41 minute read
Faculty News
Faculty Legends Retire
Darden Professors Bob Conroy, Ed Hess, Alec Horniman and Elliott Weiss retired from teaching full-time at the end of the 2020–21 academic year. These familiar faces helped shape the School, expanded its curriculum and reach, and made it more globally focused — all while carrying forward Darden’s tradition of teaching excellence and student centricity.
BOB CONROY
J. Harvey Wilkinson Jr. Professor of Business Administration Finance
When Professor Bob Conroy was weighing a job offer from Darden more than three decades ago, he was struck by the unity of purpose among the faculty and staff, the sense that everyone was on the same page.
“Everyone I talked to knew what the School was trying to do. There was a sense that this was a place where you could come and be involved in something bigger than you,” said Conroy. “Everyone wanted to create a transformational experience for the students.”
Conroy, who retired from full-time teaching at the end of the academic year, joined the Darden faculty as a professor in the Finance area in 1988. In addition to leading generations of students from all backgrounds through the finer points of valuation and capital management, he helped shape the direction of the School through multiple stints leading the Full-Time MBA program as associate dean.
His record of accomplishment in leadership roles included establishing exchange programs and global programs as international studies coordinator, bringing key elements of coursework and materials online for the first time, and helping to establish the Executive MBA program in the mid-2000s.
After news of Conroy’s final class was posted on social media, thanks and congratulations poured in from colleagues and former students. A general theme: Students remembered a professor who cared about their progress and met them where they were to help them get to where they needed to be. ELLIOTT WEISS
Oliver Wight Professor of Business Administration Technology and Operations Management
Much of Darden Professor Elliott Weiss’ professional life has been devoted to process improvement — how to eliminate wasted effort and optimize processes.
After working with Darden students of all ages and stripes on Lean and related processimprovement topics for more than three decades, Weiss retired from full-time teaching at the end of the academic year.
After growing up in the Philadelphia area and teaching at Cornell, teaching the case method at Darden shifted how he viewed his role, realizing that he was “teaching people, not stuff.”
“The hardest part of the case method is figuring out the correct question to ask so that the students can develop the necessary skills for determining solutions and recommendations for themselves,” said Weiss.
Operations management and inventory control can be nebulous concepts for MBA students without backgrounds in the space. Throughout his career, Weiss sought ways to drive home key operations strategies in relatable ways — the inventory of milk in a refrigerator or the optimal way to feed a baby at night, for instance.
Indeed, Weiss’ voluminous case output spans fields and topics, with examples including tying a problem-solving process to weight loss, using a comic about rabbits to teach service systems and the lessons a cult fast food chain could teach about lean transformation, among many others.
Few faculty members are as associated with the Darden School as Professor Alec Horniman.
Horniman came to Darden in 1967, part of a formidable class of new hires that included Professors John Colley and Bill Sihler.
Horniman came at the behest of Dean Charles Abbott, who asked if he could come down from Harvard and teach courses in the Learning and Organizational Behavior area. Horniman would stay for more than 50 years, becoming instrumental in elevating the Darden MBA, a leader in the Executive MBA and an architect of The Executive Program, among other indelible marks.
A master of multiple subjects, Horniman taught ethics, strategy, leadership, health care, psychology and various combinations thereof, and frequently carried a double-load of classes.
Horniman was the first director of the Olsson Center for Applied Ethics, helped introduce classes such as “Business Ethics and Managerial Decision-Making,” and introduced an ethics module into the First Year curriculum.
A giant among Darden professors, Horniman’s legacy lives on in the thousands of students he transformed into ethical, lifelong learners across the world.
As one high-profile Darden graduate wrote in a letter testifying to Horniman’s impact: “Alec highlighted, for those willing to hear the message, that our connection with humanity is what makes the difference.
“His wisdom is timeless and universal.”
ALEC HORNIMAN
Killgallon Ohio Art Professor of Business Administration Leadership and Organizational Behavior
Bloomberg Businessweek wrote about the incredible lengths the School's faculty and students went to last academic year to preserve the Darden experience. Pictured left, as COVID-19 restrictions at UVA and in Virginia were eased in May, students were finally able to gather in person in larger numbers to celebrate the end of the academic year.
Darden in the Media
The Darden School, its faculty, students and alumni continue to be valued sources for the media, providing insights on breaking news and hot topics. From The Washington Post to Financial Times, leading global publications sought members of the Darden community this spring to discuss everything from life on campus in a pandemic to the shifting landscape of the video game business to the future of work.
MBAs Wander Minecraft-Like Campus for Covid-Era Networking Bloomberg Businessweek
A key selling point of business schools is their ability to bring together students of various nationalities and backgrounds, who forge friendships in the hallways and lounges that pay dividends decades later. But in an era of online learning, MBA students are struggling to make such connections — spurring schools around the world to develop new avenues to those crucial relationships via virtual campuses, Slack channels, and Zoom roadshows.
Students at the University of Virginia’s Darden School of Business have organized online games of Jeopardy! to create a sense of cohesion. And though annual fixtures such as the Darden Follies and Spring Soirees were canceled, the Darden Cup — a sporting competition among the school’s five sections — took place through the Strava fitness app. Students and staff logged a combined 10,496 miles of biking, running, hiking, and even playing rounds of golf. The events “take your mind off the many stressors of the MBA program by giving you a chance to have fun with your classmates,” says Nick Talbott, a Darden student who set up the Jeopardy! games. How Big Game Acquisitions Can Affect Players Lifewire
Video game companies are on a buying spree, and analysts warn that it could mean worse games at higher prices at this level of company consolidation.
The venture capital firm Pitchbook tracked over 1,500 transactions in the field over the course of 2020, with major companies like Nintendo, Electronic Arts and Tencent making significant buys. That trend is likely to continue into the rest of 2021. “It's an arms race, not for technology, but for intellectual property and developers,” Darden Professor Anthony Palomba said. “People who have experience developing games at a high level are at a premium. Now you're seeing a bidding war, similar to Ryan Murphy and Shonda Rhimes being snatched up by Netflix.” Future-Ready Your Career (Written by Dean Scott Beardsley) The Washington Post
After two decades of exponential technological growth, work as we know it is changing forever — yet key values endure.
Tomorrow’s workplace will see the proliferation of automation, robots, machine learning and artificial intelligence. Data will go from big to colossal, and video-enabled collaboration will push teams further, faster.
In the workplace of tomorrow, leaders will need to adapt to the speed of technological change. They will need to hone their digital and analytical capabilities and navigate the intersection of technology and ethics through responsible leadership. Caring for all stakeholders will deliver greater value to customers and communities, while achieving equitable, inclusive progress will yield innovation and better performance.
Above all, leaders will need to view learning as continuous. By weaving together online and in-person bursts of learning, they will provide competitive advantage for their companies and career relevance for themselves.
Recently Released and Upcoming Books From Darden Professors
Choosing Courage: The Everyday Guide to Being Brave at Work (Harvard Business Review Press)
Professor Jim Detert
Detert’s book offers readers a clear framework and tactics for standing up, speaking out and acting with courage in the workplace.
Emerging Domestic Markets: How Financial Entrepreneurs Reach Underserved Communities in the United States (Columbia Business School Publishing)
Professor Greg Fairchild
Fairchild shines a light on entrepreneurs and financial institutions harnessing the promise and power of underserved populations.
Experiencing Design: The Innovators Journey (Columbia Business School Publishing)
Professor Jeanne Liedtka, Karen Hold and Jessica Eldridge
Liedtka and co-authors draw on decades of research to offer a guide for how to create the shifts in mindset and skillset that are required to achieve transformational impact.
Humanizing Business: What Humanities Can Say to Business (Springer)
Professor Edward Freeman, Michel Dion and Sergiy Dmytiyev
In this edited volume, Freeman and co-authors travel outside of the business world to explore what the humanities can offer to business.
Giving Voice to Values: An Innovation and Impact Agenda (Routledge)
Professor Mary Gentile and Jerry Goodstein
This edited volume considers the future of Giving Voice to Values (GVV) and possibilities to sustain its success. Gentile served as the series editor for multiple GVV books in 2020, including Ethics Training for Managers: Best Practices and Techniques; Professionalism and Values in Law Practice; and Shaping the Future of Work: A Handbook for Action and a New Social Contract. Marketing Analytics: Essential Tools For Data-Driven Decisions (UVA Darden Business Publishing)
Professors Raj Venkatesan, Ron Wilcox and Paul Farris
The Darden professors provide a forward-looking, predictive perspective for making marketing decisions. Models of Leadership in Plato and Beyond (Oxford University Press)
Professor Edward Freeman and Dominic Scott
Freeman and Scott relate Plato’s work to contemporary leadership theory and practice.
The Tao of Strategy: How Seven Eastern Philosophies Help Solve 21st Century Business Challenges (University of Virginia Press)
Professor L.J. Bourgeois III, Serge Eygenson (MBA ’17), Kanokrat Namasondhi (MBA ’15)
Wisdom from Eastern world philosophers and lessons from modern-day business leaders combine to provide readers innovative approaches to unlock strategic breakthroughs.
Passing the Baton, Competitive Dynamics and Ambiculturalism (China Machine Press)
Professor Ming-Jer Chen
This three-volume series of the selected works of Chen offers insights on the differences between Eastern and Western management techniques.
The AI Marketing Canvas: A Five-Stage Road Map to Implementing Artificial Intelligence in Marketing (Stanford Business Books)
Professor Raj Venkatesan and Jim Lecinski
Venkatesan offers an actionable plan marketers can use to incorporate artificial intelligence into a marketing toolkit.
Research Handbook of Responsible Management (Edward Elgar)
Professor Edward Freeman, Oliver Laasch, Roy Suddaby and Dima Jamali
Freeman and his co-authors’ research handbook offers a cutting-edge take on the avenues to responsible management in the 21st century.
Positioning for Advantage: Techniques and Strategies to Grow Brand Value (Columbia University Press)
Professor Kimberly Whitler
Whitler offers a comprehensive how-to guide for creating, building and executing effective brand strategies, offering a road map to create brands that attain positional advantage in the marketplace.
UVA DARDEN IDEAS TO ACTION The Future of Learning, Female Entrepreneurs and Our Planet’s Climate
The Darden Ideas to Action podcast celebrated its first birthday this winter the same way it launched: with key insights from Darden professors on the biggest hot topics impacting business and society today.
This spring, the podcast — hosted by the Batten Institute’s Sean Carr (MBA '03, Ph.D. '13) — included episodes featuring Dean Scott Beardsley on the future of learning; Professor Mike Lenox and Senior Researcher Becky Duff on how innovation can create a path to stop catastrophic climate change; and Professor Gaurav Chiplunkar on how barriers faced by female entrepreneurs impact us all and stifle the global economy.
“I believe we’re seeing a proliferation of learning forms in degree and non-degree formats from many different providers because the need for learning is so high. We’ve never been on an exponential growth curve enabled by technology the way we have the last 20 years. It’s unique in the history of humanity.”
— Dean Scott Beardsley on the need for new means and providers of lifelong learning “I choose optimism because I think the alternative is quite scary. But it’s going to take more. I think we all have to be very clear, it’s going to take more from the policy arena, it’s going to take more from the public sector and the private sector, and it’s going to take more from us as individuals.”
— Professor Mike Lenox on what it will take for society to succeed in the fight against climate change "Women hire more women. And so, if female labor force participation specifically is a problem, then supporting women entrepreneurs might be a good idea. What's going to really revolutionize Asia and Africa is every household getting a cell phone with 3G on it. That has direct policy implications when you think about it from the lens of gender."
— Professor Gaurav Chiplunkar on policies to support female entrepreneurs around the world
Subscribe to the Darden Ideas to Action podcast on Apple Podcasts, Spotify or Podbean. To read more expert insights on these topics and more, visit ideas.darden.virginia.edu.
14 THE DARDEN REPORT
AND HOW PURPOSE-DRIVEN LEADERS CAN GET US THERE
By Michael Blanding
he stock trading platform Robinhood launched in 2015 with a noble mission: to make stock trading more accessible to the average Joe. With no trading fees and a friendly user interface, it appealed to retail investors with modest portfolios, especially millennials, who flocked to the app with fierce loyalty. When a group of investors on Reddit, however, conspired to drive up the price on GameStop stock this past January — causing hedge funds that had shorted the stock to hemorrhage millions — Robinhood made the tricky decision to halt trading on the stock. A massive backlash by its users followed, including canceled accounts, lawsuits and congressional hearings.
“On the face of it, it feels like they reneged on their brand promise,” says Professor Bobby Parmar, who teaches business ethics at Darden. “On the one hand, Robinhood wanted to support the idea that anybody can trade, but on the other hand, they don’t want to upset powerful investment companies — so they got stuck between a rock and a hard place.”
Robinhood’s crisis is only the latest example of a company dealing with a complicated ethical issue caused by the unintended consequences of technology.
“Managers are wrestling with all kinds of difficult moral issues that show up in the context of new technology and innovation,” says Parmar, who named a few scenarios that have appeared in newspaper headlines. Uber drivers can assault
their passengers, and vice versa. Airbnb hosts might discriminate by not renting to people of color. Twitter can allow rampant misinformation to spread unchecked.
“Anyone with an internet connection can write whatever they want and send it to their 500,000 followers, and we haven’t figured a way to verify its accuracy,” says Professor Jared Harris. Add to that the technological advancements that facilitate deep fakes — doctored photos and videos that look real — and it creates a very difficult ethical landscape, as it becomes more and more difficult to verify what’s actually true.
“We’re headed rapidly to a world where bad actors can cook up fake videos that are nearly impossible to distinguish from real ones, and what does that world look like?” Harris asks.
Part of the way ethics always works, says University Professor Ed Freeman, is through constant reevaluation as circumstances change and new groups push for recognition. “We have some principles and rules, and we have a case, and we apply the principles to solve the case,” he says. “Now, what happens when we get some new cases?”
Technology is one way that new cases can arise, pitting two principles against each other — say, the idea that people have a right to own their own intellectual property and the ability of Google Books to democratize sharing of information. “That gives rise to the need to reengage the adjustment of principles and cases,” Freeman says.
Such a moment is called reflective equilibrium, in the words of philosopher John Rawls, giving rise to the need to create a new set of beliefs. “A new situation arises, and we have to create new values, because it turns out our forebears didn’t always think about equality of all groups, or what happens if technology allows us to spy on each other in new ways.”
The Problem: Most Companies Are Not Set Up for Reflective Thought
“Silicon Valley for a long time had this motto, ‘move fast and break things,’” Freeman says. Industries such as pharma may undergo deliberate processes to ensure they do no harm, but tech companies are often in a race to produce a product as quickly as possible, consequences be damned. “Because the dominant story in business is about profit and money, a lot of startups get into trouble when they’re not really testing and understanding the larger impacts of their technology,” Parmar says.
That urge prevents companies from performing “pre-mortems” to think through potential problems that may occur weeks or months down the line. Instead, they are often caught flat-footed when problems arise, leading to consumer backlash and
— PROFESSOR ED FREEMAN
opportunities for competitors to take advantage. “When women didn’t feel safe riding in Ubers, it opened up an opportunity for companies like See Jane Go, which was basically Uber for women by women,” says Parmar, “which is a brilliant business model that solved the moral problem.”
Parmar and Freeman suggest two steps for innovation companies to do a better job of thinking ahead: 1. Realize that every business model has moral principles baked into it, whether they recognize it or not. 2. Know that while it’s impossible to predict all outcomes for new technologies, it’s important to engage with all stakeholders — including customers, employees, investors, suppliers, and communities — in order to better predict what might go wrong.
“You have to be engaged, not just with people inside your company but people outside your company,” says Freeman. Leaving any of those constituents behind can be disastrous, he says.
Look no further than Amazon, which perfected the art of getting products to customers fast but is now having to send Tweets insisting its employees aren’t urinating in bottles because they don’t get bathroom breaks. “Amazon is the most customerfriendly company in the galaxy,” says Freeman. “But they haven’t yet figured out how to take care of their own employees.”
Predicting the impact on all stakeholders requires a diversity of perspectives, Parmar adds. “If everybody who’s on the team is thinking the same or reflecting a certain customer demographic, that’s a problem,” says Parmar, citing Airbnb’s issues with racial discrimination by those listing rentals on its platform. “It makes
you wonder: If their teams were more diverse, would that have come up sooner?”
Transparency Is Key to Stem Ethical Dilemmas When Introducing a New Technology
Another essential aspect of introducing new technology is transparency about the way it will be used, argues Professor Roshni Raveendhran. She studies “the future of work,” including examining companies’ use of technologies such as smart badges and computer-tracking software that closely monitors employee behavior and productivity.
“If deployed without understanding the psychology of how those technologies might affect people, they might actually lead to more problems than good,” she says. “It’s almost always the case that people don’t have a good idea about what data is being collected about them, how it’s being used or how it might be used against them.”
In research published earlier this year in the journal Organizational Behavior and Human Decision Processes, Raveendhran found that many people are open to being tracked by such technologies — just so long as the evaluation was being conducted by computer algorithms. “We love feedback about our behavior and knowing how we might actually manage our time differently,” she says. That acceptance diminished, however, if they thought their data was being reviewed by human supervisors.
Raveendhran suggests a better use of such tracking technology is to provide it to the employees themselves, so they can use it to improve their own performance before reviews. “This can be one of the biggest ways in which employers can motivate employees and make them feel responsible for their own future in an
LEAD AT THE INTERSECTION OF TECH & ETHICS
Darden Executive Education & Lifelong Learning offers programs to advance leaders with the core skills and competencies of the digital age, including how to navigate the tough ethical questions new technology can surface. Darden alumni also receive a 30 percent discount on open-enrollment programs.
UPCOMING PROGRAMS
LEADING WITH HUMANITY: NEW SKILLS FOR THE DIGITAL AGE
This in-person program features diagnostic assessments, coaching sessions and leadership reflections to help you lead collaboratively with your team and foster a culture of transparency and trust. It counts toward the Certificate in Leadership.
Program faculty include Professors Andy Wicks, Greg Fairchild and Laura Morgan Roberts.
DIGITAL MARKETING INNOVATION
In this six-week live virtual program led by digital marketing and analytics expert Professor Raj Venkatesan, learn how to develop an effective digital marketing strategy using AI, machine learning and digital transformation to gain competitive advantage.
LEARN MORE AND SIGN UP AT: www.darden.virginia.edu/ee-fall21
COVID-19 VACCINES: A TECHNOLOGY BREAKTHROUGH, AN ETHICAL DISTRIBUTION CHALLENGE
The world celebrated in late 2020 and early 2021 as one COVID-19 vaccine after the next successfully passed final testing milestones to earn approval and begin the process of ending the pandemic.
However, creating them was just the beginning. Distributing them globally — and ethically — to people from all walks of life has proven to be a massive hurdle, highlighting wellknown disparities between rich and poor nations and privileged and underserved communities.
Professor Vivian Riefberg, a board member of Johns Hopkins Medicine, has been a leading voice championing distribution and access to COVID-19 vaccines that will unlock their full value for society by ending the pandemic. USA Today named Riefberg to a panel of experts to provide ongoing updates and analysis on vaccine progress.
In January and February articles surveying the experts, Riefberg advised the Biden administration to enlist as many approaches to vaccination as possible: mass distribution centers, community health facilities, physicians' offices, pharmacies, schools. She advocated for arranging for vaccinators and vaccination sites, providing reservation systems both by phone and online, and programs to help people overcome vaccine hesitancy.
In the March update, Riefberg focused on the need to vaccinate children, too, if vaccines are expected to help reach herd immunity in the United States. And as a successful early vaccine rollout began to slow in April, Riefberg addressed growing concerns about vaccine hesitancy.
“Ultimately, the real carrot is watching vaccinated people get back to their normal lives,” Riefberg said, “and the real stick might unfortunately be with continued sickness and unnecessary death.” “If deployed without understanding the psychology of how those technologies might affect people, they might actually lead to more problems than good. It’s almost always the case that people don’t have a good idea about what data is being collected about them, how it’s being used or how it might be used against them.”
— PROFESSOR ROSHNI RAVEENDHRAN
organization,” she says. On a broader level, she sees a similar phenomenon in wearable devices such as Fitbit or smart home device Nest — both recently acquired by Google — which collect sensitive personal data of users. “They tell Google how much we walk, how we sleep, how we eat — a lot of personal things companies never had access to before,” Raveendhran says. Privacy concerns spurred some consumers to stop using the devices after the Google acquisitions. “We are expecting companies to behave in a responsible manner, and many times they do, but many times they don’t.”
Much like being transparent with employees regarding work-tracking data, she recommends companies empower consumers by being clear with them about how their data will be used — and letting them make up their own minds about whether the trade-off is worth it. “Those five-page privacy notices nobody ever reads are almost a deterrent to know more. Give the power to people by explaining in plain language what will happen to their data,” she says. “Then at least you know you have their consent in an open and honest manner.”
Theranos: A Case Study at the Intersection of Tech, Ethics and Leadership
Transparency of a different sort was at issue in a recent case study Harris wrote about the company Theranos, a startup run by Silicon Valley wunderkind Elizabeth Holmes that promised to revolutionize blood testing, performing more than 200 different tests ranging from cholesterol level reports to complex genetic analysis on a single drop. The only problem was the technology didn’t work; Holmes faces trial for fraud.
“It’s an example of how the nature of technology itself can make it difficult for funders or board members to verify the science,” says Harris, author of the case Out for Blood: Tyler Shultz and Theranos, available from Darden Business Publishing. “But there was a lot of hoopla with Holmes on the cover of Fortune in a black turtleneck. Technology we don’t understand takes on a magical quality, and people simply want to believe in it.”
In the case of Theranos, the very complexity of the technology allowed Holmes to carry on the charade for years, as the company kept racking up funding. “If we can’t peek inside this black box, or if we don’t have the technical expertise to verify what’s really going on, people often simply assume that everything must be legitimate. In addition to all the other ethical
challenges introduced by technology, the complexity itself creates the opportunity to pull the wool over everybody’s eyes,” says Harris, who tells the story through Tyler Shultz, a scientist-turned-whistleblower who eventually exposed the company. The case explores the challenges Shultz, who worked with Harris and his collaborators on it, faced in getting out the word in a world in which many of the scientists knew the technology was bogus but feared speaking out due to reprisals, while many of the “suits” and investors were clueless.
“You see the challenge someone like Tyler has in getting the ethical issue exposed, given all the forces rallied against him,” Harris says. “It’s a cautionary tale of how much can go wrong if someone is willing to push the fraud forward.” Snake oil salesmen promising illusory benefits are nothing new, but in this case, he says, the “technology creates these ethical problems that allow the salesman to sell the snake oil a little easier.”
Theranos represents an extreme side of Silicon Valley, but the competitive landscape can often push companies to cut ethical corners in their race to market. Such haste is short-sighted, however, says Freeman. “This story that it’s a dog-eat-dog competitive world and we’ve got to move fast is just BS,” says Freeman. “The world waits just fine for good stuff.”
Rather than rushing a product to market, Parmar stresses the importance of learning everything one can before launching. “You have to learn about the impacts on stakeholders, and empathize with them,” he says. “Only then can you have the confidence to take risks.”
That empathy, adds Freeman, develops the best product in the long run. “Stakeholders are human beings. They have children, they have pets, they hurt, they love,” he says. “We need to understand our full humanity here. And if we do, by the way, there are a lot more business opportunities to be had.
DARDEN NETWORK-LED TECH PLATFORMS POWER PURPOSE TO IMPROVE THE WORLD
It’s often said that technology is not good or bad, it’s what people decide to do with technology. Sid Pailla (MBA ’15) and Whit Hunter (Class of 2022) are using technology in the form of online platforms to power laudable goals — promoting financial inclusivity for American workers and fundraising for nonprofits. Sunny Day Fund BetterWorld
While at Darden, Pailla founded Sunny Day Fund, a platform for emergency and personal savings to be provided to workers as an employment benefit. Employees receive an FDIC-insured account they can use to save for emergencies or planned expenses, while matched contributions from their employers provide a better return compared to a traditional savings account.
The employee receives support to build up liquid assets and lessen financial stress, which in turn boosts productivity. In contrast to a 401(k), there is no paperwork and no penalty to make withdrawals from a Sunny Day Fund account. Meanwhile, the employer can use this unconventional benefit to attract and keep talent during a time when voluntary turnover is on the rise in America.
Sunny Day Fund was accepted to Lighthouse Labs, a Richmondbased startup accelerator, providing momentum as Pailla attempts to disrupt the $28-trillion-dollar retirement savings industry, which has decades of marketing and cultural cachet in its favor. Referring to the insight he gained during his Ph.D. in systems engineering, Pailla emphasizes purpose-driven disruption: “When we think about disruption, we’re mostly focused on the ‘how’ — but the necessary aspect to how we do something is the goal we want to achieve.”
For Pailla, that goal is inclusivity. In the middle of his First Year at Darden, Hunter was trying to figure out whether to continue to invest the time and effort into making BetterWorld into a viable business. Instead of throwing in the towel, he and his co-founders decided to make a fundamental change in January 2020 that paved the way for a significant turnaround in fortunes: They made the site’s offering free.
The result? “We’ve seen over 100 percent monthly growth every month for the last year,” Hunter said a year after that crucial decision. “Since last spring, over 16,000 organizations and nearly 100,000 individuals have signed up to use BetterWorld’s free suite of fundraising tools.”
The existing charitable-giving market is filled with antiquated, expensive technology, Hunter said, particularly for smaller organizations. Furthermore, these software providers often take a significant cut of donations as their fee. BetterWorld offers individuals and nonprofits a full suite of fundraising tools, free of charge and easy to use, through which organizations can keep 100 percent of the funds raised.
The venture began as an auction platform to serve nonprofits holding fundraisers and eventually began adding capabilities such as ticketing, a donation portal and crowdfunding tools, among others, as the founders began to learn more about their audience and a potential path forward.
20 THE DARDEN REPORT
lobal protests after the killing of George Floyd in May 2020 sparked a surge in calls for racial justice and equity, led and intensified by the Black Lives Matter movement. Many businesses responded by making public commitments to numerous dimensions of diversity, including race and ethnicity, gender balance, all forms of sexual orientation, disability and age.
Many institutions view diversity as a moral imperative. As the evidence builds that diversity also boosts performance, managers face a paradox: While varied perspectives add value, they often cause friction. So it takes enlightened leadership — with high emotional intelligence, compassion and humility — to motivate, integrate and coordinate teams, according to a pair of Darden professors with expertise in building high-performing teams that maximize the benefits of diversity.
“Diversity enhances work output, but people often report having a less positive experience in diverse teams because of conflict,” says Professor Laura Morgan Roberts, noting this can lower motivation and productivity and increase employee turnover.
Her research focuses on the science of maximizing human potential in diverse organizations. She says it’s not as simple as recruiting at random as many people with different perspectives and backgrounds as possible. Building diverse teams requires more intentionality.
Identify Existing Inequalities and Address Them
Teams need a critical mass of minority perspectives for mixed teams to outperform. “Leaders need clarity over what dimensions of diversity are meaningful and significant for their organization,” Roberts says. “I’m a Black woman, a business professor and a psychologist. These overlapping factors shape my perspectives and how I contribute to my organization.”
— Professor Laura Morgan Roberts
Roberts
Diversity Is More Nuanced Than Protected Characteristics Such as Gender or Race
Managers often struggle to gauge diversity accurately, Roberts says, including how different aspects of difference combine to shape individual identity. “For example, I’m a Black woman, a business professor and a psychologist. These overlapping factors shape my perspectives and how I contribute to my organization.”
Companies That Select Teams Based on One Characteristic Risk Claims of Tokenism
Professor Lynn Isabella urges companies to look beyond simplistic definitions of diversity to unearth hidden talents. “It’s often the person that you never expect who has something unique to offer the team,” she says, stressing the importance of looking for cognitive differences, not just tangible diversity. When businesses hire based on a single, tangible element of diversity, Roberts says “people won’t feel they can bring their whole selves to work. They won’t feel welcome or that their contributions are valued.”
Conflict Is Inevitable but It Can Improve Performance
“Many of us go into a team and do the same thing we’ve always done,” Isabella says. “But a diverse team gives you the space and freedom to try something different, learn a new skill, take on a new challenge and grow.”
Isabella recommends looking for people who want to collaborate, even if it means sacrificing a strong performer for the good of the wider team. The tendency is for team leaders to choose proven performers because of time pressures, but that often rules out diverse talent because minorities may have less opportunity to showcase their talents, she adds. Instead, team leaders need to take chances on newcomers to achieve a broader representation and superior results.
Diverse Teams Outperform the Less Diverse in Many (Not All) Circumstances
Indeed, Roberts says research has proven that mixed teams outperform in many circumstances, for example when they need to tap similarly diverse consumer markets, perform collective problem-solving or catalyze innovation.
That said, diverse teams do not always work better than homogenous groups. Studies show that teams from similar backgrounds outperform at executing existing solutions, Roberts says.
Managers Can Stifle the Benefits of Diverse Teams
The innovative ideas of diverse teams can be stifled by decision-makers higher up the company, where diversity tends to taper off. Indeed, many companies focus too heavily on recruiting diverse talent and not enough on inclusion and leadership development, says Roberts. This often leads to minorities who do not speak out on teams.
“You need to create a context in which people from diverse backgrounds can grow, thrive and contribute,” she says, including by rooting out unconscious bias and championing mentorship.
Above All, Managers Must Look Within
Roberts notes that managers often shy away from conflict and can become defensive. “They may recognize the value of diversity, but they also struggle with being in environments where people are questioning their decisions.”
Managing mixed teams therefore requires humility, she says. “We must acknowledge and admit our way is not the only or the best way. Even if something works really well for us, that doesn’t mean it’s going to work equally well for others,” Roberts says. The best leaders are curious, too, and take a genuine interest in their employees. “It’s so important in diverse organizations that people keep learning.” It may not be easy, but selfreflection, nurturing curiosity and humility, taking a broader view of diversity, aligning teams with the right tasks, and addressing wider inequalities are well worth doing, says Isabella. “That doesn’t mean the team will be plain sailing. There will be bumps along the road, but the potential for an incredible result at the end is huge.”
Isabella
BOOSTED BY AIRBNB, THOMAS-HUNT RETURNS TO DARDEN TO LEAD NEW RESEARCH INITIATIVE
Darden welcomes a familiar face back to the faculty this summer as Melissa Thomas-Hunt, a professor, senior associate dean and global chief diversity officer at the School until 2017, returns for a joint appointment at Darden and UVA’s Batten School of Leadership and Public Policy.
Thomas-Hunt returns to Darden from Airbnb, where she served as global head of diversity and belonging and led strategy and execution of global internal diversity, inclusion, equity and belonging programs for the company’s 5,000 employees.
She’s not leaving Airbnb behind, though, and she’s bringing benefits from her experience there back to Darden. The company in May announced it will donate $1 million over the next five years to establish the Airbnb Melissa Christian Thomas Hunt Research Fund for Global Connection and Belonging at Darden.
“At a time of mass isolation, with physical communities eroding all around us, this work is more important than ever,” Airbnb Co-founder and CEO Brian Chesky said in a letter published by the company. “This commitment will ensure that our work together continues for many years to come. So this isn’t goodbye, it’s thank you. Thank you, MTH, for all that you’ve given to Airbnb.”
The fund will support academic research in the areas of diversity, equity, inclusion, connection and belonging. Thomas-Hunt will lead the research effort and continue to serve Airbnb as a senior adviser. In addition, she will serve as a special adviser to Darden Dean Scott Beardsley and Batten Dean Ian Solomon.
“We at Darden are incredibly grateful to Airbnb for its commitment to advance knowledge in this critical area and its strong support of Melissa as she transitions back to Darden,” said Beardsley. “Airbnb’s generous gift is a building block for Darden’s aspiration to create a new Initiative for Inclusive Leadership, Equity and Leveraging Difference that aims to serve as a hub for academic scholarship, pedagogical innovation and applied social action.”
Melissa Thomas-Hunt
While unemployment ballooned and the global economy collapsed in the months following the onset of the COVID-19 pandemic, an odd thing happened: Wall Street surged. The stock market rose to record levels, relatively new asset classes such as cryptocurrencies headed to the moon, and individual investors had hedge fund managers reeling.
There’s been a lot going on in the world of investing, and some of the change likely is here to stay.
FED FUELS WALL STREET RALLY
A year after government lockdowns sent the U.S. into an economic tailspin, the economy still hadn’t fully recovered to its prepandemic level. Contrast that with the stock market, which smashed record after record over the same period. That dichotomy will no doubt have some people puzzled, but it shouldn’t.
The economy and the stock market aren’t synonymous. They can, and frequently do, behave in different ways. “The stock market is not an indicator of the economy as a whole, but rather of the health of public companies,” says Professor Elena Loutskina. “The companies that were able to invest in tech won the market.” Small and medium-sized retailers, however, saw a lot of financial pain.
Another significant factor helping lift stocks was the ultra-low borrowing costs that came as a result of a sharp change in policy by the U.S. Federal Reserve. Not only did the Fed cut shortterm borrowing costs to near zero, it also pumped the banking system full of cash by purchasing hundreds of billions of dollars of bonds. Ultimately, that helped big business.
THE CHEAP MONEY EFFECT AND THE GAMIFICATION OF INVESTING
Cheap money rarely comes without some unexpected consequences. In this case, it seems to have given rise to what some people would call the “Robinhood-GameStop effect.”
In early 2021, a group of individual — or retail — investors, who largely invested using online broker Robinhood, coordinated via social media
platforms like Reddit to buy stock in beleaguered video game retailer GameStop. When the stock price rallied, hedge funds, which had bet on the stock price falling, suffered severe losses. Bizarrely, barely anyone thought GameStop had a viable future, yet the rally was real enough to wipe away billions of dollars in Wall Street profits. So how did it happen?
It comes down to the availability of cheap money, says Rodney Sullivan, executive director of the Richard A. Mayo Center for Asset Management.
“The low cost of capital is driving a technological boom,” he says. On Wall Street, a slew of capital investment is squeezing the cost of investing more each year. For a long time, there has been downward pressure on trading costs going back to the founding of investment company Vanguard, which introduced low-cost mutual fund investing in the 1970s. Now, many brokers offer zero or near-zero cost trading to their customers. And in general, that phenomenon has been a good thing for investors, at least until the pandemic.
Zero-cost investing has led to what Sullivan calls the “gamification” of investing.
“Some people think of it as a game, and they are investing based on a hunch or what a friend says,” he says. That’s quite different from traditional investing, which involves the longterm process of extracting potential gains from the market.
Sullivan worries that low costs will lure individuals into frequent trading, and ultimately, some naïve investors will see some painful losses. “Gamification is changing investing. It is here to stay, and it’s dangerous,” he says.
BLOCKCHAIN GOES BEYOND BITCOIN, UNLEASHES NFTS
Low capital costs have also helped usher in the rise of cryptocurrencies, such as Bitcoin. Through mid-April, Bitcoin prices had grown to $60,000, up from less than $7,000 a year earlier. Low-interest rates drove at least part of that rally as investors sought alternative investments to cash. But the abundance of new technology in the form of electronic trading systems has also helped boost cryptocurrencies and similar assets.
“Would we have crypto if we didn’t have technology? Probably not,” Sullivan says. All cryptos rely on technology for their existence, and they need it to be traded.
Likewise, nonfungible tokens (NFTs) use blockchain technology, just like Bitcoin and other emerging cryptocurrencies. The encryption provided by the blockchain means that people cannot replicate these discrete, individually identifiable electronic items: One NFT isn’t the same as another NFT. That makes them different from cryptocurrencies, which are interchangeable (fungible), one for another.
And they can get sold for large sums.
The New York Times columnist Kevin Roose turned an electronic copy of his column about the rise of NFTs (“Buy This Column on the Blockchain!”) into an NFT and sold it for $560,000. The proceeds later were donated to charity, according to the columnist.
Christie’s auctioned an NFT for the first time in March, a digital photo collage by the artist known as Beeple that sold to the tune of $69 million. NFT-focused startup Dapper Labs raised $305 million from a host of celebrities ranging from basketball great Michael Jordan to actor Will Smith, valuing the company at $2.6 billion, after Dapper’s NBA Top Shot platform made waves with $500 million in sales of collectible “moments” — short video clips of NBA player highlights. Just as technology has upended the way we use banks, it appears that it may change the way we invest in unique items such as art and sports collectibles. In other words, NFTs may be the start of something big.
— Richard A. Mayo Center for Asset
Management Executive Director
Rodney Sullivan
SPACS ARE BACK
Another phenomenon from the last year was the resurgence in the use of so-called special purpose acquisition companies (SPACs). These public companies raise money for unspecified future acquisitions of private companies. It’s a form of regulatory arbitrage, as it helps companies that want to go public avoid bureaucracy.
“SPACs are easier to get ramped up than an IPO,” says Professor Rich Evans.
Again, the low costs of borrowing combined with huge corporate stashes are the driving force behind SPACs. Vast volumes of cash now languish in corporate bank accounts, and the people charged with looking after that money want to find a better return than the zero percent that most deposit accounts offer. That situation makes SPACs attractive to investors.
It is also notable that the last time SPACs became investor darlings was in 2007, Evans says.
That was near the end of the housing bubble, close to the top of the market, and was followed by a bear market. “I see the SPACs spike here as something close to an indicator of a market top,” he says. “We know that excessive IPO activity is an indicator of poor future returns.” That thinking gets even more
credence now that professional athletes have also started to get into the SPAC business, often a sign of bad things to come.
ESG INVESTING FINALLY TAKES CENTER STAGE
For years, investors have paid lip service to the principles of improved company performance regarding environmental, social and governance (ESG) matters. Now, those matters are being brought to the forefront by investors and governments alike.
The Securities and Exchange Commission will now require detailed reporting on such matters, says Professor Pedro Matos. “The onus is now on the companies to expand on what they report,” he says. The largest investment companies, BlackRock, Vanguard and State Street, have all committed to using their influence with corporations to get companies to disclose information and operate as a positive force for society. In the future, investors will need to understand a new set of metrics that help gauge which companies are performing well in their ESG efforts and which are not. “There will be challenges about what these new data mean,” Matos says. In turn, that will require savvy investors to go well beyond reviewing balance sheets and income statements.
KA ‘K-SHAPED’ ECONOMIC RECOVERY: WHAT IS IT AND WHY DOES IT MATTER? By Simon Constable The COVID-19 pandemic has had such an extraordinary impact on the U.S. economy that it gave birth to a new phrase to describe what economists are seeing: the “K-shaped recovery.” Even those who have detailed knowledge of the economy may have found this novel terminology confusing. Here’s what you standstill. During the depths of the slump, annualized production of U.S. cars and light trucks was barely above zero, according to data from Trading Economics. It still hasn’t bounced back to prepandemic levels. Similarly, U.S. oil consumption cratered to its lowest level since 1995, need to know about the term and why it matters. “The pandemic recession was quite different from a normal recession,” says Professor Dan Murphy. Following most recessions, the economy tracks a V-shaped pattern. Put another way, there is faster than average growth as the economy rebounds after a sharp slowdown. Federal Reserve data shows the economy followed that track after U.S. recessions in 1991, 2001 and 2009. But that didn’t occur in the same way last year. “Some industries got hit harder than others,” Murphy says. Some even prospered. Rather like the letter K, there was a downward-sloping part of the economy and an upward-sloping part. The opening line in Charles Dickens’ famous novel A Tale of Two Cities seems as appropriate currently as it did in the 19th century: “It was the best of times, it was the worst of times.” The Best of Times, the Worst of Times Despite the pandemic, some parts of the economy boomed in 2020, in particular the technology sector. “Firms had to think about new ways to do things, and a lot of those things involved adapting new technologies,” Murphy says. Amazon saw its profits surge to record levels as consumers switched to buying more online rather than at physical retail outlets. Demand for video conferencing services such as Zoom skyrocketed as people were forced to work from home. Delivery service companies prospered as in-store shopping became challenging. Parts of the housing market boomed as people fled densely populated urban areas in favor of smaller towns and suburban locales. Meanwhile, some sectors of the economy were brought to a according to the U.S. Energy Information Administration. Demand for oil remains lower than before the crisis began. Restaurant and food service businesses were more or less shut down and shed millions of workers, with many smaller establishments expected never to reopen, experts say. This economic bifurcation led to distinctly different employment outcomes, says Professor Kinda Hachem, with those fortunate enough to work at home faring relatively well and workers who couldn't work away from designated workplaces such as factories or restaurants facing significant reduced work. Did the Government Step Up? The tale of two economies has led some to wonder whether the government provided the right help to the economy during the crisis. Large-scale direct payments to individuals and help for companies were appropriate steps, according to Hachem. “Fiscal policy is still the right tool because it’s more effective in redistributing resources,” she says. For the Federal Reserve, fixing the lack of jobs for those on the struggling leg of the K-shaped recovery will take priority over inflation. “The Fed will be willing to tolerate higher inflation to allow employment to improve across the board,” Hachem says. There’s another longer-term ethical worry related to this K-shaped recovery. The pandemic’s impact on the economy may have resulted in making some jobs obsolete, Murphy says. That’s always how technology innovation works: Some jobs die but some new ones get created. “To what extent the gains outstrip the losses remains to be seen,” he says.
