VC firms that score high in diversity among their partners also tend to be more profitable, according to Paul Gompers. HBS photo
News from Harvard Business School
“Recent research shows for the first time that diversity in venture capital firms not only spawns creativity and alternative viewpoints, but also improves financial performance.
“Paul Gompers, Eugene Holman Professor of Business Administration at Harvard Business School, summarizes his recent research in a new article in Harvard Business Review, ‘The Other Diversity Dividend,’ co-written with HBS research associate Silpa Kovvali.
“They focused on the venture capital industry, which provided a unique laboratory for investigating financial performance. Starting six years ago, Gompers began gathering demographic information on individual VCs to better understand if their gender or race influenced a firm’s performance.”
Read more …
The Downside Of Doing Good
News from Notre Dame University Mendoza College of Business
“A CEO who invests in corporate responsibility practices takes a risk, according to new research.
“In 2006, TIAA-CREF sold its 50 million shares of Coca-Cola stock after reports emerged of the soft drink giant violating labor and environmental laws around the world. With the motto, ‘We serve those who do good,’ TIAA-CREF bills itself as a socially responsible financial services firm. So when KLD Research & Analytics, which rates corporations on their social responsibility, dropped Coca-Cola’s ranking, TIAA-CREF decided to divest.
“Corporate Social Responsibility, or CSR, is a controversial subject. Since at least the 1970s, when Milton Friedman and a group of like-minded economists launched the ‘shareholder value’ revolution, most companies have viewed maximizing profits for their investors as their primary responsibility. In recent decades, though, critics have argued that shareholders are just one group among a corporation’s many stakeholders — including the firm’s employees, its customers and the communities where the firm does business. All of the stakeholders deserve to benefit from the firm’s success, this argument goes, not just the stockholders.”
LBS
Why Leaders Invest So Much In Failing Strategies
News from London Business School
“British retailer Marks and Spencer (M&S) was a high-street king in the 1980s, with more than 500 stores, 13 million weekly shoppers and a £1 billion+ annual profit. But the clothing, homewares and food seller has struggled more recently, with plans to close 100 of its 300 outlets by 2022, leading to thousands of job losses.
“What happened in two decades? M&S stuck rigidly to selling British-made garments as oversea competitors such as The Gap, Zara and Hennes & Mauritz (H&M) brought new fashions from around the world to the UK. The management also placed too much faith in its St Michaels brand – based on M&S founder Michael Marks – investing in print and TV adverts for new store openings rather than branding or new products.”
UCLA
Advancing The Study Of Using Future-Self Images To Alter Behavior
News from UCLA Anderson School of Management
“The human desire to beat back the inexorable march of the aging process is big business. By one estimate, global producers of anti-aging lotions, potions and medical procedures raked in $250 billion in 2016, and are on pace to generate more than $330 billion in revenue by 2021.
“Fooling everyone else about one’s age may be fine, but fooling oneself can prevent one from taking steps to plan for the future. A driver of this dynamic is the difficulty of practicing delayed gratification; saving a dollar today for the future is a lot harder than spending that dollar, especially when you are working hard to stay disconnected to your future self.
“Behavioral research has begun to explore how to help us bridge our aging gap as a way to encourage us to make better choices for our future, older self.”
INSEAD
The Fine Line Between Stubbornness And Stupidity
News from INSEAD
“Stubbornness isn’t necessarily bad and can in fact be a virtue. Sometimes, as history has shown, people do the right thing by remaining steadfast to their beliefs. Take the example of Charles de Gaulle. General de Gaulle refused to admit defeat after France was overrun by Nazi Germany during World War II. Against overwhelming odds, he persuaded the French that they would ultimately prevail. His unwavering belief in the greatness of his country helped him turn his vision into reality. After the war, President de Gaulle managed to secure a permanent seat for France on the United Nations Security Council. His determination earned France respect on the global stage.
“At times, it is only by being stubborn that we can bring a great idea to life. Stubbornness makes us persevere. It helps us stand our ground when everyone else is trying to tell us that we are wrong. Used with discernment, stubbornness can be a strong leadership quality and a key determinant of success.”
Wharton
Comcast Is Paying Up For Sky: Now What?
News from The Wharton School at the University of Pennsylvania
“By most Wall Street measures, Comcast is overpaying for its acquisition of Sky, the British satellite TV, broadband and mobile services provider. When the U.S. cable giant announced last month that it had won the auction for a controlling stake in Sky by bidding $40 billion, shares of Comcast fell by as much as 8% intraday amid a slew of analyst downgrades. It now might have to pony up more money to buy Fox’s stake in Sky to get full ownership. ‘It’s an extraordinary price,’ noted Mike Fries, CEO of rival telecom and satellite TV services provider Liberty Global, on Bloomberg TV.
“’If you look at any kind of metric that people are taught in business school, yes, they overpaid,’ said Erik Gordon, a professor specializing in mergers and acquisitions at the University of Michigan’s Ross School of Business, on the Knowledge@Wharton radio show on SiriusXM. But if transformation is the goal, then the price paid for Sky could very well be justified. ‘If what you are trying to do is transform your company, and you think you have to make a dramatic move, maybe you are doing exactly what you have to do to face the future.’”
Kelley School secures $1.28M Title VI grant to support international programs
News from Indiana University Kelley School of Business
“Indiana University’s Kelley School of Business announced that its Center for International Business Education and Research has been awarded a $1.28 million Title VI grant from the U.S. Department of Education.
“For more than a quarter century, Kelley’s center has supported a national goal of the CIBER program to advance the study and teaching of international business and to support research that helps the United States remain competitive in the global marketplace.”
(LtoR): Governor Charlie Baker, President Lawrence Bacow, Seth Klarman, Beth Klarman, Dean Nitin Nohria. Photo: Susan Young
Klarman Hall Opens With Fanfare And Substance
News from HBS
“Harvard Business School (HBS) opened its new 1000-seat convening space — Klarman Hall — with a dedication ceremony and symposium last Monday, October 1. The ceremony included remarks by HBS Dean Nitin Nohria, Harvard University President Lawrence S. Bacow, and Massachusetts Governor Charlie Baker.
“’Seth and Beth Klarman embody what we hope to see in every HBS graduate — active, engaged citizens working to make our world, our community, a better place,’ said President Bacow. ‘We celebrate today a space that I hope will be the site of countless interactions among faculty and students and staff as well as many, many people from the world beyond our walls.’”
Tuck Study Shows Firms Can Benefit From Powerful CEOs
News from Dartmouth College Tuck School of Business
“From Elon Musk to Mark Zuckerberg, some chief executive officers have more control over their companies while others have less, but does it make a difference?
“A recent study conducted by Tuck School of Business professor Gordon Phillips and finance professors Minwen Li and Yao Lu of Tsinghua University in Beijing, China has found that powerful CEOs add significant value to firms engaged in competitive product markets.”
NYU Stern
NYU Stern’s Creative Destruction Lab Selects 27 Startups For Its Launch Cohort
News from NYU Stern School of Business
“Last fall, NYU Stern School of Business announced the establishment of the first Creative Destruction Lab in the United States — CDL-NYC — to support the commercialization of early-stage science and deep technology startups. CDL-NYC received a landslide of applications for its inaugural 2018-19 cohort from founders associated with some of the top research institutes and academic institutions worldwide. CDL-NYC accepted 27 ventures with an admission rate of less than nine percent, becoming the most selective program in the CDL network. CDL-NYC’s founders aim to commercialize disruptive inventions in a variety of fields such as artificial intelligence, robotics, material science, therapeutics and medical devices.
“The nine-month CDL-NYC program links experienced entrepreneurs and investors with venture founders to help scale their ventures through a structured, objective based mentoring process. The program also leverages NYU’s position as a world-class research university in business, technology, medicine, science, analytics and engineering to provide venture founders support on key technical milestones from NYU’s scientists, faculty, and economists. An affiliated CDL-NYC MBA course gives select students direct access to the venture development process as the students work directly with the venture founders. Finally, CDL-NYC’s corporate partners provide pro bono services, such as legal and accounting advice, to the startups. The CDL-NYC program is based upon the successful Creative Destruction Lab model founded at the University of Toronto.”
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