Perspectives Spring 2015 by Gies College of Business

COLLEGE OF BUSINESS

Perspectives U N I V E R S I T Y O F I L L I N O I S AT U R B A N A- C H A M PA I G N

SPRING 2015

LEARNING THROUGH A NEW LENS

College of Business I University of Illinois at Urbana-Champaign

s we mark the College’s Centennial with celebrations across the country, we’ve reached out to alumni and asked them this question: What do you think business education is going to look like in the next 100 years? While no one has a crystal ball, many echo the sentiments of one of our alumni who told me that the driving force will be technology—some of which hasn’t even been thought of yet, never mind developed. He predicts delivery systems will be different for business education, which will make quality content even that much more important. Our College has always delivered quality content in the classroom, and we are poised to do the same online. You can read about our expanded efforts in reaching learners all over the world on page 10. Through online initiatives, more learners will become familiar with our engaging and cutting-edge content and our exceptional faculty. And that enhances the visibility and reputation of the College. As we begin our second century, that commitment to innovative teaching and delivery will continue to make our College an environment of excellence. Sincerely,

Larry DeBrock Josef and Margot Lakonishok Endowed Dean

Thank you for your great article recognizing the influence and accomplishments of Professor Art Wyatt. While the article focused mainly on his faculty affiliations at Illinois and his professional influence at Arthur Andersen and internationally, I was one of the hundreds, if not thousands, of students on whom he had a profound influence. Art always treated me and others not as struggling students, but as budding professionals who were going to enjoy success. He followed the second part of the old adage “treat people as you want them to become.” His influence on the individual lives of his students has been deep and long lasting. rick keyser ’63, ’64 Art Wyatt was one of the finest instructors I ever had and also a genuinely nice guy. I strongly believe I owe my business success to him and other people at UI. For an accounting student, it was an amazing place to be and to associate with people who were truly giants in the accounting profession. ron Jeffris ’61, ’62 I was one of the lucky ones. I had Art for Accounting 101 in the fall of 1951. That was a great way to start my accounting major. Back in the day when a full semester’s tuition was $70, it was the greatest bargain of all time. Later, I had Art for two more accounting courses as well as many of the other “greats” discussed in your article. I particularly remember Don Skadden who was also my adviser. In a galaxy of stars, Art and Don shone the brightest. Bruce struckman ’55

QualiTy sTories Have read every line of every article in the last two or three issues of Perspectives. Terrific reports on newsworthy subjects. Now I'm sorry I missed a few classes when I was in school. Wendell Doolittle ’56

MANAGING EDITOR Mary Kay Dailey EDITOR Cathy Lockman CONTRIBUTING WRITERS Tom Hanlon Cathy Lockman Doug McInnis

COLLEGE OF BUSINESS

Perspectives 2

health Care on a silver Platter? Can concierge medicine deliver beneﬁts to patients and doctors?

lights, Camera, action

The Time is ripe for Change

a look Back

Thinking outside the Box

Meter Made

Online learning steps into the spotlight.

The history of Chiquita Brands illustrates how the global economy is shifting.

Faculty share their reﬂections on ﬁnance education at Illinois.

Technology & Management students take on the challenge of an international business competition.

Alumni entrepreneur hits parking solutions out of the park.

PHOTOGRAPHERS Tricia Koning Thompson • McClellan Photography

SHORT TAKES

PROOFREADER Cristy Gillespie DESIGNER Pat Mayer

Perspectives has been named a Circle of Excellence Bronze Award winner by the Council for Advancement and Support of Education and an Award of Excellence winner by the University & College Designers Association.

Taking Our Qs

60-Second Proﬁle

Reality Check

The Main Event

The Reason Why

Parting Shot

www.business.illinois.edu

on The Cover Professor heitor almeida uses the studio in Bif to create video lectures that are part of the College’s innovative delivery of blended and online learning initiatives.

DEAN Larry DeBrock

SPRING 2015

[ YOUR] PERSPECTIVE

Thanks for Work of “arT”

[ CONTENTS ]

[ MY ] PERSPECTIVE

We welcome your perspective, too. Send your comments or suggestions for future articles to our managing editor, Mary Kay Dailey, at mkdailey@illinois.edu.

CELEBRATING OUR PAST. CREATING OUR FUTURE.

The University of Illinois at Urbana-Champaign is an equal opportunity, affirmative action institution. Printed on recycled paper with soybean ink.

[ TRENDING ]

Health care on a silver platter?

he United States has the most expensive medical system in the world—one that gobbles $1 of every $5 Americans spend. Yet Americans can wait weeks to see a primary care doctor, and when they do get in the appointment may last just 15 minutes or less.

Many patients are dissatisﬁed. Many doctors are miserable. Now thousands of doctors and hundreds of thousands of patients have bolted the traditional medical format for concierge care. Concierge medicine allows patients to pay substantial annual retainers to get quick and unlimited

“I can’t think of any other service where you call for an appointment and they say, ‘We’ll see you in two or three months.’” Joe Nolan

business.illinois.edu

College of Business I University of Illinois at Urbana-Champaign

l, MD chaffe S y r a G

Micha el Bish op, M D

WHY

At age 16, Gary Schaffel got a job sterilizing instruments at a local hospital. It was his first exposure to medicine, and it convinced him that he wanted more than anything else to become a doctor. But just 10 years into his career as an internal medicine specialist, he was overcome by the pervasive unhappiness that is driving many of his peers to quit the profession. “You go into a specialty like internal medicine because of the patient relationship,” says Schaffel ’89 LAS, MS ’90 AHS, MD ’94. “You want them to feel that if they have a problem, they have a friendly face in the medical system to talk to.” But Schaffel couldn’t do that in his suburban Chicago practice. To make ends meet, he had to see so many patients that he spent his days rushing from waiting room to waiting room. He had enough time to deal with the problem at hand but little time to offer an empathetic ear or preventive advice. “I had 3,000 patients,” he says. “Most of the time, you’re just plugging your finger in the dike.” And it was getting worse. With rising costs and falling reimbursements, the economics just weren’t making sense. Schaffel had three choices—quit, take on still more patients, or shift to a different kind of practice. “Being a doctor is who I am,” he says, so quitting wasn’t an option. Still, he knew he couldn’t stay on the treadmill either. It was impacting his relationships with his family, his patients, and his staff. “I was suffering pretty intense burnout,” he recalls. Eight years ago, he opted for concierge medicine and watched many of these problems melt away. In his concierge practice, he has just 500 patients. Today, his income is up, though he says money was never the driving factor behind the change. “I’m operating in a more stress-free environment. I can work through a longer list of medical issues with my patients and take the time to give them a very high-quality explanation of what’s going on. And I can nip a problem before it gets out of hand, again taking the time to offer guidance on disease prevention. Patients can’t believe that we are going out of the way to give them the level of service that we do. But we do it because we enjoy it and it’s the right way to practice. That’s why I went into medicine.”

That model of responsiveness is getting patients’ attention. “Concierge medicine is growing fairly quickly,” says Nolan, adding that Beverly Capital would like to invest in the ﬁeld. “With the aging of the population, people are much more health conscious. But the traditional system isn’t responsive to the needs of consumers. I can’t think of any other service where you call for an appointment and they say, ‘We’ll see you in two or three months.’”

CosT ConCerns Critics of the concierge medicine model say it creates a type of two-tier medical system—one for most of us and one for those who can afford something better. But this is to be expected. “Almost every market out there has differentiated products based on the ability to pay,” says Jeffrey Brown, William G. Karnes Professor of Finance and director of the Center for Business and Public Policy.

“[A lot of doctors are] unhappy because they cannot practice medicine the way they want to. Concierge medicine may keep them from leaving and may attract others to enter the profession.” Jeffrey Brown access to their doctors. In return, concierge doctors make a better living with fewer patients and can practice medicine the way they had always hoped. (Concierge patients still need medical insurance to pay for specialists, hospitalization, surgery, and other major medical expenses.) “People are saying they will pay doctors extra if they can have rapid access to a physician,” says Joe

Nolan ’86 ACCY, founder and managing director of Beverly Capital LLC, a suburban Chicago company that invests in health care and other ﬁelds. Nolan himself has turned to concierge medicine for better service. “I could get an appointment within 24 hours,” he says. “And at the end of regular checkups, we would spend half an hour talking about preventive measures.”

“If you have a question about having a weird reaction to a medicine, it’s faster and more convenient to handle it on the phone. Under the fee-for-service model, the doctor can’t get paid for that by the insurance companies.” Julian Reif

4 business.illinois.edu

WHY NOT

Michael Bishop ’86 MD, ’86 MBA had ample reason to switch to concierge medicine. He was seeing 40 patients a day. Costs were rising, but revenues falling. And then two years ago, he underwent a kidney transplant. All these factors caused him to assess his practice model. “I considered concierge medicine, but I chose not to,” says Bishop. Instead, he opted to sell his successful practice to Texas Children’s Pediatrics, the largest single-specialty pediatric group in Texas, and become an employee again. The move eliminated some of the timeconsuming administrative responsibilities, while still allowing Bishop to continue to care for his existing patients and families and to maintain the same general practice model and income level. Two factors drove his decision. “The average concierge doctor charges $2,000 a year. Many people who have young families cannot come up with that kind of coin,” says Bishop. And if he had made the switch, he would have had to send most of his patients elsewhere. “I felt I owed it to the community to stay with my existing practice. Plus, I love my patients.” That feeling is mutual. When Bishop went into renal failure, the mother of three of his patients donated the replacement kidney. A less-important but still practical consideration is that the concierge model may not fit pediatrics as well as it does internal medicine or family practices, Bishop says. A typical concierge practice may retain its patients for many decades. A pediatric practice goes through constant turnover as kids become adults. “At best, they’re with you 19 or 20 years,” Bishop says. In the long run, concierge doctors may run into problems that could hamstring their practices, Bishop adds. For instance, hospitals may decide to deny admitting privileges to concierge practices because they aren’t big enough to be important to them. And at some point, he predicts, the federal government is going to get involved, implementing regulations or paperwork requirements that could undermine concierge medicine. “Concierge medicine is a nice short-term answer,” he says. “In the long term, I can see it getting squeezed by the federal government.” But for now, Bishop understands why some patients want concierge service. And he understands why doctors are opting to make the switch. “They’re unhappy about a bunch of things—the falling reimbursements, the increased workloads to make ends meet, the intrusion of insurance companies into their practice. I would not fault somebody for trying it.” But Bishop has found ways to live with the problems, so he’s standing pat. “I’m still making a good living,” he says. “And I’m doing something I really love.”

College of Business I University of Illinois at Urbana-Champaign

So some of us sit in the box seats at the baseball game while others occupy the bleachers. But concierge medicine may prove to be a format that could help transform medicine for the masses by pointing the way to more efficient, less costly, and ultimately better health care. Currently, most Americans get fee-for-service care. Doctors get paid, for example, for diagnosing a sore throat. The more people they see, the more money they make to cover salaries, rising office costs, and often huge medical school loans. For that reason, front-line doctors may have thousands of patients. But the fee-for-service model won’t pay doctors for taking time to offer preventive advice that might keep patients healthier in the long run. “The insurance company won’t pay a doctor extra for spending 30 minutes with a patient instead of 15,” says Julian Reif, assistant professor of finance. Nor does the fee-for-service model allow doctors to operate efficiently. For instance, many problems could be handled quickly and cheaply through short phone consultations. “If you have a question about having a weird reaction to a medicine, it’s faster and more convenient to handle it on the phone,” says Reif. “Under the feefor-service model, the doctor can’t get paid for that by the insurance companies. So the patient would

business.illinois.edu

an ounCe of PrevenTion

“All the time people spend in waiting rooms—that’s not factored into health care costs.” David Molitor

have to come in, with all the attendant paperwork.” And when you do get in, there’s something else to contend with. “This type of approach adds to already overcrowded waiting rooms,” says David Molitor, assistant professor of ﬁnance. “Concierge doctors, by contrast, get paid ﬂat fees to do what’s necessary. If they want to handle a question by phone, they can.” For particularly busy Americans, the ability to get a doctor on the

phone or see a doctor quickly without long stays in crowded waiting rooms more than justiﬁes the cost of concierge care. “All the time people spend in waiting rooms—that’s not factored into health care costs,” says Molitor. But the big payoﬀ from concierge medicine may come from preventive care. “The whole point of concierge medicine is to provide the care you don’t get with your typical insurance company physician,” says Molitor.

Preventive care pays off big if it heads off a costly visit to the ER or keeps pre-diabetic patients from developing preventable Type 2 diabetes. The annual national medical cost of diabetes cases, most of them Type 2, totaled $176 billion in 2012, according to the most recent tally by the American Diabetes Association. But the bill could get much worse. Today, some 26 million Americans have the disease, but another 79 million are pre-diabetic. Each additional diabetic diagnosis costs the medical system an average of just under $8,000 a year, the association says. This is an area where concierge care’s emphasis on prevention could help. So far, concierge medicine has been largely limited to those who can afford it. But that may change thanks to a large-scale experiment underway in Seattle by a 17-year-old primary and preventive care provider called Qliance. Qliance offers concierge care for the masses. The company operates on a simple idea— spending extra money up front on preventive care can substantially reduce per-capita expenditures for health care now paid by corporate and government health plans. Qliance currently serves 35,000 patients. Corporations such as Comcast and Expedia have signed on, as has the heath care plan for unionized Seattle firefighters. But in an

unusual twist, the federal government signed up 15,000 Medicaid recipients. Now Qliance says it has the data to show an ounce of prevention is indeed worth a pound of cure. Qliance says overall health costs for its patients are nearly 20 percent lower than non-Qliance patients. The company’s success has begun to attract outside investors, Amazon.com founder Jeﬀ Bezos and computer pioneer Michael Dell among them. But to make this system work on a large scale, the country needs many more primary care doctors. Right now there’s a shortage, and the shift to concierge medicine is making it worse—at least in the short term. When doctors switch to the concierge model, many of their existing patients who choose not to pay the concierge fee leave the practice and end up in the oﬃces of other overworked doctors. In the long run, though, concierge medicine may help resolve the shortage. “There are a lot of unhappy doctors out there,” says Brown. “They’re unhappy because they cannot practice medicine the way they want to. Concierge medicine may keep them from leaving and may attract others to enter the profession.” Doug McInnis

•

Sources: Time, Concierge Medicine Today, Qliance.com, and Forbes.

GooD for PaTienTs anD GooD for Business? Does decreased wait time, increased access, and more time dedicated to preventive care beneﬁt more than the patient? Seattle-based Qliance, a primary care provider that uses the concierge model, argues that it could. How? By possibly lowering costs for insurers and employers and creating eﬃciencies for hospitals and specialized services. Qliance reports it has lowered annual overall health care costs for its patients by nearly 20 percent compared to non-Qliance patients. The savings per patient after deducting Qliance fees were $679, based on comparisons per 1,000 patients in each group. Here’s where they say the savings occurred:

Inpatient hospitalization days were

Advanced radiology use was

Emergency room visits were

Specialist visits were

percent lower.

Source: January 15, 2015 Qliance press release.

College of Business I University of Illinois at Urbana-Champaign

[LEADERSHIP]

TAKING OUR Qs name: Amy Weintraub Current position: Head of Change Management for The PrivateBank and Trust Company, Chicago Previous position: Head of Strategic Project Management and Facilities Management for The PrivateBank and Trust Company, Chicago university of illinois degree: BS in finance 1999 The PrivateBank opened its first office at 10 N. Dearborn in Chicago in 1991 and began trading on NASDAQ in 1999, the year Amy Weintraub earned her finance degree from the University of Illinois. Sixteen years later, Amy is the head of change management for the bank, a position she has held since 2012. Here, she takes our questions about leadership, her career path, and her vision for success.

business.illinois.edu

What are your responsibilities as head of change management for The PrivateBank? Weintraub: Managing a team of experienced professionals who work on enterprise-wide initiatives for the bank and overseeing the general portfolio of those initiatives are my main responsibilities. I facilitate monthly executive steering committee meetings, lead stakeholder meetings, oversee project budgets, and ensure we are communicating eﬀectively throughout the bank.

What professional or personal experiences most prepared you for this current position? Weintraub: My prior banking experience helped me get where I am today. Over the course of my career, I have worked in diverse areas of banking, providing me with insight to the diﬀerent aspects of banking and oﬀering a unique perspective. Working for a smaller bank rather than a larger organization has given me the opportunity to learn more intimately about various bank functions.

What is your leadership style? Weintraub: It is important to me to create and support an environment where the team members have the ability to be successful. To facilitate communication among team members, I maintain an open door policy. Not only do I want my team to do well, but I want them to have the opportunity to continue to grow and have various experiences throughout the bank.

how do you handle a difficult decision? Weintraub: Before making a difficult decision, I think it is important to understand what really needs to be decided and the consequence or impact of that decision upon the individuals as well as the organization. Effective information gathering and solid communication are key in proceeding with a difficult decision.

how do you choose and manage the members of your team? Weintraub: When interviewing, I look for candidates with strong communication skills, both oral and written. I seek individuals who thrive in a dynamic environment and are willing to work collaboratively with their colleagues to get the job done. Having worked hard to create a collaborative environment, I look for individuals who fit within the bank culture, and, more specifically, the team. What experiences in the College helped shape your vision of leadership? Weintraub: My involvement and leadership roles within Alpha Kappa Psi professional business fraternity, team lead position while working for the U of I Foundation, and membership in Alpha Epsilon Phi had a significant impact on me. Each opportunity helped formulate my views of how individuals collaborate to accomplish shared goals and gave me the chance to observe the influence of various leadership styles.

What are the challenges and rewards of this type of position? Weintraub: Change in and of itself is challenging. The greatest reward is to make a difference within an organization and to see the positive impact upon completion of an effort. how do you define success in organizational/change management? Weintraub: Just like in life, your plans don’t always turn out the way you intended, but it’s how you respond to those challenges that make a person and a team successful in the long run. When I know that my team and I did the best we could, and have effectively brought about positive improvements to our organization, I consider it a successful day.

What are the most important tools needed to manage change across the organization? Weintraub: A personal willingness to change, patience, and an understanding that individuals receive messages differently are essential attributes when managing change. Rarely will you find a one-size-fits-all environment for communication, processes, and training. Change is not easy, often not well received, and rarely happens overnight. You need a solid communication plan with time for follow-ups with key stakeholders as well as an effective training plan to ensure that change is understood, bought in by the impacted parties, and successfully implemented.

College of Business I University of Illinois at Urbana-Champaign

[ COvER STORY ]

Lights, Camera,

Action

ONLINE LEARNING STEPS INTO THE SPOTLIGHT

or more than a decade, Heitor Almeida delivered his ﬁnance lectures in front of a classroom full of students. But lately, he’s been delivering some of them in front of a camera. It’s part of the College’s blended learning initiative, a method that blends the classroom instructional approach so that students watch lectures online and come to class prepared to discuss what they have learned. “I started to use this approach three years ago with my course on mergers and acquisitions,” says Almeida, the Stanley C. and Joan J. Golder Chair in Corporate Finance. “I’ve found it to be very eﬀective in so many ways. Students come to class more prepared, so the in-class discussions are more interactive and productive. And students appreciate the ability to listen to the lecture when and where it is most convenient for them. If they want to review concepts or reexamine a topic even after they have completed the course, they have easy access to listen again.”

Members of the College’s e-learning team collaborate in the state-of-the-art video studio in BIF. On screen from left to right: Jill Moore-Reynan, Sharon Hsiao, and Sandy Carroll; at the monitors, John Tubbs (on left) and Grant Czadzeck.

business.illinois.edu

For the faculty member there are benefits as well. “It’s an extremely efficient and consistent way of delivering content,” says Almeida. “If you teach two sections of a course, you know that both groups of students are getting the same information. You spend more time initially preparing and recording the lectures, but obviously the reusability is a benefit.” Such content is part of a growing library of video assets that the College is creating right in its own on-site studio in BIF. John Tubbs, an e-learning professional, heads up the video services for the College and oversees the professional studio space. “We have a team of instructional designers and media professionals who work with faculty to assist them in developing and delivering their course content in a professional digital format. This video is then available to students on their laptops, phones, and tablets,” he says. Video is the tangible product, and faculty create it in a quality space, complete with 4K cameras,

lighting, technology, and technical production support. Some videos may have a shorter shelf life because they deal with specific timely topics, while others, like Almeida’s fulllength general lectures, are a longerterm asset. Regardless of their initial use, the library of videos provides delivery options for students and development options for the College. “We can leverage existing videos and adapt them for additional courses or reorganize them for different purposes and timing,” says Tubbs. “It’s essentially a catalog of digital instruction to meet the needs of students how, when, and where they want it. It’s a highly efficient use of resources for innovative teaching and learning.” The College has developed distinct capabilities in the blended and online learning space and is well prepared for the task of producing quality content. A dozen fully online courses have been offered over the summer and winter breaks, and the College recently announced ex-

panded oﬀerings through Coursera, a platform that allows anyone, anywhere access to free online courses. Jeﬀrey Brown, William G. Karnes Professor of Finance, is a member of the College task force that provides guidance on the development of online initiatives. “Higher education is undergoing an important transformation in terms of how we deliver educational content to students,” he says. “The days of having the professor deliver an inperson lecture to note-taking students are quickly becoming a thing of the past. Once the traditional model of content delivery— the lecture—is placed online, then the natural next step is to think about delivering this valuable content to a much wider audience.”

enGaGinG learners That wider audience includes the more than 11 million people from around the world who are Coursera learners. The University of Illinois oﬀers 13 courses through this online platform, and 1.35 million

College of Business I University of Illinois at Urbana-Champaign

people are taking advantage of them. There are more than 200,000 learners enrolled in College of Business courses available through Coursera. And that number is poised to grow substantially in the months to come. This spring the College is offering two specializations through Coursera—one in digital marketing and a second in improving business finances and operations. The fourweek and eight-week courses that are part of the specializations are offered in two modes: self-directed and high-engagement. The self-directed courses are available on Coursera as Massive Open Online Courses (MOOCs). That means anyone can take them and there are no mandatory requirements, no fees, and no credit. The high-engagement courses are just as easy to access, but they appeal to a different audience, one that wants to receive University of Illinois credit for their efforts and the credentials that come with it. There is an application process and course registration similar to those required for traditional credit courses as well as a per-credit-hour fee. There is more rigor to their coursework, and ultimately they have more to show for it. The augmented content for high-engagement courses will be hosted on the campus course man-

business.illinois.edu

“We ought to always have the goal of educating people in the way that is most eﬀective for them, not just in the way that is most convenient and familiar to us.” B. Joseph White agement system. “High-engagement learning is an enhancement of the self-directed courses,” says Norma Scagnoli, the College’s director of e-learning. “They require more of a time commitment by participants because they are oﬀered for credit, have mandatory components, and include direct interaction with the instructor.” After completing the three or four courses within a specialization,

both groups of learners participate in a capstone project that focuses on the application and integration of knowledge and skills learned in the specialization courses. “A capstone leader, either a faculty member or an expert in the specialization topic, facilitates the capstone,” explains Scagnoli. “Participants present a ﬁnal report, project, or analysis. In the self-directed learning mode, the capstone will be peer

reviewed. In the high-engagement mode, the capstone will be closely monitored by the capstone leader and assessed based on peer review and capstone leader evaluations.” Self-directed learners can choose the signature track option, which offers them the opportunity to receive a certificate of completion for a $49per-course fee. While the certificate doesn’t hold any university credit, it does provide verification from Coursera that the coursework was completed. How will the learning be delivered for both models? Scagnoli says that self-directed learners can expect course materials from different sources, including video, readings, and demonstrations. Other activities include mandatory multiple-choice assessments and optional peerreview assignments and open forum discussions. The high-engagement experience is more expansive and interactive. It will include required readings, case studies, team assignments, papers, peer discussion, virtual office hours with the instructor and faculty assistants, and live online meetings via web conferencing. “The faculty members teaching these high-engagement courses can be creative and flexible,” says Scagnoli. “Our goal is to work with the instructors to build online

Norma Scagnoli, director of e-learning and Arshad Saiyed, director of digital engagement

courses that match their teaching style. We don’t want them to be limited by what’s allowed by the learning management system.” The high-engagement model also produces another beneﬁt, says Brown. “It has the potential to be a revenue generator for the College, which is especially important in an era of declining state ﬁnancial support.”

GloBal reaCh B. Joseph White, James F. Towey Professor of Business and Leadership and a member of the College task force on online initiatives, believes the College’s partnership with Coursera is a perfect ﬁt for a landgrant university. “The land-grant mission has always been to provide an excellent education to a large number of able and motivated people,” he says. “Today, we can fulﬁll that mission on a very large scale and maintain our commitment to high academic quality through the wise use of technology.” He cites Coursera’s ability to reach millions of potential learners

as an important piece of the education puzzle. “We ought to always have the goal of educating people in the way that is most eﬀective for them, not just in the way that is most convenient and familiar to us,” says White. “We live in a world where people are hungry for quality business education. Most of them do not have the luxury of spending an extended period of time in residence at our campus, yet they want and need the quality education we provide in our College. Fortunately, information technology can facilitate our serving those people through online education.” Raj Echambadi, associate dean of outreach and engagement and professor of business administration, agrees. “Coursera provides us with a global reach that was unimaginable at the time the land-grant mission of educating any and all was established,” he says. “As a pre-eminent institution with more than 100 years behind us, we meet this mission by delivering quality business education. The widespread availability

and dissemination of information through the reach of the internet makes transmission of that quality education easier. It’s how we create opportunities for people around the world to be equipped to drive the societal growth and transformation that will meet the grand challenges of our times and how we create a workforce that is ﬁnely tuned to global demands.” Initiatives like Coursera allow the College to reach learners all over the world in multiple languages. “A young manager in Delhi or an entrepreneur in Shanghai can access lectures from Illinois faculty,” says Brown. “Illinois is already a powerful brand around the world, and these eﬀorts enable us to leverage that as never before.” Arshad Saiyed, the College’s director of digital engagement, says the large number of learners also adds an important dimension to the learning environment itself. “With more participants from all over the world, you create a richer interaction for all learners and you provide an opportunity for problems to be

examined from a more global perspective rather than just assuming a U.S.-centered solution.” There’s influence beyond the numbers as well. “Coursera provides us with the power of analytics in addition to the power of scale,” Saiyed says. “The data we get gives us insights about what works and what doesn’t. This information allows us to shift and be dynamic from a pedagogical standpoint.” The result of dynamic pedagogy is strong content. “Quality is paramount in all our initiatives—online or otherwise,” says White. “Our task force has been insistent that whatever we offer and however we offer it, we maintain the very highest academic standards.” While Coursera is the delivery platform, the quality “product” is the College’s. “These are our College’s offerings, our content,” says Echambadi. “Coursera is providing the technological backbone for us to deliver it to 200,000 people today and who knows how many more in the future.” Cathy Lockman

•

College of Business I University of Illinois at Urbana-Champaign

[ GLOBAL PERSPECTIvE ]

The Time is Ripe for Change a slice of Chiquita history

Editor’s Note: In our Fall 2014 issue of Perspectives, College experts on tax inversions weighed in on how American companies were pursuing this strategy as a way to cut their U.S. tax bills and how such plans impact the global economy. At the time, Chiquita Brands was considering such a strategy, looking to merge with Fyffe’s, an Irish importer of fresh fruit. Shareholders rejected the plan in mid-October and just a few days later two Brazilian companies announced they would purchase Chiquita for $681 million. Here, another College expert, Marcelo Bucheli, shares his expertise on the history of the worldwide fruit business as Perspectives continues to explore ways in which the global economy is shifting.

ehold the banana. It tastes great, is a nutritional powerhouse, a staple of western diets, and costs less than 60 cents a pound. Over more than a century, Chiquita has turned the banana into a multi-billion-dollar business. “This was the first fruit available to Americans all year long at a relatively affordable price,” says Marcelo Bucheli, associate professor of business administration in the College of Business and the John H. Dunning Visiting Fellow at the Henley Busi-

business.illinois.edu

“This shows a shift in the way the global economy is operating. Chiquita was always considered an arm of American imperialism. ...And now it is a Brazilian company.” Marcelo Bucheli ness School, University of Reading in the UK. The American company—which operated under the names United Fruit Co., then United Brands, and finally Chiquita Brands International—was an astute player in the commodity fruit business. Among other things, the publicly traded food giant pioneered refrigerated

shipping and the development of disease-resistant banana varieties. The company also built ports, railroads, and telegraph lines in Latin America where there were none, creating an infrastructure network that stretched from its plantations to foreign markets. “It became the first vertically integrated agricultural multinational in

the world,” says Bucheli, the author of Bananas and Business: The United Fruit Company in Colombia, 1899– 2000. As it grew, the company had a ready ally in the U.S. government. “The government saw the company’s foreign investments as a positive thing because it gave the U.S. a presence in those areas,” says Bucheli. So, for instance, when the populace turned unruly in the countries where the company operated, the U.S. government repeatedly sent American troops to restore order. But the U.S. government sometimes did even more. In 1954, after Guatemala’s leftist president threatened to appropriate the company’s land for agrarian reform, the CIA covertly aided the coup that left Guatemala under military rule, Bucheli says. To this day, he adds, historians debate whether the United States acted in aid of the company or because the U.S. officials believed Guatemala’s president was a communist and needed to be ousted. In either case, he says, the company benefited. However, the company often found local governments very friendly—notably in the 1928 Colombian banana workers strike against United Fruit. Colombian

government troops intervened and machine-gunned the strikers. “The massacre is still remembered,” says Bucheli, who lived in Colombia during his teenage and early adult years. Controversy dogged the company periodically for the next eight decades. In the 1970s, for example, United Brands was ensnared in the U.S. investigation of illegal bribes paid by U.S. companies to foreign officials. The New York Times reported the company had paid a $2.5 million bribe to the Honduran president to gain a tax cut on bananas. In 1975, as the scandal unfolded, United Brands chairman Eli M. Black jumped to his death from his office in New York’s Pan Am Building. In 2003, Chiquita voluntarily admitted it had paid substantial sums to right-wing death squads in Colombia—a violation of U.S. law barring payments to terrorist groups. The company defended its actions, saying the payoffs were necessary to keep these groups from kidnapping and killing its workers, Bucheli says. Nonetheless, the company was hit with a federal indictment in 2007, which charged that the payoffs went to groups that had committed widespread violence around the country. The violence included the

assassinations of elected officials and slayings of union members and civilians, according to a report issued by the United Nations High Commissioner on Human Rights. “Sometimes they massacred complete towns,” Bucheli says. Chiquita settled the criminal case by paying a $25 million fine. But even as it ran afoul of U.S. prosecutors, the company was changing some things for the better, winning recognition for environmental stewardship and improved treatment of workers. Last year, the company agreed to be acquired for $681 million by Cutrale, a Brazilian orange-juice producer, and Safra, its investment-firm partner. “This shows a shift in the way the global economy is operating,” says Bucheli. “Chiquita was always considered an arm of American imperialism. It was seen as the quintessential representative of American domination. And now it is a Brazilian company.” • Doug McInnis Sources for story and timeline: Chiquita.com, declassified CIA information on the Guatemalan coup, 2007 indictment filed in U.S. District Court for the District of Columbia, The Wall Street Journal, The Economist, The New York Times, and United Fruit Historical Society.

1899

United Fruit Company, Chiquita’s predecessor, is formed to distribute bananas in the United States.

1903

United Fruit pioneers the use of refrigerated shipping of perishable foods.

1904 O. Henry, the American writer, coins the term “banana republic,” a country whose economy is dependent on the inﬂux of capital from a foreign country. 1928

Colombian troops gun down striking United Fruit banana workers. The massacre was later ﬁctionalized in Gabriel García Márquez’s 1969 novel, One Hundred Years of Solitude.

1941

United Fruit’s shipping ﬂeet goes into service of the American and British war eﬀort.

1954

CIA covertly aids a coup against Guatemala’s president, who threatened to appropriate United Fruit lands.

1969

United Fruit is awarded a patent for low-oxygen packaging that retards ripening during shipping.

1970

United Fruit changes its name to United Brands.

1973

United Brands introduces the ﬁrst refrigerated container ships for transport of bananas between Latin America and Texas.

1975

Federal corporate bribery investigation targets United Brands. The company’s chairman commits suicide.

1990 Company changes its name to Chiquita Brands International. 1994

First Chiquita banana farms certiﬁed by the Better Banana Project of the Rainforest Alliance, which promotes environmental practices and better treatment of workers.

2002 Chiquita emerges from Chapter 11 bankruptcy proceedings begun the year before. 2005

Chiquita purchases the Fresh Express brand of packaged salads.

2007 Company is indicted for payments to Colombian terrorist groups. Chiquita later settles the case with a $25 million ﬁne. 2009 Chiquita wins the Circle of Excellence Award for environmental protection and corporate social responsibility measures. 2014

Chiquita, long a publicly traded U.S. company, is sold to foreign investors.

College of Business I University of Illinois at Urbana-Champaign

[ 60-SECOND PROFILE ]

Lecturer of AccountAncy

The number of years Julie Shapland worked as a professional accountant before joining the College

210

The number of pages in Cases in Financial Accounting, which Julie co-authored; the casebook, published in 2013, includes 4 realistic accounting projects suitable for graduate or undergraduate accounting students

6001

The estimated number of students Julie has taught during her 16-year academic career

The number of years Julie has volunteered as a member of the finance committee for the United Way, where she was recently named to the Board of Directors; Julie also volunteers on the finance committee for Parkland College

The number of years Julie played on her youth ice hockey team as the first girl in the league

350

The number of dollars Julie saved over 4 years as a babysitter to buy her first horse in 1978; she spent 9 years competing in equestrian sports

The number of chickens on the 85-acre hobby farm outside Champaign that she and husband Charlie, son Nick, and daughter Hadley will soon call home

140

The number of active members in the College’s chapter of Alpha Kappa Psi, for which Julie volunteers as faculty advisor; she also serves students through her work as director of the accountancy internship program

2015

The year Julie was nominated by a student for the Illinois CPA Society’s Outstanding Educator Award

business.illinois.edu

Julie enjoys time with Mr. Kipling, her daughter’s 7-year old Warmblood gelding, at Commonwealth Farm in Homer. The farm is owned by Terri Foreman and is home to the University of Illinois’ English Equestrian team. Earlier this year, the team won the regional championship and qualified for the zone competition. Six Illinois students qualified individually as well.

College of Business I University of Illinois at Urbana-Champaign

Together these three faculty members have devoted 100 years of service to the Department of Finance (from left, Jim Gentry, professor emeritus; Louis Chan, professor and department chair; and Roger Cannaday, associate professor emeritus).

[ CENTENNIAL SNAPSHOT ]

A Look Back

INNOVATION AND EXCELLENCE IN FINANCE EDUCATION

Editor’s Note: As the College celebrates its 100th year, Perspectives will include a series of Centennial snapshots that focus on the history of our departments. In this issue, we share a snapshot of the story of our Department of Finance through the reflections of our faculty and a timeline of department milestones.

ase studies have long been a strong teaching tool in business. Jim Gentry, who joined the ﬁnance department at Illinois in 1966, had been using them as part of his courses for 25 years before he came up with a diﬀerent idea—base the class totally on case studies. “In the spring of 1992, I taught for a semester at the University of Virginia and realized that complete immersion in case studies creates a unique learning environment,” says Gentry. “So when I returned that fall, I started a new under-

graduate course called ‘Cases in Finance’ and then in 1993 I started a new graduate course with the same focus.” Now a professor emeritus, Gentry taught the graduate course until last spring. “It was so satisfying to see the excitement that researching, analyzing, and presenting these cases created for our ﬁnance students,” says Gentry. “Even years after they took the course, I would hear from students that they would recall concepts that they learned in the Butler Lumber case.”

At the same time, case competitions across the country began to take off—and the College, with Gentry’s leadership, was well represented. “Our first case competition with Scott Brubaker as the team leader was at the McIntire Business School at the University of Virginia in 1993,” he says. “We had teams do well in Big Ten case competitions throughout the years, and in 2008 and 2009 I coached the case teams at Northwestern’s Default Case Competition, where we finished second.” Gentry’s commitment to providing students with this

1957

1958

1963

1969

The Department of Finance is established with the transfer of six faculty members and their courses from the Department of Economics. Paul van Arsdell (at center) is named head of the department, a position he would hold until 1971.

A master’s degree in ﬁnance is established; a PhD program in ﬁnance is established the following year.

Finance Professors Robert Mehr and Bob Hedges publish Risk Management in the Business Enterprise. Earlier, Mehr had co-authored Principles of Insurance with ﬁnance instructor Emerson Cammack.

The Executive Development Program, taught by faculty from across the College, including the ﬁnance department, welcomes executive students (above) to a four-week summer session.

business.illinois.edu

Photo credits: Letter, at left, and Image 6146, at right, courtesy of the University of Illinois Archives; page 20, at left, Image 7017, courtesy of the University of Illinois Archives.

College of Business I University of Illinois at Urbana-Champaign

practical learning experience was recognized eight years ago when the College established the James A. Gentry Case Competition in Corporate Finance held every spring. In addition to teaching, Gentry mentored students by serving as the College’s Finance Club advisor from 1982 until 1987. But some of his most memorable teaching experiences, he says, were those he shared as part of the Executive Development Program. “I was involved each summer from 1988 to 1996,” he says. “Faculty from across the College, including Rick Winter, Howard Thomas, Fred Gottheil, Peter Holzer, Dave Whetten, Charles Smith, Kent Monroe, and myself, team-taught executives for the one-month program. I will never forget the great collaborative teaching experience we had working together.”

a sTronG TraDiTion The collaboration Gentry mentions has played a role in the Department of Finance since it was established in 1957 through the team

efforts of faculty from the Department of Economics, including Robert Mayer, Robert Mehr, Paul Van Arsdell, Robert Harvey, Robert Hedges, and James Leonard. Van Arsdell, who earned his bachelor’s, master’s, and PhD degrees from Illinois, served as the head of the finance department from 1957 until 1971; Leonard served from 1971 until 1980. Chuck Linke, who led the finance department after Leonard, joined the faculty in 1966, along with Gentry and Bill Bryan. During the 1980s, the chairmanship of the department alternated between Linke and Bryan. Roger Cannaday, associate professor emeritus, said both Linke and Bryan were instrumental in creating an environment of excellence and collaboration in the department. “Bill Bryan was a strong leader and a great mentor to me,” says Cannaday, who joined the faculty in 1979. Though Cannaday officially retired in 2006, he has continued teaching real estate courses in the

department and still serves as the faculty advisor for Rho Epsilon, the student real estate organization. Real estate has had a strong tradition in the College, ﬁrst as “urban land economics” formed by Harvey in 1954 as part of the Department of Economics. In 1957, the program became part of the newly established Department of Finance, and Harvey taught all the courses—three in the spring and three in the fall. “Peter Colwell came to the College in 1977, and he put the real estate program on the map,” says Cannaday. “He was a great scholar and teacher, and his work kept us in the top 10 rankings in programs for undergraduates around the country.”

a GroWinG rePuTaTion The department also had earned a stellar reputation in the area of insurance and risk management. “The opportunity to be part of such a strong program drew me to Illinois,” says Stephen D’Arcy, who earned his MS and PhD in ﬁnance here and joined the faculty in 1982.

“Originally, I thought I would get my degree and then continue in industry, but teaching changed my mind,” says the professor emeritus. “My advisor was Bob Mehr, who was a great mentor and academician. The year I earned my PhD he retired, and I took his position.” Mehr was a recognized authority on risk management and insurance, authoring several books, including two with other Illinois finance faculty: Risk Management and the Business Enterprise with Robert Hedges and Principles of Insurance with Emerson Cammack, who taught Finance 260, the introductory course in insurance, and served as associate dean for undergraduate affairs for the College. Their work was influential to D’Arcy. “Emerson Cammack was an inspiration,” he says. “He absolutely loved teaching, and he was nationally recognized for his work. We never had more than three or four faculty members teaching insurance, but the caliber of the faculty,

the scholarship, and the students always kept our program at the top in the rankings, often right behind and sometimes ahead of Wharton.” When Cammack retired in 1990, Morgan Lynge was named associate dean for undergraduate affairs, a position he held until 1995. Lynge had earned his MBA at Illinois in 1965 and joined the faculty in 1974. The professor emeritus taught corporate finance until 2009. “Emerson was an institution among faculty and students,” Lynge says. “He was very accessible to students, and he was known for always having piles of books and papers on his desk. Though he had a computer on his desk, they really weren’t widely used at the time. In fact, when grade reports came in, a clerk copied it all down on paper.” During Lynge’s tenure as associate dean, the office made the transition from paper records to computerized records, developed a

series of academic contracts for students, and implemented a degree audit recording system to ensure that students were meeting graduation requirements.

GroWTh, QualiTy, anD innovaTion The department has grown substantially since it was established with six professors and 68 undergraduates; however, it is the quality and innovative nature of the program that truly makes the department stand out, says Cannaday. He cites the leadership of Linke in helping to recruit exceptional faculty like Josef Lakonishok to the department in the 1980s. “Attracting top faculty talent was key to growing the reputation of our department and attracting even more exceptional scholars and highly motivated and talented students,” says Cannaday. Linke agrees. “The ﬁnance department has been blessed with

outstanding scholars like Josef Lakonishok, who is an intellectual giant,” he says. “It was a privilege to learn from him, and it’s obvious that the department continues to attract faculty of the highest caliber.” Cannaday says a renewed focus on the MS Finance program in 1995 by Linke and Joseph Finnerty also impacted the department positively. “We had had an MS Finance program since 1958; it was the first MS Finance program in the United States,” he says. “But it was not financially sustainable because most students received tuition and fee waivers. We initiated a new model of the MS Finance program in the summer of 1995 and as part of that we eliminated tuition and fee waivers. The new program started small, with 15 students that first year, but it grew rapidly and in recent years has reached an enrollment of approximately 120 students each year.” The department continues to respond to the changing needs of the

finance industry and to provide opportunities for students to grow and for ideas to be exchanged. The Master of Science in Financial Engineering was established in 2010 to prepare students for this emerging multi-disciplinary field that focuses on managing the challenges of tomorrow’s risks. The Center for Business and Public Policy, established in 2007, focuses on the exchange of ideas, promoting research about how market forces and public policy shape one another and communicating those findings through innovative teaching and public engagement activities. “The department has had a long history of excellence,” says Linke. “There has always been a culture that teaching is very important and is highly valued. We’ve had some of the best researchers and scholars as well, all of which contributes to the excellent reputation of the program historically and positions it well for the future.” • Cathy Lockman

1971

1974

1979

1980

1982

1990

1995

2007

2010

2014

2015

There are 410 ﬁnance undergraduates taking one of three concentrations: ﬁnance, investment, and banking; insurance and risk management; or real estate and urban economics.

Morgan Lynge joins the faculty, teaching ﬁnance for 35 years (at left delivering a lecture in 1981) and succeeding Emerson Cammack as associate dean of undergraduate aﬀairs in 1990.

Roger Cannaday (above in front row, far left) joins the faculty and begins his long association as the advisor for Rho Epsilon, the student real estate organization.

Chuck Linke (above) becomes chair of the department, a position he held until 1984 and then again from 1988 to 1995. Linke joined the department in 1966.

Steve D’Arcy (above) joins the ﬁnance faculty. In addition to teaching the department’s insurance courses, he served as president of both the Casualty Actuarial Society and the American Risk and Insurance Association.

Emerson Cammack (above), who taught Finance 260 for 41 years and was the associate dean for undergraduate aﬀairs, retires.

A graduate program in international ﬁnance is established with an entering class of 17.

The College establishes the Center for Business and Public Policy.

The Master of Science in Financial Engineering is established.

George Heideman ’34 (center) publishes To Restore American Liberty. Though he graduated two decades before the department was founded, Heideman, now 102, spent his career in ﬁnance and business.

Today’s ﬁnance students are part of the tradition of excellence established nearly 60 years ago.

business.illinois.edu

College of Business I University of Illinois at Urbana-Champaign

[ REALITY CHECK ]

Oﬀ target?

The Reasons

The Reality

hy would a retailer with so much success in the United States fail so badly in a market that seems so similar? And why did Target beat such a hasty retreat?

The answer to the first question is execution; the answer to

n 2013, Target made a run for the border, opening 124 stores in Canada all at once. It was the U.S. retailer’s first international expansion, and they did it by buying out the store leases of Zellers, a Canadian discount chain. At the time, it seemed like a wise business move, maybe even a brilliant

one. It provided a new market of 36 million consumers, many of whom are already familiar with the Target brand from trips to the United States. It also gave Target a ready-made base of stores across the country without the expense and time needed to actually build new ones. But the execution didn’t live up to the expectations. In fact, our neighbors to the north were so unimpressed by the retailer’s rollout that Target announced in January that the doors of all their stores north of the border would be closed.

the second is money. “Target’s brand essence in the U.S. has to do with design and atmospherics,” says Tiffany White, associate professor of business administration and Bruce and Anne Strohm Faculty Fellow. “So it was concerning that they chose to populate buildings previously occupied by a low-end discount retailer in neighborhoods that are arguably less populated by members of their target audience. Without taking time to cultivate relationships with Canadian consumers based on their more upscale, clever, and design-conscious brand personality, they really just were another ‘me-too’ player in an already crowded discount retail space.” Walmart has been one of those players since coming to Canada in 1994, and the retailer wasn’t going to sit still when Target came to town. Walmart jumped in with aggressive pricing to maintain their customer base, putting further pressure on Target. And there were logistical problems as well. The configuration of the Zellers stores didn’t fit the Target big-box model, which created merchandising and store-flow issues. In addition, opening so many stores so quickly resulted in inventory and distribution problems, which meant empty shelves in the store and growing numbers of dissatisfied shoppers. All of this meant less in the cash register tills. Even the most optimistic estimates predicted it would be at least 2021 before Target would make a profit in Canada. So Target announced they were pulling out and took their lumps. It is reported that Target had a total net loss of about $2 billion.

Tiffany White, the Bruce and Anne Strohm Faculty Fellow, shares her expertise on consumer expectations and the importance of delivering on the brand promise as Perspectives asks how Target missed the mark with Canadian consumers.

They had to take their lumps with customer sentiment, too. “Canadian consumers expecting the polished, ‘cheap chic’ ambiance of U.S.-based Target stores were surely disappointed by its failure to deliver on its brand promise,” says White. “There’s no question that loyal consumers are willing to forgive brand transgressions like store stock outs and even slightly higher prices. But, once consumers’ threshold of tolerance has been crossed, it’s difficult—and often impossible—to regain their trust and admiration.”

• Cathy Lockman

business.illinois.edu

College of Business I University of Illinois at Urbana-Champaign

[ ON LOCATION ]

“What if” might be the two most important words in business. Hugely proﬁtable companies have sprung from those words.

Thinking Outside the Box

Matt Harris, a senior accounting major in The Hoeft Technology & Management Program, recently asked, “What if a driver could use wearable technology to detect his level of fatigue, his blood alcohol level, his heart condition, and whether or not he is speeding?” Sarah Chaitoff, a junior finance major in the T&M Program, and Chase Bonhag, a first-year MBA student, asked, “What if we could develop a mobile app to extract and consolidate real-time travel data from existing apps to automatically make decisions to optimize driving routes and schedules?” Harris, Chaitoff, and Bonhag were three of 18 University of Illinois students—16 in the T&M Program and two MBA students—to take part in the 9th Annual Technology & Management International Business Plan Competition in Silicon Valley earlier this year. Other participants included students from the Hong Kong University of Science and Technology and the University of Bayreuth in Germany. The competition, which focused on new business opportunities made possible by advancements in automotive and information technologies within the transportation ecosystem, provided students with a unique opportunity.

College of Business students participate in the 9th Annual Technology & Management International Business Plan Competition in Silicon Valley earlier this year. Foreground photos include Matt Harris ’15 ACCY on the left and John Quarton, director of The Hoeft Technology & Management Program, on the right.

business.illinois.edu

College of Business I University of Illinois at Urbana-Champaign

Alumni Dan Wenhold (below) and Andrew Chapello (right) were two of several alumni who shared their time and expertise with Illinois students participating in the Technology & Management International Business Plan Competition.

aDviCe froM The TrenChes

ten t&M alumni provided valuable help to students as they prepared for the competition. Some were available in person, while others signed up to be contacted by Skype, Google Hangouts, or phone to discuss ideas. Dan Wenhold ’09 fIn was one of them who generously gave his time and his advice. He provided students with feedback on customer segmentation and target audiences. “the attitude of the students impressed me,” he says. “they were excited about startups, trying to solve a problem that would improve the efficiencies of a lot of people’s lives. “I feel very strongly about entrepreneurship,” says Wenhold, who is part of a unique and profitable startup called the Black tux. “I wanted to let the students know about some of the opportunities outside the traditional realm of accounting, finance, and engineering careers.” Andrew chapello ’10 Accy also served as a consultant. “I wanted to help the students think through real-world problems,” he says. chapello, a senior business operations analyst at Box, counseled students on their project vision, on questions to be prepared for, and on their presentations. “they were thinking really big, which is one of the tenets of the competition,” he says. “I wanted to give back, since I am in a position to share a bit of my real-world experience with them.” John Quarton, director of the t&M Program, appreciated the help alumni provided. “they’re a group who have had experiences like this,” he says, “whether in this competition or our annual trip to china. So when they have an opportunity to give back in some way, they’re in. It’s a passionate group of alumni.” Such interactions with alumni were certainly a benefit for the Illinois participants as was time spent with industry experts and other top students from around the world. In addition, the experience opened up potential new pathways for the participants, who retain the intellectual property that came from their endeavors.

business.illinois.edu

“We wanted to expose students to companies that are disrupting the world through technology and changing the world as a result,” says John Quarton, director of the T&M Program. Students from the three universities were split into eight teams of six students each, so that each team included students from each university. Team members worked together to develop a product idea and present it to a panel of judges from Mercedes-Benz, Uber, Google X, and Walmart. “Sometimes teams have months to develop a concept and business plan,” Quarton says. “These students were given eight days before they pitched in front of people who hire and manage many of the best and brightest in their industries.”

real ProBleMs, real WorlD The competition is an extension of the already distinctive experience they get as part of the T&M Program, which was established in 1995 through gifts from Leonard and Mary Lou Hoeft. Leonard was a 1947 graduate of the College. “To bring a group of talented business and engineering students together in a technology and management program is very unique,” Quarton says. “I’m not aware of any other undergraduate program like this in the country that merges busi-

ness and engineering students for two years inside and outside the classroom to work on team-based projects. This program prepares students very well for the real world.” And the business plan competition, which Illinois helped found, is unique as well, Quarton adds. The experience lasts for a total of 10 days, with a bit of sightseeing and several company visits built in. Illinois students have been on four continents for the competitions, learning from, working with, and competing against top students from other universities. “It’s a signiﬁcant learning experience in a very condensed period of time,” Quarton says. “It accelerates the learning process and complements the classroom experience. There’s not another competition like it of this duration and magnitude. When you team our best business and engineering students with the best students from other top universities from all over the world in this type of business plan competition, magic happens.” The students agree. Bonhag notes that he not only applied hands-on what he has learned in the classroom, but he got to experience “all of the problems that arise as you attempt to solve a problem.” Harris appreciated the opportunity to step out of his comfort zone and “face many of the same chal-

lenges that startups and top executives do on a daily basis.” Chaitoﬀ was amazed that her team’s idea—on creating an app that could maximize driving routes and schedules, particularly applicable to sales reps and other professionals who frequent the road—“transformed from a simple idea into this incredibly complex solution to address problems that we hadn’t even considered initially.” That, says Quarton, is the beauty of the competition. Team members “come from different perspectives and diﬀerent backgrounds,” he says. Mixing the Illinois students with students from Germany and Hong Kong forces everyone to think about what can work well cross-culturally. “What might play well in San Francisco or Champaign might not work so well in Hong Kong,” he says. “These students aren’t necessarily looking to be entrepreneurs initially,” Quarton says. “Most of them will go on to jobs in industry or in consulting. But this competition exposes them to something that might be another option down the road. After all, wherever they are, they all have to innovate. It’s innovate or die, whether you’re working for a startup or a Fortune 100 company. So they’ll be able to use the skills of an entrepreneur regardless of where they land.”

•

Tom Hanlon

The insiDe sTory on ThinkinG ouTsiDe The Box chase Bonhag, Sarah chaitoff, and Matt Harris (from left to right above) participated in the 9th Annual technology & Management International Business Plan competition in Silicon Valley in January. chaitoff’s and Bonhag’s team was awarded first place in the competition; Harris’s team took first runner-up. Here they share a few thoughts on the experience.

Perspectives (P): sarah and Chase, how did your team’s idea about an app to optimize driving routes and schedules evolve? Sarah Chaitoﬀ: We started with the problem of distracted driving and came up with the idea to automatically notify the expecting party of delayed arrival in a very personal and informal context. that quickly and drastically evolved into an app that resembled an automated personal assistant with a full range of capabilities far beyond automatic etA notiﬁcations.

bined this idea with the growing popularity of wearable technology and created a band-type product. Many of the technologies for the band exist separately, but no company has compiled each of them into one piece of useful technology.

P: What would the ﬁnal product do? Chase Bonhag: the app consolidates and assesses real-time travel data from a multitude of sources to optimize eﬃciency throughout your entire day. the automated communication system minimizes distracted driving, combats the unexpected variability in travel, reduces the stress of schedule changes, and overcomes the limitation of human computational power to extensively analyze complex situations.

Harris: to always be open to new experiences and types of learning that may be out of your area of expertise. I was a bit anxious that I would be uninterested in the work and would provide little value to my team. However, after working through my ﬁrst business model canvas on campus before the competition, I immediately gained conﬁdence and interest and carried that passion forward into how I prepared on my own before the competition and into the competition itself.

P: Matt, how did your team’s idea about wearable technology for drivers—to detect fatigue, blood alcohol level, and other safety factors— evolve? Matt Harris: the idea started from the theme that we wanted to increase road safety. We com-

Chaitoff: Learning how to work within such a diverse group of people. especially with the interconnectivity of the world today, the opportunity to work with students from two other international universities was incredible. An important takeaway was learning how to utilize our different perspectives and overcome cultural differences.

P: What was your biggest takeaway? Bonhag: each person is coming from a diﬀerent background with a diﬀerent skill set, and it is important to leverage all of that information to make key decisions.

College of Business I University of Illinois at Urbana-Champaign

[ ALUMNI CONNECTION ]

Meter made B

ob Youakim ’99 BA was financially set as an investment banker about six years ago when he began to notice something odd: Drivers in the parking garage he used would regularly leave without paying when attendants went off duty after 10:00 p.m. At the same time, his cousin, Charlie Youakim, was writing his license plate number on an envelope and leaving money in a drop box to pay for parking. Charlie had worked for a company that made parking access revenue control devices—the very kind that drivers were ignoring in the garage Bob used. The idea for the company came from the problems they experienced every day, and the two set out to provide a solution. Growing up, Bob and Charlie always talked about starting a business together, although they would have never guessed it would have been in the parking industry. In the weeks and months that followed, the cousins created a passport, if you will, to their own destiny. “We saw a huge opportunity,” Bob Youakim says. “We both put everything we had into this. We selffunded the company, put everything on the line. I bet my life savings to support the vision that we had. It was all chips in.” The gamble the cousins took on themselves is paying off handsomely.

business.illinois.edu

“Our mindset is we’re trying to fix problems. We brainstorm about how we can improve current situations that folks are dealing with and have our ear to the ground. “ Bob Youakim in The BeGinninG They launched Passport Parking —now known simply as Passport— in 2010. In doing so, they fulfilled a lifelong dream of building a business together. Their two-person company has expanded to 60 employees operating out of their home office in Charlotte, North Carolina, with another 10 working out of Bangalore in Karnataka, India. Passport had humble beginnings —Youakim helped build the com-

pany at first by working nights and weekends while retaining his day job. But today Passport is “the leader in mobile payment technologies in the parking industry,” says Youakim. The company started out offering municipalities and other clients parking solutions. They soon branched out to offer transportation solutions as well. “For consumers, it’s all about convenience and transparency of information,” says Youakim. “We removed the anxiety around where’s a spot to park, where’s my bus, how

can I pay for the bus or for parking. Having to ﬁnd a space to park and scramble for change is not fun. By removing unnecessary steps from a process, you can focus on what’s really important.” Youakim explains that by leveraging phone sensors and using algorithms, they can deduce when a space is likely to open up. “We know if you’re walking or driving or parallel parking,” he says. “If you enter a parking space, we can detect that you are parking and that are you walking away. As you come back and approach your car, we know there’s a high likelihood that you’re going to be leaving.” If it sounds Big Brotherish, it isn’t—unless you picture Big Brother as a giant parking valet. Further, Youakim says, when you use their application, you can be in a meeting, get a reminder on your smartphone that your meter is about to run out, and virtually “plug your meter” while in your meeting. Passport works with a few hundred clients — municipalities, universities, and transit agencies— “building tools that foster making their day easier,” Youakim says. alloWinG ClienTs To MainTain Their oWn BranD A key diﬀerentiator to Passport’s B2B approach, Youakim adds, is that they allow their clients to keep their own brands. “When we roll out a

College of Business I University of Illinois at Urbana-Champaign

[THE MAIN EvENT ]

Bright Minds, Bold Work city, you’ll have no idea that it’s Passport,” he says. “For example, when you go to Boston and park, that’s us. When you go to Chicago and park, that’s us. There are 46,000 signs around Chicago saying ParkChicago. Being from Chicago, it’s a humbling and proud sight representing our story and hard work—especially when you can see what kind of impact we can have on a community.” Users of ParkChicago (the largest mobile parking payment system in North America) and ParkBoston see the city’s brand on their website and application. Down in a far corner of the site, an astute observer can see “Powered by Passport.” “Agencies prefer their own brand being stapled all over their city or transit system over any vendorbranded marketing,” Youakim says. “They’ve spent a lot of time and capital building to establish their own brand. So we created a model where clients can maintain their integrity and pride and brand without having to scatter signage all over a city that’s not theirs. It’s an implicit insurance policy, if you will, that has changed the marketplace from what was out there before Passport.” BranChinG ouT Youakim says that while the company was focused on parking early on, the cousins soon realized that transit agencies were facing the same problems.

business.illinois.edu

“We said this is not diﬀerent from what we’re doing with a parking meter. Why don’t we bridge the same technology into our vision, which we’re calling the ‘all-city multimodal application,’” Youakim says. “And we’re seeing the vision of our all-city application come to life. We just rolled out Tucson, handling all their on-street parking, and we’re going to extend the application to their bus transit system. We currently support Columbia, South Carolina’s bus system. We’ll also be rolling out Champaign with a private label called Mobile Meter this spring. You don’t realize it, but we’re entrenched in the fabrics of these communities. We’re helping these cities bring this technology inhouse, being the intel inside the computer, if you will. It’s been exciting to see the growth over the years.” Cities are excited as well, Youakim says, because they have the ability to receive highly useful data

that was historically limited or not available. “Cities can analyze where people are coming from to get on the transit, where they’re getting off,” he says. “So maybe it’s telling you that you need to open up an express lane. Maybe you need to add another route over here because a lot of your people are getting on at a certain point. Maybe you should add a line to accommodate for that or extend the route. At the end of the day, cities have a massive benefit from understanding the community like they never have before. It’s data they can use to further support and enhance their community.” Passport makes it easy for consumers as well, not only in terms of finding how to get from point A to point B, but in paying for it. Consumers can pay with a debit or credit card, merchant validation, PayPal, and additional payment methods as they become available.

“ChanGinG an inDusTry” “We started with parking,” Youakim says. “We expanded into transit. And the sky’s the limit with other verticals that we could potentially incorporate, including support for autonomous cars, which are not that far off.” Youakim has deep roots in Champaign and credits his time in the College of Business with instilling in him the principles of teamwork and problem solving— principles that have guided him in helping to build Passport with his cousin. Charlie is focused on the technology side, Bob on the sales side. Both operate as co-CEOs, sharing the decisions on strategy, operations, and direction. “No one ever grows up saying, ‘I’m going to be in parking, I’m going to be in transit,’” Bob says. “Our mindset is we’re trying to fix problems. We brainstorm about how we can improve current situations that folks are dealing with and have our ear to the ground. So to see that come to life, from a vision, an idea that we had four years ago, to see it affect the day-to-day and continue to grow, that is exciting. There are very few times when you can change an industry, and we’re doing that.” Tom Hanlon

llinois MBA alumni comprise an incomparable network of bright minds—and hundreds of them were on hand for the 2015 MBA Alumni Banquet at the JW Marriott in Chicago in February. Dean Larry DeBrock shared College and MBA updates and introduced the program’s 2015 Alumni Award winners: CJ Desai and Katie Blum. Desai, who earned his MBA in 1995, is the president of the Emerging Technologies Division of EMC—a Fortune 500 company that specializes in information technology and cloud computing. Katie is the senior director of campaign planning and strategic management for the University of Illinois Foundation. She is a 2010 MBA graduate. Congratulations to both of our winners and thanks to all of our MBA alumni who provide outstanding leadership in their fields and loyal service to the College.

•

College of Business I University of Illinois at Urbana-Champaign

[ THE REASON WHY ]

Who Rachit Shah, business development manager for Rithmio and 2014 graduate of the Master of Science in Technology Management (MSTM) program

GESTURE OF APPROvAL

WhaT Was offered his position as a result of work done in the MSTM practicum project When Entered the MSTM program in 2013; graduated in 2014 and was hired by Rithmio

ou don’t always know who’s going to give you the thumbsup. For Rachit Shah ’14 MSTM, a big sign of approval came in the form of a job offer from Rithmio, a company that develops gesturerecognition technology. Shah was introduced to the startup as part of the practicum project in the Master of Science in Technology Management program in the College of Business. Less than a year later, he is the company’s business development manager. The work and the challenge are a perfect fit for Shah, who began the one-year MSTM program in 2013 after graduating from the Institute of Chemical Technology in Mumbai. He knew no one when he showed up on campus, but that didn’t matter. “I came to America to get out of my comfort zone,” Shah says. “I wanted to seek new opportunities.” He found exactly what he was looking for with the MSTM, an innovative program that prepares students to lead firms in the rapidly changing technology environment. Shah admits to being “an engineer at heart,” but he also is passionate about learning the competitive strategies, business practices, and leadership skills needed to complement his scientific strengths. “I don’t want to deviate from my engineering; I want to build something with it.”

business.illinois.edu

The MSTM experience got him started, and the work at Rithmio is providing an exciting opportunity to move him forward. Rithmio’s gesture-recognition software works with motion-sensing devices such as wearables, smartphones, or connected sports equipment. Brands leverage Rithmio’s platform, which can swiftly learn a person’s gestures and accurately detect, classify, and analyze those gestures in real time, to create personalized and accurate gesturebased products. The technology is particularly useful in health care and security, gaming, human-computer interaction, and physical activity tracking. Shah was introduced to Rithmio as part of the MSTM practicum, which provides opportunities for teams of MSTM students to work with real clients in a consulting-based project. Shah was part of a six-student team that developed market entry strategies to launch Rithmio’s technology. The primary purpose of the project, Shah says, is to “connect all the principles we learned and apply it to real life, to understand the difference between theoretical application and the practical world.” Working on the project for Rithmio, Shah says, “was very different, because when you work for a

startup, things change very quickly. In most projects, you have a problem definition, you research, and you come up with recommendations. However, with Rithmio, the problem definition changed every few weeks. We quickly realized how important it was to adapt to changes.”

ChanGe & ChallenGe Shah found the changing environment invigorating. He was also impressed with the passion and leadership of Rithmio’s CEO Adam Tilton, who took a leave as a doctoral student at Illinois to start the company. Rithmio was cofounded by Tilton and his adviser, Prashant Mehta, an associate professor in mechanical science and engineering. “I learned so much through the practicum project about the technology and the business. And I saw the passion and vision that Adam had for the company. I felt very fortunate to be offered a position with Rithmio and to able to continue to learn from Adam and the rest of our team,” Shah says. But, of course, it’s not without its challenges. “I was the second employee of the company,” Shah says. “I saw my friends in bigger companies going through ‘orientation week.’ But for me, it was ‘dive in and learn as the company evolves.’ People think that wearing many hats within an organ-

ization is ideal, but it can be very challenging. Working in a startup is fascinating and enjoyable, but there is a lot of hard work going into it.” That hard work, Shah says, is buffered by a supportive atmosphere in which mistakes are expected and understood as part of the learning process. “We need to learn from every small experience that comes our way—not just from our own experience but from our colleagues’ experience as well,” he says. And his experience is growing quickly. Shah was initially hired as a business development associate, tasked with procuring new clients. Just a few months in, he was promoted to business development manager, with additional duties in operations, finance, and human resources. Shah says with a startup it is difficult to see too far down the road. But he is okay with that. He likes the challenge and the learning that each day brings. “Days are never dull,” he says. “Sure there are some frustrations when you work in an area where change is the one constant, but at the end of the day, there are great challenges and rewards. Plus, it’s really fun.” Tom Hanlon

Where Works out of Rithmio’s Chicago office, which focuses on business and product development; the company’s research work is headquartered in EnterpriseWorks, the startup incubator located in the University of Illinois’ Research Park in Champaign Why Chose the MSTM program to learn the competitive strategies, business practices, and leadership skills needed to complement his scientific strengths

•

College of Business I University of Illinois at Urbana-Champaign

[

PARTING SHOT

]

There are many ways to frame a problem. But the first step is to think creatively and not box yourself in. College of Business students like Sarah Chaitoff followed that strategy while participating in the 9th Annual Technology & Management International Business Plan Competition in Silicon Valley—and it paid off. Chaitoff and her team won the competition by thinking outside the box.