Tag: Research Centers



Three members of a family-owned business looking at the camera. The apparent patriarch is at the front with his arms crossed, while apparent son and daughter are behind him over his shoulder.

Peter Boumgarden, Koch Center’s director and Olin’s Koch Professor of Practice of Family Enterprise, wrote this for the Olin Blog.

Actionable thought leadership and research into the dynamics of the family enterprise. Forums to come together as family enterprise leaders to shape strategy through a mix of data and opportunities to design. Takeaways from events we stage at the Koch Center for Family Business. These are some of the features in store for readers as we introduce our new monthly newsletter, “The Family Enterprise.”

Today, I want to take a moment to share our plans for the newsletter and, I hope, entice you to subscribe to receive regular updates on what we know—and what we are learning—about the family enterprise. Our newsletter will also include insights from the field as we listen to leaders who are living this reality, snapshots of family organizations in the news, and upcoming ways to engage with the Koch Center, virtually or in person.

As a research center based within one of the world’s preeminent universities, we believe accurate insight and actionable frameworks can add significant value for family enterprise leaders. You will see this vision manifest in our upcoming event, “Data+Design: Striking the Balance Between Continuity and Change,” coming October 29. I hope you will consider joining us.

Unlike a traditional symposium, which is often high on inspiration but lower on concrete takeaways, this session will dynamically help you look inward while simultaneously leaving you with research-informed insights to guide your day-to-day strategic decisions. With this event and others to follow, we aim to generate a cascading impact on private and family enterprises within the region and, by extension, the broader national and international economy.

Starting with some sobering research insights

In our debut newsletter, however, I’d like to share my thoughts on how a university can uniquely add value within this space.

Research on Family Firm Professionalism. Source: Family Firms Needs Professional ManagementHarvard Business Review

For those of you who don’t know me, you will quickly learn that I seek to be an academic entrepreneur—one whose primary value lies in bridging the academy and the “real world.” But today, I am going to put my academic hat on and start with the raw data.

One of the better, albeit somewhat depressing pieces of research done on family organizations comes from Nicholas Bloom, Raffaella Sadun and John Van Reenen. Unlike some of the research that addresses performance through self-reporting (“how professional do you think your firm is?”), these authors trained individuals to objectively assess companies across sectors specific to their general professionalism.

Pulling from a sample of 8,000-plus manufacturing firms and just under 700 retailers around the globe, the researchers wanted to know how family-owned and family-led organizations perform compared to the publically traded firm or groups run by private equity, for example.

As they summarize in a Harvard Business Review piece entitled “Family Firms Need Professional Management,” one of their key insights is that family-owned and family-led organizations sit near the bottom of that list.

What do we do with that?

Now, other than the fact that you might work in or lead an organization like this, why should you care about this data point? As I have discovered since assuming leadership for the Koch Center in early 2021, one compelling reason is that family business is everywhere. While the data is tricky to nail down given different definitions of family ownership, some have suggested that as many as 90% of all businesses in the US are family-controlled (Colli, 2003).

Looking beyond the small business that accounts for some of this finding, consider that founding families also have substantial stakes in about a third of the largest US companies (Shieifer and Vishny, 1986). This means family business includes everything from Walmart and Ford Motor Company to your mom-and-pop operation.

Understanding how to expand the professionalism of these operations is one piece of our goal to drive economic efficiency and extend impact throughout the broader economy.

Now, let’s consider how a research university such as ours might contribute uniquely in this space by returning to the conclusions from Bloom and colleagues. The first bit of good news is that data is not destiny. Just because the category of family-owned firms scored lower on professionalism does not mean that it must be the case moving forward for any particular firm. After all, even within this data, there is a good bit of variance. Put another way, of all family-owned firms in the data, some still scored near the top of the scale and thus on par or above with their public counterparts.

Other patterns within the research provide lessons for families who own organizations. For example, the team found that professionally-managed family-owned firms tended to perform better, on average, than family or founder-led firms.

Another perspective, a brighter picture?

Beyond looking at the professionalism index alone, other research is more optimistic on the ability of family organizations to deliver strong financial performance. Consider the 2016 study, “Fine-tuning family businesses for a new era,” from global consultancy McKinsey & Company:

Overall, family businesses deliver returns on assets that are comparable to or even higher than those of state-owned or widely held companies. But what’s noteworthy about their performance is asset productivity and brand value: their asset turnover, or ratio of revenues to invested capital, is roughly twice that of other companies, and they account for 80 percent of the brand value of the world’s most valuable labels.

Take this all together and you start to realize that how you lead a family organization makes a significant difference in how the organization performs.

In our view, this is where a university can uniquely add value. If the vision of Olin Business School is to “provide world-changing business education, research and impact,” we must participate in this by sharing material that stretches your thinking. We must create opportunities for you to craft strategies that leverage the unique structure by being family-owned.

After all, this is how you create value for owners, employees and the communities you serve. Whether you are a mom-and-pop restaurant or an iconic, global family organization—Ford, Walmart, LVMH, Cargill—for the Koch Center to have a genuine impact on practice, we have to shape you, the practitioner.

Leveraging scholarship to create service

For family organizations to thrive, we believe this is best done not merely by matching the professionalism of public firms or private, equity-controlled counterparts. Instead, we are interested in using scholarship to identify unique forms of performance not easily achievable by publicly traded firms or those with a shorter-term capital mindset. After all, taking the playbook from one type of organization and narrowly applying it to all firms would be a mistake.

Consider, for example, work by Roger Martin from the University of Toronto, writing in HBR, “It’s Time to Replace the Public Corporation.” Here, he explores ways in which private ownership enables a proper focus on the long-term. One might look no further than Warren Buffet to see an investor who realizes the potential power of family culture and legacy and how operating with an extended time horizon might be a source of unique competitive advantage.

In other words, while any episode of HBO’s “Succession” will highlight how a clash between family and business purpose can undermine the value creation of family organizations, we also believe that a creative alignment of these goals might drive a different way of operating in the marketplace. You’ll hear echoes of some of this potential in what Olin alumni and MTM CEO Alaina Macia shares in our September’s “View from the field.”

That is why we are here. This is what you are likely to see from us moving forward. We know a university is not the only player that can add value within this space. This understanding guides the mix of academics and practitioners we intend to bring to your inbox and to our events.

That said, we do think we can be unique in providing some objectivity and rigor when exploring essential questions that deserve actionable insights. Through a mix of research, thought leadership and events that allow you to explore and design strategy in real-time, we hope to aid the development of a sector that drives much of our economy.

To the extent we can assist this development—through models to drive professionalism, methods to think about capital with a longer time horizon, or approaches to balancing family and business purpose—we will consider our work a success.

We look forward to engaging in this ongoing conversation in the months ahead.




WashU Olin’s Center for Analytics and Business Insights is on the cusp of creating a machine-learning tool to flag suspicious opioid sales, just as government lawyers announced a multibillion-dollar settlement against three major drug distributors—a settlement that requires a database to track the destination of every opioid dose.

Analyzing a database of more than 400 million opioid transactions from the US Drug Enforcement Administration—a database that includes 277,000 buyers from 2006 to 2012—Olin researchers are building an algorithm that would help law enforcement officials identify shady opioid transactions in the future. The Olin scholars are working to understand key differences in the characteristics and behaviors of convicted buyers who they have identified in the data set to that of unconvicted buyers to inform their model-building approach.

“We want to ‘learn’ what variables distinguish the ‘bad’ buyers from the ‘good’ buyers,” said Seethu Seetharaman, Olin’s W. Patrick McGinnis Professor of Marketing and co-director of the Center for Analytics and Business Insights. “Once we learn the important variables that distinguish bad buyers from good buyers, we train a machine-learning algorithm to take these variables for a given buyer and give a probability score of that buyer being a bad buyer.”

Research to support policy recommendations

Seetharaman, along with CABI co-director Michael Wall, is collaborating with Luoyexin (Annie) Shi, an Olin PhD student in quantitative marketing, on the analysis. The research underpins the first of three projects by the Olin-Brookings Commission. This first project centers on the opioid crisis and what policy measures are needed to confront it long-term.

The entire initiative was made possible by a $750,000 grant from The Bellwether Foundation Inc. This first commission, like the next two, is charged with tackling topics affecting the quality of life for people in St. Louis and across the country.

Seetharaman said the team’s work on the DEA data has quickly shown promise as a law enforcement tool to flag transactions that divert often legitimate prescription therapies toward illicit uses.

“Using the predictive algorithm, the DEA could predict a buyer’s probability of being a bad buyer,” he said. “This way, the DEA can allocate their human and capital resources wisely among high-value leads.”

A well-timed approach

The results come just weeks after lawyers for states, cities and counties plagued by staggering numbers of opioid deaths announced a tentative $26 billion settlement against three distributors of pharmaceutical painkillers: McKesson, Cardinal Health and AmerisourceBergen. The settlement would also include Johnson & Johnson, which no longer supplies raw material for opioids or sells such painkillers in the United States.

“Under the deal, the three distributors, which control 85 to 90% of the market, are required to establish and fund a ‘clearinghouse’ that shows where every opioid dose is headed,” The Washington Post wrote in its report on the settlement. “They must check the database before sending out each shipment of pills and hold theirs back if it appears that the recipient is asking for an extraordinary amount of drugs, a typical sign that some are being diverted and sold on the street.”

According to The Post, more than 100 billion prescription hydrocodone and oxycodone pills were distributed in the United States from 2006 to 2014. Last year, approximately 69,700 people died of overdoses involving opioids in the United States.

Shi said the database she’s analyzing—known as ARCOS, or Automated Reports and Consolidated Ordering System—covers the sale of 14 main varieties of opioids. Those can be further broken down into 170 kinds of substances, and further broken down into 9,133 different products.

The inaugural Olin-Brookings Commission includes a dream team of data scientists, law enforcement authorities, medical professionals and addiction experts with years of industry and policy experience between them. Commission chair Anthony Sardella—founder of evolve24, Olin faculty member and CABI research advisor—serves as a critical conduit between research efforts and the expertise of the commission.

In their current project, supported by CABI, the group is charged with identifying strategies for combatting the epidemic of opioids and recommending any changes in local, state and federal policy that might help curb the problem and sharpen the response from experts.

The commission’s next meeting is set for August 19. The group intends to issues its final report and policy recommendations in early 2022.




Suppose the epidemic of opioids plaguing the United States could be stopped at the source? Suppose 21st century technologies such as data mining, artificial intelligence and machine learning could flag risky drug shipments before they land in the hands of at-risk populations?

How could it be done? And what changes in local, state and federal policy would be required to curb the problem and sharpen the response from experts in law enforcement, public health and industry?

These questions form the heart of a new initiative between WashU Olin Business School and the Brookings Institution. Broadly speaking, the Olin-Brookings Commission is a three-year initiative designed to recruit a dream-team of policy experts and scholars each year who will deeply analyze a single major policy issue and issue policy recommendations.

Made possible by a $750,000 grant from The Bellwether Foundation Inc., each commission will be charged with tackling topics affecting the quality of life for people in St. Louis and across the country. Each year’s panel will issue practical and realistic recommendations informing business strategy and public policy.

“We are pleased to provide multiyear support for the Olin-Brookings Commission,” said Ginger Smith, president of The Bellwether Foundation. “Funding an initiative that deepens the partnership between Olin and Brookings, two leaders in their industries, is where we believe we can make an impact.”

The focus of our first commission

Our first commission convenes this month. This first six-member commission—in partnership with Olin’s Center for Analytics and Business Insights—will demonstrate how new technologies can curb opioid trafficking and potentially more than 100 other equally destructive examples of illicit trafficking.

At the same time, the commission will evaluate existing policy obstacles and reveal opportunities where policy changes can enable industry and government to implement a real-time detection and alert system across industry and government agencies.

“The initiative is very compelling. It leverages new advances in artificial intelligence and machine learning to proactively detect suspicious opioid orders before they are shipped,” said Anthony Sardella, chair of the first commission and founder of data insight firm evolve24. “This effort holds the promise to save lives, enhance public health and protect our vulnerable populations.”

An initial phase of the opioid research project involves mining a relatively new database from the US Drug Enforcement Agency: the Automated Reports and Consolidated Ordering System. CABI co-directors Seethu Seetharaman and Michael Wall, along with Tony (who also serves as CABI’s senior research advisor), will lead the data analysis portion of the project.

“I am excited that CABI is involved in such a high-stakes national policy-related initiative in terms of showcasing the analytics talent resident in Washington University in St. Louis,” Seethu said. “This could not fit more perfectly with the values-based, data-driven mission of Olin.”

Another key component of the Olin-Brookings Commission is involvement from students, who will serve as “commission fellows” in research and logistical support for each project. Olin PhD marketing student Annie Shi will collaborate with Tony, Michael and Seethu and together, they will be co-authors on all publications that arise from this initiative.

Meanwhile, I’m pleased to announce that our first commission includes heavy hitters from the pharmaceutical industry, academia, law enforcement and advocacy organizations focused on drug policy. Find the list of commission members at the bottom of this column.

A signature program?

The Bellwether grant makes possible a long-held vision of mine, an extraordinary opportunity to further leverage and expand Olin’s powerful relationship with Brookings, while also convening thought leaders who can provide guidance and direction on “megatrends” in global business and public policy.

We envision that each commission’s report—targeting the White House, regional and national government policymakers and the media—would coincide with the springtime Olin MBA capstone experience with Brookings. That is our timeline for a report on the opioid project.

Commission members will convene in a series of virtual meetings—at least while the pandemic continues raging—over the course of this year.

In addition to recommendations influencing business practice and public policy, the initiative is structured to provide insightful, well-researched contributions to industry about societal megatrends, inform and influence the direction of future research and increase students’ knowledge about the confluence of business and public policy.

I’m confident that the Olin-Brookings Commission can become one of Olin’s signature programs, further cementing our commitment to improving life in St. Louis—and changing the world, for good.

Members of commission No. 1, opioid trafficking

  • Anthony Sardella, founder, evolve24; faculty member, WashU Olin Business School. Commission chair.
  • The Hon. Mary Bono, board member, Community Anti-Drug Coalitions of America, former US representative.
  • Dr. Ann Marie Dale, assistant professor of medicine and occupational therapy, Washington University School of Medicine
  • Van Ingram, executive director, Kentucky Office of Drug Control
  • Gina Papush, global chief data and analytics officer, Cigna.
  • Darrell M. West, vice president and director, Governance Studies; senior fellow, Center for Technology Innovation, Brookings



In its sixth year, the WashU Olin Family Business Symposium provided a deeper look into how the culture of family business drives performance and outcomes—and how that culture can be preserved throughout generations.

The symposium, entitled “The Importance of Culture in a Family Business,” was hosted by the Koch Center for Family Business and was held virtually across four mornings in February.

As session one panelist Mark Leeker, managing director of Harbour Group, put it, “It always comes down to the people and the ability to have a culture that is recognized and known, so that as you go through changes, you can always fall back on what it is that you do and what’s your central core.” 

Building a team at Tata Consultancy Services

Subramanian Ramadorai

On Tuesday, February 2, Subramanian Ramadorai, former MD and CEO of Tata Consultancy Services, spoke to Spencer Burke, Olin’s Eugene F. Williams, Jr. executive in residence. TCS is one of the world’s largest IT, consulting, and business solutions organizations. Ramadorai is largely responsible for its growth over the past four decades.

The keynote presentation was followed by a panel discussion with Leeker and Olin’s Seth Carnahan, associate professor of strategy, moderated by Koch Center Director Peter Boumgarden.

Eight generations and counting

Lisanne Cape Dorion

The second week of the symposium, on February 10, featured Lisanne Cape Dorion, board director, and Scott Northcutt, senior vice president of human resources, of Bacardi, Ltd. Dorion and Northcutt shared some of the strategies that Bacardi, a 150-year old family-owned beverage company with over 1,000 family members across eight generations, uses to encourage innovation while preserving the company’s long-held values. 

Following the Bacardi presentation, Gina Hoagland, chairman & principal of Collaborative Strategies, Inc. moderated a panel discussion with Joshua Hager, president and COO of Hager Companies, Kevin Maher, Jr., vice president and general manager of St. Charles Automotive, and Chris Seyer, CEO of Sayer Industries, Inc. 

Investments and banking

George H. Walker

George H. Walker, chairman and CEO of investment management firm Neuberger Berman, spoke on the structure of the employee-owned firm and how the ownership approach can inform the company’s long-term planning and innovation. With offices in 24 countries, Neuberger Berman has been named by Pensions & Investments as a Best Place to Work in Money Management, finishing first or second each of the last five years. Many of Walker’s experiences of workplace culture in a financial institution were echoed in the panel discussion with David Eichhorn, CEO and head of investment strategies at NISA Investment Advisors, and Michael Dierberg, chairman of the board at First Bank.

Sports, family, and the community

Carolyn Kindle Betz

The final morning of the symposium, on February 25, was the most popular and likely of most interest to St. Louisans: a panel discussion between Carolyn Kindle Betz, CEO of St. Louis CITY SC, William DeWitt III, president of the St. Louis Cardinals, and Tom Stillman, chairman and governor of the St. Louis Blues. Kindle Betz, DeWitt, and Stillman spoke on balancing the need for both continuity and change in sports organizations as old as the Cardinals (140 years) and as new as the St. Louis CITY SC (announced in 2019 and expected to begin play in 2023).

Videos for all four events can be found below. Find more information about the Koch Center for Family Business and videos and audio recordings from past events here




Forty of the world’s leading supply chain scholars were invited to the Olin Business School at Washington University in St. Louis, back before a virus’ early days gave rise to shortages of cleaners, toilet paper and such. This was May 2019, under the auspices of the 5thSupply Chain Finance and Risk Management Workshop in which The Boeing Center for Supply Chain Innovation served as host.

The assembled academics offered such relevant presentations, research and ideas — a full nine months before a pandemic derailed, if not stymied, global operations — that it produced a special edition in scholarship: how to pay for production and distribution today and manage global risks in a highly uncertain COVID-19 environment. Supply Chain Finance and Fin Tech Innovations was published Oct. 1 as the 14th volume of Foundations and Trends in Technology, Information and Operations Management.

The volume was co-edited by two Boeing Center/Olin faculty: Panos Kouvelis, the Emerson Distinguished Professor of Operations and Manufacturing Management and the center’s director, and Ling Dong, professor of operations and manufacturing management. Their third co-editor was former Olin colleague Danko Turcic of the University of California, Riverside.

Kouvelis

“Innovative ways in managing working capital within global supply chains is of utmost importance in a turbulent environment,” said Kouvelis, who also sits on the journal’s editorial board. He also was part of a team that published a separate paper on these issues in the journal Production and Operations Management. “Especially small suppliers in global supply chains are currently stretched thin in their liquidity and ability to collect on their accounts receivables. Their debt exposure has drastically increased, and they rely on innovative financing schemes by their large corporate customers, such as reverse factoring schemes, or on fin tech innovations, such as the Ant Group fast loan services.”

Hot-off-the-press ideas

Supply chain managers who want to stay in the forefront of such practices can benefit from the hot-off-the-press ideas in research shared in the workshop and appearing in the edited volume. “Our workshop benefits from the close interaction of the Boeing Center with its member companies, and we listen to the timely topics they want us to research. We bring state-of-the-art thinking back to them to advance their practices,” Kouvelis added.

The scholars came from the London Business School at the University of London, University of Chicago, Northwestern, Penn and Carnegie Mellon as well as top universities in Australia and China. They authored 10 different papers parsed into three supply chain themes: financing issues in supply chains, fin tech innovations for working capital and risk management, and advances in risk management of operational systems.

Dong

“Supply chain risk management is the other topic of timely importance in the current environment,” Dong said. “The last 20 years, and especially during the pandemic, made apparent to all that we are more frequently exposed to increased severity disruptive shocks. Building supply chain resilience is what all companies aspire in their initiatives right now.”

The question always remains: How to do it.

“There are some very interesting ideas and practical suggestions on better hedging operational and supply chain risks in the work summarized in the volume,” Kouvelis said.

Working capital needs

In another recent work, Kouvelis and Turcic addressed both of the challenges prominently mentioned above: supporting working capital needs and better hedging certain risks (exchange rate exposure, commodity price fluctuations, interest rates and so on). The two researchers teamed on an automotive industry study forthcoming in Production and Operations Management.

They looked into the effectiveness of two data-driven financial hedging policies, cost hedging and cash hedging, aimed at mitigating financial distress, with their data coming from car manufacturing environments. The paper is titled “Supporting Operations with Financial Hedging: Cash Hedging Versus Cost Hedging in an Automotive Industry,” and for this study, they used data from the Federal Reserve Bank of St. Louis, U.S. Bureau of Labor, U.S departments of Treasury and Energy, and International Monetary Fund data.

The widely used cost-hedging strategy calls for carmakers to hedge raw material and production input purchases. That means they need to trade in raw materials to avoid higher costs, such as amassing the four essential commodities: aluminum, steel, zinc and plastic. Kouvelis and Turcic argue that a better way is to focus on cash hedging under which the firm hedges its net cash flow. Although managers are concerned about fluctuations in commodity prices, their study points out that demand changes are the most significant factor to be hedged.

Their findings also meant that cost hedging is barely more effective than no hedging at all and less effective — plus more costly — than a cash-hedging strategy, which hedges cost and demand. Moreover, in the current pandemic-affected environment, with changing consumer behavior and spending approaches across many product categories, including cars, and with volatile commodity prices, manufacturers should use cash-hedging policies to enhance operating cash flows and protect against financial distress.

Photo: Empty grocery store shelves in Vancouver, British Columbia, in March 2020 reflect the global supply chain disruptions amid the COVID-19 pandemic. (Margarita Young/Shutterstock.com)