—mostly academics who didn’t have an economic bias. In 2005, MedAvante’s first two trials involved drugs that had previously failed. The new methodology showed significant results demonstrating the drugs worked, and the treatments were approved. Even with those results, industry skepticism of MedAvante’s nontraditional approach meant slow methodology adoption. But by 2009 the psychiatry industry embraced the system, and MedAvante dropped the 50 percent trial failure rate to the low teens. In 2014, MedAvante expanded the platform for use in all medical drug trials, using new technology to enhance data quality for drug developers. New services were quickly adopted beyond psychiatry, especially in studies of Alzheimer’s disease, where the company now holds a leadership position. “We benefited from the halo we had from our success,” Ellis said. The Takeaway: A great strategy can work in all sectors, even if implemented by industry outsiders. If the strategy and results are sound, don’t be discouraged by naysayers.