Tag: Full-time MBA



Students in the global operations course in Shanghai over spring break 2019 evaluating fashion retailers on Nanjing Road.

In the corner of a fluorescent room humming with sewing machines and dappled in shocks of orange, yellow, black and green fabric, Hyrum Palmer spoke to the operations manager of a Shanghai company that connects the New Zealand native’s favorite rugby teams to the process of supplying sportswear to the world.

Meanwhile, 6,100 miles and seven time zones away, Jose Reynoso strolled among columns of oak barrels and regiments of knotted grapevines on a cool Barcelona afternoon to learn about the billion-dollar wine industry and work on strategies to better connect producers and consumers.

Palmer and Reynoso, both MBA ’19, were among more than 100 first- and second-year students dispatched for a week abroad, spending spring break immersed in new classes focused on global business and participating in a test run for a bigger global experience designed for the next class of Olin MBA students.

“It’s bizarre to be a New Zealander—studying a business education in St. Louis in the middle of the United States—to come to China as part of this program and to be in a factory that is all about New Zealand and our culture,” Palmer said. “It’s a surreal and tremendous opportunity.”

Palmer’s group of 35 students in Shanghai toured Mudoo Fashion Co., a sportswear manufacturer founded in 2004 by WashU alumna Judy Yu, EMBA ’16, who earned her degree in Olin’s program with Fudan University in Shanghai. And Palmer—a devout fan of rugby—wasn’t too shy to geek out over the brands Yu’s company supplies, including Pacha, Armani, Ezibuy and Canterbury of New Zealand, which sponsors the country’s national rugby team, the All Blacks.

While his group focused on global business operations in a class by Fuqiang Zhang, tracking the connections from production, distribution, marketing and retailing in the fashion industry, Daniel Elfenbein taught another Shanghai group of 35 MBA students focused on global business models. Their goal: understand the baked-goods market in the context of global demand and develop a recommendation for St. Louis-based Strange Donuts about how the company should enter China.

A continent away, another 35 students in Barcelona took Sam Chun’s class in general management practice, immersing themselves in the wine industry. Half the students focused on strategies to help luxury brands differentiate themselves in an international market while the rest focused on a distribution strategy for a wine brand anchored in a unique philosophy of “biodynamics.” As part of their week, the students visited the Gramona and Pere Ventura wineries and took coursework at Olin partner ESADE Business School.

Olin MBA students learn the process of biodynamic farming at Gramona winery in Barcelona during their March 9-16, 2019, global business immersion trip.

“Wine is a pleasure, but it’s also a business with a retail value above 200 billion euros,” Xavier Ybargüengoitia, former CEO of Moet Hennessey, told the students—one of many experts the students encountered during their week in Barcelona.

“The insights we received helped us look at the problems our wineries were facing with different perspectives, focusing on key ways they could leverage their competitive advantage to differentiate themselves from others,” Reynoso said.

All 100-plus students left St. Louis for their respective destinations on March 9, 2019. The Shanghai students arrived late the next evening, thanks to a late departure, a 15-hour flight from Dallas and a 13-hour time difference. After an evening departure, the Barcelona students arrived in time for a breakfast March 10 provided by ESADE and the hotel. Shanghai students returned March 16, while east coast storms delayed the Barcelona students’ return until the following day.

The dense, content-packed spring break immersion trip also served as a pilot run for the coming summer immersion semester aimed at incoming MBA students in the class of 2021. After spending two weeks in orientation and coursework in St. Louis, the entire MBA cohort will head for a round-the-world immersion into global business with a week at Washington, DC’s Brooking Institution, two weeks in Barcelona and 17 days in Shanghai.

“The pilot was extremely successful,” said Steve Malter, senior associate dean of undergraduate and graduate programs. “The student experience and global business education was impactful and it is clear Olin has an incredible new signature program for our MBA students.”

Students on the spring break trip seemed to agree that the experience, while intense, would be an amazing opportunity, showcasing WashU Olin’s strengths.

“It speaks volumes to the quality of the education at WashU and the opportunity it affords,” said Palmer while still in Shanghai. “But also to the quality of the connections and the network of Washington University.”




Cash Nickerson

The 2018 Olin Business magazine shared a series of vignettes featuring alumni faced with a business decision requiring them to weigh data with their values. We featured these stories to support Olin’s strategic pillar focused on equipping leaders to confront challenge and create change, for good. This is one of those vignettes.

Data and values are important in making big decisions, but as Cash Nickerson, JD ’85, MBA ’93, points out, “there are really very few momentous decisions.

“We make hundreds of decisions in a day,” said Nickerson, an author and president/principal at PDS Tech Inc., one of the largest engineering and IT staffing firms in the United States. “Many are trivial. But many of the trivial decisions come back to you in one form or another.”

Nickerson thinks in terms of a “structure of thought,” a muscle he’s developed so those everyday decisions are still based on data and values. “What fascinates me more than how someone makes the big decisions is the algorithm an executive uses for making the everyday decisions,” he said.

For him, that algorithm focuses on people.

“I like to think of myself as very numbers driven as well as values driven,” Nickerson said.

“My philosophy is that I wake up every morning and remind myself of the uniqueness of humans. To me, it’s a value to treat each person as an individual.”




Jennifer Labit

Jennifer Labit had many forces working against her—an unfinished high school diploma, the tech crash of 2000 and a new baby on the way—but she had a vision and was determined to see it through.

For this week’s Defining Moments series, an MBA and undergraduate class taught by Stuart Bunderson, Jennifer Labit shared how her company, Cotton Babies, was born.

As she explained, “I started a company by accident.” Labit’s company, Cotton Babies, grew out of all of the things working against her. A self-taught coder found herself as one of the only women in a company full of men. This job didn’t last long, as it was washed away with the 2000 tech crash.

Around the same time, she moved back to St. Louis. As she was just figuring out how to make ends meet with her husband working at minimum wage, Labit got pregnant with her first child.

She asked the class, “How much do you think a box of diapers costs?” The class filled with undergraduate and MBA students, many of whom didn’t have children, guessed around $10. When Labit responded that a box of diapers cost $25, the class immediately got behind her vision of reusable diapers.

The idea was born through struggle: Labit and her husband only had $30 after paying the bills for both groceries and diapers. They had to start using cloth diapers because they had to eat. Even still, Labit found a solution to her problem at home, but didn’t see a possibility for a business.

It wasn’t until she’d walk down the street carrying her baby in a homemade sling, having mothers stop her constantly asking where they could buy it, that she knew she had something.

Labit had $100 in her bank account and sold the sling to friends for just $5 above wholesale. She would strategically put a business card in each sling and tell her friends that if people asked about the sling to have them call her. Her phone began ringing off the hook. Every dollar of earnings she put back into her bank account.

Cotton Babies grew so quickly that Labit was forced to move into a retail space for insurance purposes and before she knew it, the company had 600 individual retail accounts.

“I’m an inventor; that’s what I’m good at,” Labit explained. “I’m an idea person.” Labit’s creativity and passion for her company truly radiated through the room as she lectured.

Labit explained that offering a diaper solution to parents struggling economically has a much broader impact than you’d imagine: “I equate a diaper solution to adding a well to a village doesn’t have clean water. It’s just as important but we never talk about it.”

Having too few diapers leads parents down a slippery slope. It leads to using a diaper for too long, which can lead to diaper rash, which then causes increased stress in the home because the baby cries often. Labit shared that not having enough money for diapers creates this cycle of embarrassment and guilt for the parents. Even more extreme: it’s linked to an increased likelihood of childhood abuse.

It’s not only Labit’s passion that landed her a successful business, but also her grit. Labit got emotional as she shared that a Chinese manufacturer knocked off her diapers and sold them on Amazon. The counterfeit product remained on Amazon as Labit begged them continuously to take it down.

She realized direct communication wasn’t going to work while Amazon turned the other way. She needed their attention, so she turned to the power of the Internet. Labit wrote a powerful blog pouring her emotions into words. Amazon responded immediately. The support she received only confirmed the power of having an incredible reputation with high quality products.

Feeling strength within herself, Labit turned the tables to take on China. She recognized their main advantage was their reasonable prices so she went to the drawing board to create high quality products at a competitively low price. Her line Elemental Joy was born, which will be sold at Walmart in just a few weeks. “And that’s how you disrupt China,” Labit triumphantly concludes.




This story includes material contained in a news release issued by the American Accounting Association. Researcher Philip Berger received financial support for this research from Chicago’s Booth School of Business.

A common assumption is that stock analysts gather earnings and other pertinent information to communicate to current and potential stockholders, and then incorporate that information by revising their current-quarter earnings forecasts.

So much for that perception. A new study involving two WashU Olin faculty members finds that analysts disseminate earnings news by revising share-price targets or stating they expect firms to beat earnings estimates, often tempering such information—even suppressing positive news—to facilitate beatable projections.

The study discovered that, when it comes to the current-quarter earnings reports that are analysts’ most closely followed work product, analysts become selective about which forecasts they update and what information they convey. The researchers found that later forecasts issued by the same analyst—such as share-price target revisions, forecast revisions to the other quarters’ forecasts or textual statements about earnings after the last quarterly forecast—surprisingly predict errors in the analyst’s own current-quarter forecast. These associations are much stronger for good news, consistent with analysts catering to managers’ desires to meet or beat earnings forecasts.

Kaplan

Their paper—coauthored by Zachary Kaplan and Chad Ham, both assistant professors of accounting at Olin, along with Philip Berger of the University of Chicago—is scheduled for the March issue of The Accounting Review.

Using data from 8,860 analysts covering 7,933 unique companies over 71 quarters, the researchers reported the likelihood of a downward revision of current earnings estimates came at a 50-percent greater possibility than an upward revision: 19.5 percent downward vs.13 percent upward. When it came to revising stock-price targets and future-earnings estimates, however, the reverse was true to a 20-percent greater possibility: 11.2 percent upward vs. 9.3 percent downward. The firms most likely to meet or beat earnings were those with positive price-target revisions, suggesting those revisions were at least partially motivated by prior omitted earnings information.

Ham

There are two important takeaways from these findings, Kaplan and Ham said.

First, one of the reasons managers are so successful in meeting or beating earnings forecasts is that they persuade analysts to omit positive news from forecasts.

“Managers care a lot about beating earnings forecasts, and analysts rely a lot on managers, so upsetting them is not really an option,” Kaplan said. “Additionally, analysts care deeply about conveying information to their clients, so they cannot merely issue beatable forecasts. The way we find analysts deal with this dilemma is by conveying positive news through the text of their reports and share-price target revisions—this allows managers to meet or beat estimates while also allowing the analyst to update clients about positive news.

“Non-clients, who rely on earnings forecasts because they do not have access to the whole of an analysts’ work product, end up with skewed information, but this is not an issue for the analysts’ business,” Kaplan said.

The researchers said that analysts purposefully lower, or “walk down,” projections. By keeping earnings forecasts low and neglecting some positive developments, the researchers wrote, analysts “cater to managers’ preferences for a walked-down (earnings) forecast pattern. The pattern we document, however, includes avoidance of walking up rather than only a walk-down. … Non-earnings forecast signals are more prevalent for positive news than negative news, consistent with analysts responding to incentives to issue [earnings] forecasts managers will meet or beat.”

Second, by not disseminating all information through current quarter’s earnings forecasts, which are widely available through commercial databases, analysts provide an advantage to clients who have paid for access to the full breadth of their research product.

“Analysts convey information in ways that enable them to be of service to clients, who they care about, and, at the same time, to avoid displeasing corporate managers, who they also care about,” Ham said.

The study may offer a lesson to the broader public: Perhaps widely circulated earnings forecasts aren’t as informative as people think.  If you want the best information an analyst has to offer, you have to pay for it.

In a separate survey of brokerages’ reports to clients, the researchers learned that — without changing forecasts — analysts didn’t refrain from explicitly predicting firms would beat or miss their targets … and the “beat” or positive predictions outnumbered the “miss” or negative predictions by roughly 30 percent.

Image above courtesy of Shutterstock.




Almost exactly five years ago, some of the most spectacular facilities of the Olin campus opened for their first day of classes: students, faculty, staff and WashU leaders gathered in Frick Forum for free coffee and doughnuts and to celebrate the debut of Bauer Hall and Knight Hall.

In fact, exactly five years ago tomorrow, my predecessor, Dean Mahendra Gupta, drafted a blog post announcing the opening ceremony—noting that the new buildings would double WashU Olin’s footprint on the Danforth campus—and heralding a dramatic renovation to Simon Hall, which had opened as Olin’s headquarters under Dean Bob Virgil’s leadership.

On that St. Patrick’s Day in 2014, under a crisp blue sky that shone down through the atrium, WashU officials made their remarks before a banner announcing “Four Buildings, One Olin,” a sign of pride and, perhaps—in its explicit mention of Olin’s split campus—an acknowledgement of the challenge ahead.

That challenge was this: maintaining a sense of unity and esprit de corps among the faculty and staff of our extraordinary business school. With Olin employees spread among Knight Center and Knight, Bauer and Simon halls, a special commitment is required to foster collaboration among faculty, teamwork among staff members and a sense of camaraderie among everyone who passes through our hallways, our common spaces and our classrooms.

I wasn’t here for the grand opening, but I’m delighted now by what I see among my colleagues as they have taken on the challenge, with admirable results.

This academic year, for example, Hillary Anger Elfenbein has kicked off a series of “across the field” luncheons for full-time faculty. The idea was to convene on either side of Mudd Field one Friday a month. So far, the faculty has met for three such gatherings.

“The idea is for faculty to interact on an informal basis—particularly those who work in separate buildings,” Hillary said. “Ever since we moved to separate buildings, it’s been harder to have informal interchange. This initiative is meant to address that. The faculty appreciate it greatly.”

Since my arrival at Olin, I’ve also had the pleasure to meet and engage with many of the faculty and staff at a series of events the Olin Staff and Faculty Advisory Committee has arranged. Though I could only participate in the recent doughnut party through Twitter, I have enjoyed mixers in the courtyard, an ice cream social and our holiday ornament exchange in December—an extremely exuberant (and surprisingly competitive!) event indeed.

I am equally gratified by the work Sandy Vaughn has put forth in organizing a series of lunch-and-learn events that have bounced back and forth between Simon and Bauer halls.

So far, staff and faculty have had the chance to attend four such events, two of which relied on the expertise of our faculty: most recently, Hillary Elfenbein focused on negotiating and, before that, Sergio Chayet hosted a lunch-and-learn on project management.

Earlier sessions drew on WashU HR experts sharing resources for career development and wellness initiatives on campus.

Of course, none of this replaces the one-on-one interactions that happen every day, or the team-oriented projects that advance our school’s work for students, alumni, and the community at large, or the work of our faculty that advances our international reputation for path-breaking research and educational excellence. In fact, our “across-the-field” initiatives are a reflection of the fact that we indeed think and act as “one Olin.”

Pictured above: Olin Professor Sergio Chayet, director of the master of science in supply chain management program, hosts a lunch-and-learn for Olin staff and faculty on project management on January 25, 2019.