Tag: Research Centers



Dolapu Ojutiku, MBA ’21, writes today about his summer consulting experience at Liberty Mutual. He was invited to return to Liberty Mutual full-time after graduation. His contribution is part of a series by students sharing their summer internship experiences with the Olin blog.

My internship has been one of the highlights of my MBA experience so far. I spent my summer working at Liberty Mutual as a consultant in the corporate development program. I worked on a project that had real impact on the company. I did an assessment of one of our largest vendors to streamline processes and evaluate opportunities for improvements. One of my contributions that is being implemented is a scorecard that provides better insights into the performance of our vendors. It was an eventful summer and I’m pleased to be joining the company full time after graduation. 

My internship was originally intended to be in person but ended up being virtual due to work-from-home policies as a result of the coronavirus. I initially wasn’t sure what to expect, but the company did a great job of creating ways to engage with us and build community virtually. Some examples of this include a virtual town hall with the CEO to address racial injustice in the US, an executive speaker lunch series for the interns, and a virtual baking event with Joanne Chang (Boston’s Flour Bakery), a former management consultant turned chef.

Olin did a great job preparing me. I started working with my career coach at the time, Jeff Stockton, before I had even arrived on campus to start my program. I was able to participate in the Consortium Orientation Program in Houston last summer and had to get ready for recruiting much earlier than usual. The WCC team—as well as my academic advisor, Ashley Macrander—were also a good support system throughout my first year.

I found that a lot of the frameworks we learned during Seth Carnahan’s strategy class turned out to be valuable for my internship. Two other classes that really helped me succeed were “Negotiation,” by Hillary Anger Elfenbein, and “Power & Politics” by Peter Boumgarden. Lessons from those classes came in handy when negotiating with cross-functional teams and influencing people to buy-in to my project.

My advice for students about the interview process is to try to network as much as possible, since you never know who might end up being your advocate in discussions that you’re not part of. I also found value in starting case prep very early on; I attended the Management Consulted workshop as well as some of the OSCA case sessions and found them to be very helpful in supplementing my case prep. In my personal experience, preparing well for the consulting case interview made other interviews easier.

In hindsight, I realize that a lot of the pillars we value at Olin helped prepare me for my internship. I had to be entrepreneurial and take ownership for the direction and outcome of my project. I also needed to make sure that decisions I made were supported by data, but not without considering the effect it had on our customers and the values they’ve come to expect from the company.




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)




A.N. Sreeram and Dr. Clive Meanwell

The one American company that is the most innovative, the most effective at research and development, of the five most attention-grabbing US-based companies isn’t one that’s developing your cellphones, creating your home tech devices or delivering goods to your door.

Prof. Anne Marie Knott

Rather, it’s one you watch: Netflix.

The 2020 Research Quotient Top 50 (RQ50), highlighting the most innovative US companies, was unveiled September 18 at The Industrial Innovation Path to Economic Recovery Conference hosted by the Boeing Center at Washington University in St Louis.

A recent paper, forthcoming in the Journal of Financial and Quantitative Analysis, finds that RQ is the only innovation measure that reliably predicts market returns.  That paper was co-authored by Michael J. Cooper of the University of Utah, Wenhao Yang of the Chinese University of Hong Kong, Shenzhen and  Anne Marie Knott, the Robert and Barbara Frick Professor in Business at WashU Olin, who pioneered the RQ measure.

The conference attendees, in an online audience poll, predicted Amazon would prevail as the most innovative among the FAANG notables: Facebook, Amazon, Apple, Netflix and Alphabet (formerly Google). In addition to unveiling the new list, Knott, at the Boeing Center/Olin conference, oversaw a panel discussion with two “RQ50 Hall of Famers”—firms that have been in the RQ50 for 10 or more years: A.N. Sreeram, Senior vice president and chief technology officer of Dow (20 years in RQ50), and Dr. Clive Meanwell, founder of The Medicines Company (10 years in the RQ50), whose company became ineligible for the RQ50 after being acquired by Novartis last year.

Keys to research investment success

Knott pointed out it was interesting to hear their discussion echo what her RQ scholarship has found: The keys to successful innovation, even in this instance for a 123-year-old company and a biotech startup, are not all that different.

“Keeping secrets is overrated. If you don’t collaborate and share IP, you’re highly unlikely to develop anything of great use.” 

Dr. Clive Meanwell

“How can you build wisdom faster?” asked Sreeram. “Make research available to innovators.”  He noted that every research report conducted at Dow since 1934 is fully digitized and available to researchers at the firm today. Sreeram praised such information sharing as an effective means of facilitating wisdom and learning, even among expert-level professionals. 

The RQ50 session was part of the five-session conference that received national attention after it opened with a fireside chat that Olin Dean Mark P. Taylor hosted with St. Louis Federal Reserve Bank President James Bullard, who characterized the new debt associated with COVID-19 interventions and offered his perspective on lifting inflation. This set the stage for a series of discussions to understand how best to invigorate technological change to spur economic growth sufficient to handle the debt.

Research versus innovation

While many argue this is best accomplished by increasing research, which takes place predominantly at universities and government labs, the conference focused attention on innovation—converting research into products and services that people want to buy. The latter takes place in companies, where 70% of U.S. R&D is conducted.  

Recognizing that companies can’t drive growth themselves, the conference included a panel discussion with three investors known for their long-horizon approach: Michelle Edkins, managing director, BlackRock Investment Stewardship; Penny Pennington, managing partner, Edward Jones; and Jared Woodard, director for global investment strategy, Bank of America. The panel was moderated by Todd Milbourn, vice dean of faculty and research and Hubert C. & Dorothy R. Moog Professor of Finance.

Woodard spoke to the importance of R&D and the RQ metric.

“One of the things that has become incredibly important in a world of low-economic growth, low-interest rates and low profits is the ability to find companies that can use R&D and capex [capital expenditure] dollars efficiently,” Woodard said. “And I think RQ is a great example of one methodology for finding those kinds of firms.”

“We’re always talking to the boards and management of companies about long-term challenges and opportunities and that includes R&D and capex,” Edkins added. “We are seeing COVID-19 accelerate macroeconomic trends key to R&D.”

Pennington mentioned the importance of efficient R&D over long-investing horizons in any environment and the imperative to identify firms whose R&D drives “return on investment in excess of the cost of capital,” characterizing that search as a “fundamental root of serious long-term investing.”

Emerging research on innovation

The conference also included a session of emerging academic research which offered an evidence-base for what innovation strategies and polices work, and which don’t. Participants included: Chad Syverson, University of Chicago, “Product Innovation, Product Diversification,and Firm Growth: Evidence from Japan’s Early Industrialization;” Florian Ederer, Yale School of Management, “Killer Acquisitions;” and Willy Shih, Harvard Business School, “Some Attention to the Demand Side, Please.”

While companies invest 70% of some $580 million invested in US R&D, the government is the next largest source of such funding—22%. In a closing keynote talk, Knott guided a discussion with Jaymie Durnan, director of strategic initiatives at Lincoln Lab, focusing on how those funds could be better spent. Moreover, Durnan discussed what government policies might drive more growth from R&D.

In the end, the audience met in breakout rooms to synthesize insights gleaned across the sessions to generate actionable recommendations to increase growth from innovation and thereby emerge from the pandemic in better shape. These insights and a conference report will be available on the Boeing Center’s LinkedIn page.




Alex Haimann

Koch Center for Family Business Associate Director Alex Haimann was recently published in the Harvard Business Review. His article, “How to Design a Better Hiring Process,” suggests a number of innovative alternatives to the standard “What are your strengths and weaknesses?” approach to evaluating prospective hires.

Better methods, he says, might be to “immerse job candidates in unconventional scenarios to gather the most useful insights about their critical-thinking abilities, tech savviness, and interpersonal skills,” for example, testing technical skills by observing the candidate’s real-time problem-solving process.

Haimann reports success since implementing this approach in his own business, seeing significant increases in retention and quality of new hires.

In addition to his work with the Koch Center, Alex is a partner and the head of business development at Less Annoying CRM, a simple CRM built from the ground up for small businesses. More than 10,000 small businesses worldwide use LACRM to manage contacts, track leads, and stay on top of follow-ups. LACRM continues to grow by engaging customers and finding new opportunities for mutually beneficial partnerships.




Family members who are CEOs of their family business remain in the role longer and are rarely forced out. That’s one finding in a newly released research brief from the Koch Center for Family Business, “Family CEOs, Turnover, and Firm Performance.”

The brief was co-written by Koch Center Director Barton H. Hamilton, Professor Andres Hincapie (UNC), and research fellows Simone Hanna and Noah Lyman.

The brief details the following findings regarding the turnover and performance of CEOs in family businesses:

  • CEO performance has a signicant impact on the likelihood of forced turnover.
  • Family CEO successors remain CEO for longer and are almost never forced out.
  • Insiders (both family and non-family) tend to be appointed in more profitable companies than outsiders. Insider CEOs appear to outperform outsiders as a result.
  • Family insiders are younger and have more experience in the firm at time of appointment than unrelated insiders.
  • Founders are more likely to be forcibly removed from office by year two than any other CEO type.

Find more research and resources on family business and succession at the Koch Center site.