A media darling of sorts, UCF economist Sean Snaith's presentations across Central Florida tend to be an 80/20 mix of economic forecasting and comedy sketches. But the Director of the UCF Institute for Economic Forecasting means business - his forecasts have been named one of the nation's most accurate. This episode takes a "behind-the-scenes" look at Snaith's forecasting methods while exploring his thoughts on the state of the Florida economy in 2020.

 

Featured Guests

Sean Snaith - Director, UCF Institute for Economic Forecasting

Erika Hodges - Director, Communications & Marketing, Barry S. Miller College of Business

Jessica Dourney - Assistant Director, Outreach & Engagement, Barry S. Miller College of Business

Episode Highlights

1:48 - Paul Jarley introduces Sean Snaith

2:37 - What the Florida economy is going through

3:28 - Commentary from the "Mean Girls"

4:14 - Florida's housing market

07:04 - Sean Snaith: "King of the Nerds"

11:09 - Growth by industry in Florida

15:06 - Job and population growth in the state

17:01 - Questions from the audience

21:30 - Paul Jarley's final thoughts

 

Episode Transcription

Paul Jarley:                         Sean Snaith is central Florida's favorite economic forecaster. Sean has been named one of the nation's most accurate forecasters by Bloomberg News and as appeared on pretty much every media outlet from the Wall Street Journal to the BBC. But he has some very strange hobbies.

Sean Snaith:                       If you've heard me speak over the years, you know I have an affinity for SkyMall.

Paul Jarley:                         You remember SkyMall, It's the defunct inflight shopping catalog that survives on the internet. Well, Sean, he might just be their biggest fan.

Sean Snaith:                       The Dean called it a fetish, I think, last year, which, that sounds a little dirty.

Paul Jarley:                         He's also a bit of a diva who dreams of becoming a viral internet sensation?

Sean Snaith:                       So, everybody can't be a social influencer though. I mean, I think that's where they all want to be. I do too. Quite frankly, I've got 1300 on Twitter. I don't know what I can offer to them, but.

Paul Jarley:                         And he hates being handled, especially by the college's so called mean girls.

Sean Snaith:                       There's a group of, largely women, in the college of business and there'll be shaking you down for money here at the end of the event, but I like to refer to them collectively as the mean girls and they sort of followed me since middle school and they make fun of my clothing and my glasses and things like that.

Speaker 3:                           I don't know if you've seen his PowerPoint slides, but we think they date back to the mid 1980s.

Paul Jarley:                         Is Sean Snaith really worth all this trouble? Are those forecasts right? Or do those mean girls have a point?

Speaker 4:                           That is so fetch.

Speaker 5:                           Gretchen, stop trying to make fetch happen. It's not going to happen.

Paul Jarley:                         This issue is all about separating hype from fundamental change. I'm Paul Jarley, Dean of the College of Business here at UCF, I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, is this really a thing? Onto our show.

Paul Jarley:                         This podcast is a condensed version of a talk Sean gave at our recent Dean Speaker Series, where he provided his economic forecast for both the US and Florida economies. Since Sean had already weighed in on the US economy as part of our podcast on whether the 2020 recession is really a thing, we focused today's show on his predictions for the Florida economy. We're calling this the mean girl edition because I've given the team the opportunity to take you behind the scenes and play some of Sean's comments into context. Listen in.

Sean Snaith:                       No, no wohoos. Nope. Well thank you for coming out. I see a lot of familiar faces, all members of the greater Orlando masochist club apparently. But welcome back and happy new year. I appreciate you getting up early to listen to my nonsense here for a little while. But we just released our Florida Metro forecast and I sort of recounted my youth, growing up, literally, physically, I was always kind of tall and in order to get tall you have to grow. Sometimes that occurred in big spurts and it caused me a great pain in my knees. Right? Like I would get these lumps and it just hurt because of the growth plates or whatever. I'm not a real doctor, but the condition is called Osgood Schlatter disease. So I think what Florida is going through right now is an economic version of Osgood Schlatter, growing pains. Our two achy knees are the housing market and our transportation infrastructure and they're not unrelated.

Paul Jarley:                         We begin our mean girl commentary with Jess and Erika. They work with Sean on a regular basis and they've got some stories to tell about our favorite economist.

Jessica Dourney:              His wardrobe is either, I woke up, I'm going to speak at a presentation dressed to the nines with a suit and tie, or it's Birkenstocks on with socks, cargo shorts and an old tee shirt from North Dakota where he's from. Or where he lived.

Erika Hodges:                    He likes a good crowd. To his credit he definitely, he draws a pretty good crowd on his own. But yeah, he is aware of how many people are in the room, and he asks about that often.

Jessica Dourney:              Well, he's also been called the silver fox before.

Paul Jarley:                         Jess and Erika are two of the original college of business mean girls. Back to the presentation.

Sean Snaith:                       So the housing market, things are going great in the sense that prices continue to rise at a pace more than twice overall inflation. You can see sales here above where they were at the height of the housing bubble. Median prices continue to rise. They're higher than they were at the height of the housing bubble. So this is a pretty, pretty solid housing market. Sales continue to rise year over year. Prices, you can see, statewide up almost 4% year over year. Again, is this another housing bubble? I get this question and we've probably addressed it the past three years and I'm going to give you the same answer. No, it's not a housing bubble this time around. I mean I know Florida, man you can't put it past them to do it to themself again.

Sean Snaith:                       But a 3.6 months of inventory, and I don't know if my colleagues in the real estate school would agree with me, but I think six to nine months depends when you talk to, of inventory, is a balanced housing market. So anything less than that, six months of inventory is what the realtors in the room would call a sellers market, to what the economics professors would call a shortage. In markets where there's a shortage, what happens to price? Yeah, that's right. You didn't know there was a quiz there was. The bigger the shorters, the faster prices rise. So if you look around the state at different metropolitan areas, Tampa's a good example, their inventories under three months, and they have some of the fastest price appreciation in the state. So there is a real shortage in the housing market.

Sean Snaith:                       The other thing that's absent this time around that was there in 2004/05/06 that really fed the beast, if you will, is easy money. You cannot just walk in and get a mortgage the way you could in 2005 without a job, without assets, without anything. So in absence of that easy finance and in light of the fact that we do have a real shortage, the price appreciation that we're observing to me is not something that's alarming. It's just a sign of an absence of supply.

Sean Snaith:                       Here in Orlando, it's even worse. 2.6 months of inventory. Population growth remains very strong. Economic growth, job growth, all very strong in Orlando. It is one of the fastest growing job markets in the country, certainly in the fastest in the state of Florida. That continues to put upward pressure on prices. This low inventory. We have an influx of population. We saw from Puerto Rico, the wake of fiscal economic crisis compounded by Hurricane Maria, and now they had an earthquake. Geez, I don't know how Puerto Rico got God mad, but some something's not right. But I wouldn't be surprised to see another influx, in the wake of this latest natural disaster.

Paul Jarley:                         Jess and Erika, there's some of Sean's toughest critics, but it's all in good fun and they try not to hurt his overly sensitive feelings.

Jessica Dourney:              When we had the AUBER conference, we went to Medieval Times and he was actually knighted and was known as the homecoming King of the Nerds. So the nickname has stuck, King of the Nerds!

Paul Jarley:                         Most economists, by the way, well they don't really have feelings, but Sean, back to the presentation.

Sean Snaith:                       All this population into the area, it continues to put pressure on the housing market. So affordable housing is one of the major challenges that we face right now. It's not unrelated to transportation. How did we get so far behind the curve? Well, builders in 2013/2014, and again in 2015/2016, sort of plateaued when it came to housing starts, and you could see that in the bars. There's this kind of a flattening out for a year or so and then they picked up again. But during that entire time period, the demand for housing continued to grow robustly. From 2012 on,...

In the midst of the longest economic recovery in American history, the big question is when the next recession will hit. With unemployment reaching record lows, job growth skyrocketing and consumer confidence at an all-time high, some economists see no end in sight for the expansion that began in 2009. On the other hand, manufacturing is at a 10-year low while the U.S.-China trade war continues. Can the U.S. really avoid a recession in 2020? Or is the bubble about to pop?

 

Featured Guests

Glenn Hubbard '79 - Economist; Chairman of the Board, MetLife Inc.

Sean Snaith - Director, UCF Institute for Economic Forecasting

John Solow - Kenneth White and James Xander Professor in Economics, UCF College of Business

Sami Alpanda - Associate Professor, Economics, UCF College of Business

Episode Highlights

0:48 - What's most likely to cause a recession?

2:38 - Where the U.S. economy currently stands

4:29 - Thoughts from a microeconomist

6:20 - How consumers play into today's economy

9:06 - The role of political tension in the economy

11:18 - Paul Jarley's final thoughts

 

Episode Transcription

Transcription coming soon!

Listen to all episodes of "Is This Really a Thing?" at business.ucf.edu/podcast.

A lot of people don't really like change. But can they be coached or managed through the change process to understand and truly appreciate its benefits in the workplace? Guest host Thad Seymour, Interim President of UCF, introduces a panel of staff members from Addition Financial to discuss their recent re-brand initiative and what they learned from undergoing a massive, company-wide change.

 

Featured Guests

Thad Seymour, Ph.D. - Interim President, University of Central Florida

Jordan George - Head of Leadership & Talent Development, Addition Financial

Christina Lehman - Marketing Manager, Addition Financial

Kerby Pickens - Manager of Leadership & Talent Development, Addition Financial

Episode Highlights

0:39 - Introduction from UCF Interim President Thad Seymour, Ph.D.

2:26 - The difficulty of change within an organization

8:22 - How to implement change

16:27 - What makes people resistant to change?

19:34 - "How Stella Saved the Farm"

29:20 - Common mistakes to avoid as a leader

40:27 - Addition Financial's experience with change

46:36 - Thad Seymour's final thoughts

 

Episode Transcription

Jordan George:                 We're really excited to dive into this topic around changed management. Something that I know that you have overseen a lot in your time at UCF and certainly we're experiencing a lot internally right now with the name change from CFE to Addition Financial. Getting ready for an acquisition in the next couple of months here. So as we think about change and how disruptive it can be, why is effective change management so difficult?

Paul Jarley:                         Well, the short answer is people don't like change. It's uncomfortable for them. But if you drill down into it, I think it comes down to a few things. If your change is very fundamental, a lot of people came to the organization, they were attracted to it maybe because of a specific mission or set of values or culture that you have. And if they see that change is threatening those things, they can have a very emotional reaction to that. People care deeply about those things. And they feel like they fit in an organization. And if they think that change threatens their fit with the organization, that can be a pretty traumatic experience for them.

Paul Jarley:                         Secondly, organizations develop compensation systems and other kinds of reward systems that are in place to encourage the kinds of behaviors and outcomes that they want. And people know whether they're winning or losing under those systems. Or perhaps they've come to be comfortable with wherever they are kind of in the hierarchy of that system. And if those initially proposed change is going to threaten that they get pretty nervous about that. That's their livelihood, at one level, and that can be very disconcerting. Another real problem here is generally in a change process, the costs of the change are borne first by people. They're really well known and they're at a minimum irritating and maximum kind of threatening to their security. The benefits are all about the future. And those are kind of fuzzy and they're kind of unknown.

Paul Jarley:                         So unless you have a change that's being motivated by something that's really compelling and urgent and threatens the entire organization, and it's just going to force a change, people tend to focus on the cost side of the change, rather than the benefit side of the change. If you're a leader in the organization, the hardest thing I think it is for a leader to do is to get people to see a future they have yet to experience. That's really, really difficult for people. And if they don't see that future experience as something that's going to benefit them personally, they're going to resist it.

Jordan George:                 I like what you said about, we receive the cost of the change before we receive the benefits of the change up front. There's that initial reaction of seeing what this is taking away or how this is going to make my life more difficult, or how I'm going to have to adjust, even if ultimately the outcome down the road is really going to be a positive one. I remember we went through that a couple of years ago, we went through our core system conversion and everybody who was here then just let out of collective sigh. But it was a really stressful time for a lot of people who had been here for a while, because you're basically taking the core system that everybody operates on day in and day out, and changing it up. So your day to day is changing, even though the new system was radically better. There were a lot of people who were just really hesitant to let them go.

Paul Jarley:                         Absolutely. I think that happens a great deal. And no leader comes into it to announce a change initiative and says, "We're going to work less now."

Jordan George:                 I've yet to hear Kevin Miller say that.

Paul Jarley:                         That's just not how that works.

Jordan George:                 Yeah, right. So Christina, you came in at a time when Dean Jarley was talking about how the culture shift changes and how people as they come into the organization may be attracted to one thing, then that's changing. And that seems a little threatening. But you've come into the organization at a time when we were already changing. You came in right at the height of our brand redesign. So what was that like for you?

Christina Lehman:           I did. I just started six months ago. So I started here as CFE but entrenched in the middle of this rebrand. I'm not only learning about CFE and me, but then I'm also in the process of who's Addition Financial and what does that mean for us as an organization because I'm learning two organizations at the same time. But there's so many people, so many team members in our organization that have been here for so many years. So I can't even imagine how that change must have been for them. And I think something that makes it easier is just trust. And Kevin Miller is really big on communication, and communicating, and speaking about the change, and he's wrote so many emails and so many week and x about this, and I think that really helps the growth and understanding of why we did it.

Paul Jarley:                         Well, that's that's absolutely true. The first part of any change process is to explain to people why you're doing it. And honestly, you have to explain that to them until you're sick of hearing yourself explain that to them. And then you should explain it to them some more.

Christina Lehman:           Yes.

Paul Jarley:                         That's just about how that is. The why is really important. And the deeper the kind of change that you're going to make, the more compelling the why needs to be right. It's one thing to say we're going to change how we're doing certain things. And people might be uncomfortable like that, like with your IT system. At least they knew that the old system might have been terrible, but they understood the rules of engagement with the old system. And now you're changing the rules of engagement, that's going to cause some friction. But that's a very different thing than coming in and to people, "We're not going to be something different than we were before."

Kerby Pickens:                  And so, Dean Jarley, change can be seen as something disruptive or something scary. So how do we implement successful change?

Paul Jarley:                         Well, it's a long process to be quite honest about it. And it's one that's fraught with a lot of difficulty, but explaining that need for change is kind of the first step. What's the compelling reason for the change? And sometimes that coincides with a leadership change. Frankly, that happens a lot. And it can happen for two different kinds of reasons. Sometimes the board will identify a need and understand that they needed a different leader from the kind of leader that they had before in order to implement that kind of change. And it's not uncommon in that situation for that leader to come from the outside. Sometimes they come from the inside. But it's almost certainly the case that the new person is the opposite to the last person. I was the opposite of my predecessor and I've known Kevin and Joel a little bit. Yeah, not the same guy. We can all agree. They're just not the same person. I know I interact with both of them very differently. Right.

Paul Jarley:                         If you come from the inside, you said something really important a minute or so ago. People kind of know who you are and there tends to be more of a trust factor associated with that. When you're a leader and you come in from the outside nobody trusts you.

Christina Lehman:           Yep.

Jordan George:                 Christina goes, "Yep."

Paul Jarley:                         Well, that was my situation. So one of the things in that situation that you have to do is you have to borrow somebody else's trust. And the way that you do that, once you've got your idea for change and why it's important, and you can articulate what that is, you have to get your top leadership team kind of aligned on. So you need to hash out any concerns that you have before you're going to take that public. If you're coming in from the outside, you should do an assessment of who on your leadership team people do trust. Because you know what, as soon as you say something, they're going to go right to that person.

Jordan George:                 Yeah, that's a great point.

Paul Jarley:                         And a lot of times they'll run to that person because they want to test whether or not they can say something to me as the leader in that situation. So if that person isn't on board, that's a real problem. But even more generally, inconsistency is a killer....

With new technology comes new ways to shop online and find a good deal, but retailers also have new tools at their disposal to charge customers higher prices. "Retail guru" Anand Krishnamoorthy discusses how retailers exploit consumers' lack of knowledge to charge higher prices and how shoppers can beat retailers at their own game this holiday season (and on Black Friday).

 

Featured Guests

Anand Krishnamoorthy - Associate Professor of Marketing, UCF College of Business

Episode Highlights

1:10 - Opaque Selling

4:11 - Examples of opaque selling in the marketplace

10:59 - The truth about "list prices"

14:25 - The shopping experience and its influence

19:51 - Price matching

27:52 - The New York Times: Charging more for less?

35:13 - Variable ticket pricing

39:33 - Paul Jarley's final thoughts

 

Episode Transcription

Anand Krishnamoorthy:               This is something that many of us on the State side may not be familiar with. Eurowings is a German low cost flyer that doesn't even tell you what your destination will be, before you pay up. You will not know where you're flying to until you pay up.

Paul Jarley:                         Here's a tip for value conscious holiday shoppers everywhere. You probably don't want to buy two tickets on that airline. This show is all about separating hype from fundamental change. I'm Paul Jarley, Dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, "Is this really a thing?" Onto our show.

Paul Jarley:                         Everybody knows that person who will go to great lengths to get a deal, but is a deal ever really a deal? We're bringing back our retail guru, Anand Krishnamoorthyorthy to explain to you that a deal, well, probably isn't really a thing. With pricing games, there's always a loser and Anand explains, that's usually you, listen in.

Anand Krishnamoorthy:               What I'll do today is talk about three broad topics in pricing games. The first of which is what we refer to as opaque selling, where product attributes are hidden. Then we'll talk about where pricing cues are hidden. We'll start off with something that firms do a lot of, which is cost plus pricing. Some of you are familiar with this term, at least you've used it in the past, which is, you figured out your cost, tack on a markup, and then figure out your price based on that.

Anand Krishnamoorthy:               Many firms practices, but if you ask them, they will not admit to it because it's a decidedly unsophisticated way to price. So why is it a problem? Let's start one, you're pricing based on things that consumers have no idea about. Consumers usually don't know what a firm's costs are. Even if they knew, why would you care? Why would a firm's production process of manufacturing plant factor into how much you'd be willing to pay?

Anand Krishnamoorthy:               As a way of maybe channeling venture payroll's book, it's because costs don't care about consumer feelings. Costs are based off of things that consumers don't care about at all. It is consumers wanting benefits, consumers wanting other attributes, et cetera, rather than costs.

Anand Krishnamoorthy:               To put it another way, if I'm inefficient, and I work for you and I take three days to do a job that you expect done in one, would you pay me three times as much? No. Then why would you expect firms to pay for consumers in terms of costs? Consumers do not want to compensate firms for their ineptitude, why would you expect cost to drive pricing?

Anand Krishnamoorthy:               So then perhaps better ways to price would be, price based on consumer benefits. That is, figuring out what consumers want, price based off of that. Consumers would want that, ideally. The problem is, consumer benefits are very hard to figure out. In fact, many a time, consumers themselves have to be educated before they can learn the benefits of using products. If it's hard for one consumer, it's even harder for so many different types of consumers who want so many different things in products. So then perhaps, the right way to price should be based on what a consumer is willing to pay.

Anand Krishnamoorthy:               Problem is, you can't sell everything at an auction. So short of that, how do you figure out what each consumer is willing to pay? And as an example here to the second point, let's say I know that the people on the left side of the room are willing to pay $50 for something. The people on the right side are willing to pay $70 for something. If I were to charge $50, all of you will buy. But the people on the right have gotten a price cut of $20 when they did not need one. If I charge the price for the people on the right, none of you on the left will buy.

Anand Krishnamoorthy:               So the idea is to figure out what we can do so that everybody buys, but at different prices based on different tokens of attributes. That is what we refer to as, price discrimination or differential pricing. Understanding what consumer preferences are like and charging different prices based on their willingness to pay.

Anand Krishnamoorthy:               All right. So three topics I'll take up here. The first of which is opaque selling. Many of you have experienced this. So a couple of examples to lead you through that. Opaque selling is where some product attributes are hidden from consumers. A common example is Hotwire with its Hot Rate hotel. You see that a number of choices are revealed to you, but, which hotel you'll be staying at, is not revealed to you. You know the price you'll be paying you per night. You don't know, which hotel you'll be staying at.

Anand Krishnamoorthy:               This is something that many of us on the State side may not be familiar with. Eurowings is a German low cost flyer that doesn't even tell you what your destination will be, before you pay up. So you pay up and then you'll figure out where that destination might be. Just so you know, it flies too many cities in Europe. It's not just one or two cities. It's flies to 50 cities in Europe, but you will not know. Their blind booking is where you will not know where you're flying to until you pay up.

Anand Krishnamoorthy:               This is not just in airlines. It's also common with service providers or hotels themselves. And you've seen many cases where bed type may not be guaranteed, or the type of room may not be guaranteed, with a rental car it'd be manager's choice where the manager decides what kind of a car to provide and so on.

Anand Krishnamoorthy:               Anybody know what this is? So this is a case where what you get in the bag can be one of six different SpongeBob Minifigures. Squidward, different Spongebobs, well Mr. Krabs, what have you. The idea being, you will not know what is in the bag until you pay up and rip up the bag. It's called a blind bag. You will not know what is in there. It could be one of any six of these. It's not easy to figure out because these are all common small Lego blocks. You can't feel and figure out what's in there.

Anand Krishnamoorthy:               But if you have a kid, you know that the kid is not going to be happy with any one of these. The kid wants just one of these, perhaps the Squidward, or squiliam, what have you. So then the point is, how does one deal with this? Because are you going to buy hundreds and play the odds? Because they themselves tell you that some of these are ultra rare, mega rare and all that. So it's next, and your kid wants that, that's for sure. So how then do you play the game? That is what we call opaque selling, where product attributes are hidden from consumers. Only after you purchase, will you find out what you get in the product.

Anand Krishnamoorthy:               Usually, it works for what we call deal seekers. That is, if you don't have strong preferences, that is, if you don't care about the type of hotel you'll be staying at, you only care about the price per night, or you only care about free breakfast, et cetera. When you don't have strong preferences, that's perhaps when this works. It enables firms to price discriminate. We'll talk about that a lot in some time.

Anand Krishnamoorthy:               What are the challenges for consumers and for firms? For consumers, the biggest challenge is one, the satisfaction that is, invariably you buy something that you don't like after the fact. So let's say for on Priceline you book a flight and then you find out that it has two layovers in God knows where. So the point is then there's a lot of dissatisfaction. You don't get what you had hoped for. Usually, in all of these cases, there is no refund or return. So if you're unhappy with it, you cannot return the product. Consumers don't like that kind of uncertainty.

Anand Krishnamoorthy:               For the firm, a lot of pricing is predicated on product differentiation. That is knowing that one kind of offering is better than another so that it can direct consumers to different types of offerings. Here, since the product is opaque, it's not differentiated.

Anand Krishnamoorthy:               How can we make it work? There are three broad ways how we can make it work. One is, you ask consumers what they want. When it comes to a flight, you ask consumers, "Are you willing to have two or more connections, layovers," et cetera. So when you do that, consumers reveal what they want or perhaps what they don't want and then dissatisfaction tends to be lower, and the firm can price accordingly. If the firm knows what consumer preferences are, perhaps pricing can be easier.

Anand Krishnamoorthy:               The other point, which you've seen a lot in our hotels and airlines is one of revealing some information, which is,...

Presidential candidates on both sides of the aisle point to a host of different factors for the state of the U.S. economy. With an economic recession on the way, renowned economist Glenn Hubbard joins UCF Business faculty John Solow, Sami Alpanda and Paul Jarley to discuss the hot topic of income inequality and when we can expect the current expansion to hit a wall. Is a recession really on our doorstep?

 

Featured Guests

Glenn Hubbard '79 - Economist; Chairman of the Board, MetLife Inc.

John Solow - Kenneth White and James Xander Professor in Economics, UCF College of Business

Sami Alpanda - Associate Professor, Economics, UCF College of Business

Episode Highlights

1:02 - Guest introductions

3:02 - Rising income inequality

7:24 -Technical disruption in the workplace

15:54 - Politcal response to a changing economy

21:00 - Trade wars

25:35 - Rising healthcare and pharmaceutical costs

29:46 - President Trump, politicians on the economy

33:41 - Questions from the audience

40:48 - Paul Jarley's final thoughts

 

Episode Transcription

Paul Jarley:                         The economy is a thing. The national election is a thing. But, the stuff politicians talk about on the way to Election Day? Well, those aren't always things. We've assembled a panel of experts. Listen up, people.

Paul Jarley:                         This year was all about separating hype from fundamental change. I'm Paul Jarley, dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, is this really a thing? On to our show.

Paul Jarley:                         This podcast comes from an event where we were celebrating Glen Hubbard, and his gift to endow a professorship in economics. Listen in.

Paul Jarley:                         I didn't want to resist the huge opportunity I had today to get together a panel to talk a little bit about the relationship between the economy and the political election that's coming up. So we're going to talk a little bit about whether a number of things are sort of a thing, or not in as non-political a way as we can here.

Paul Jarley:                         I have three panelists with me today to help me understand some things. Most of you know Glenn Hubbard. What you may not know is Glenn Hubbard is a graduate of our economics department at UCF. He studied here. He is currently the chairman of the board of MetLife and is the former dean of the Columbia Business School. He is still a professor there, and I like to joke with Glenn, after you're a dean, the comment that you always make is you get to go back to be part of the problem, right, and then, the part of solution, and he's enjoying that a great deal.

Glenn Hubbard:               Totally. Totally.

Paul Jarley:                         Right now.

Paul Jarley:                         Next to Glenn is John Solow. John is new to the college this year. He spent many years at Iowa. In fact, John and I were assistant professors together many, many years ago. And, he sits in the White, Xander endowed Professorship in Economics that Glenn and Glenn's wife, Constance, has funded.

Glenn Hubbard:               [inaudible 00:02:01].

Paul Jarley:                         And, it's not named after them. It's named after the two faculty members, who were most influential to Glenn while he was here becoming an economist. That's really awesome, and we're really glad to have John with us today.

Paul Jarley:                         My last guest is Sami Alpanda. Sami is an associate professor in the Department of Economics and spent four years?

Sami Alpanda:                   [inaudible 00:02:22] there? Yes.

Paul Jarley:                         Four years at the central Bank of Canada. So I thought he would also bring kind of a really interesting perspective to what we're going to talk about today.

Paul Jarley:                         And at the end we'll give you a little time to ask questions. I hope I ask some things that are on your mind, but if not, we'll give you a little bit of an opportunity to do that.

Paul Jarley:                         I've been watching the news, like all of you, and some of the debates and the things that are being brought up. So I'm going to do a little bit of a lightning round with the panel, where I'm going to bring up a particular issue that the politicians have been talking about. And I'm not so interested here in getting a political take on the issue. That's not what I'm about. Instead, what I'd like that panel to talk about a little bit is, how important is this issue to the economy in the short-term, and the long-term.

Paul Jarley:                         Let's start out with rising income inequality, particularly at the top. Is it a concern from an economy standpoint? Is it not a concern? What do you think?

Glenn Hubbard:               To me, the concern in inequality is the bottom, not the top. So I'm extremely worried about the earnings prospects of millions of Americans, who don't seem to be participating in an economy dominated increasingly by technological change, and globalization. I'm less worried about how many billionaires there are. The only reason that one would be worried about how many billionaires there are is, if you think there somehow monopolizing the political process. You told me there was one billionaire on the stage the other night at the Democratic Party debate, I don't think he's the most influential. So I'm more worried about the poor than I am the rich.

Paul Jarley:                         John?

John Solow:                       I think it's a long-term problem. I agree with Glenn that I'm more concerned about, so what economists call absolute poverty, is the ability of the poor people to have a standard of living that they can ... They can support a family, and they can enjoy, rather than the disparity. If everyone were richer so poor people could afford the necessities of life, that would be a good thing, even if there were rich people, people who are richer than that.

John Solow:                       I am concerned about the ability of the very wealthy and the very organized to influence policy. The impact of money on the political process, I think that is causing problems. I think, we've just seen a lot of it, and you can argue on both sides of the political spectrum, but there seems to be an awful lot of what we just think of as corruption, wealthy people using the political system to increase their incomes, not to do what's best for the country as a whole.

John Solow:                       Yes, there's only one billionaire, that we're aware of, running during the debates, and there's obviously a billionaire already running on the other side, but that's not where I think the problem is. It's not so much that they hold the offices, but that they pull the strings behind the scenes.

Paul Jarley:                         Sami?

Sami Alpanda:                   I do agree that, in principle, there shouldn't be a worry that we have more billionaires, or anything like that, but as long as the pie is growing at an enough pace, and that, that pie is being evenly, or at all levels, that growth is being shared. But currently, that's not the situation. So at the very top, at least in the last 30, 35 years, there has been an increase in the income share of the top 1%, from about 10% to 20% of total income.

Sami Alpanda:                   Now, most of this reflects capital income, especially entrepreneurial income, dividend income, but ... And for the top 0.1%, actually, I think the income share of the 0.1% has increased from about 4% to 9%. So this type of economic gains are not being shared, especially in the middle-income categories, and that ... In the long run, this is going to be worrisome because it will have political implications. It's already started to have political implications.

Paul Jarley:                         Sure.

Sami Alpanda:                   And that is a worry.

Paul Jarley:                         Go ahead.

Glenn Hubbard:               I think these things are all really important. I think your question's probably one of the biggest long-run questions for our country. I don't think we live in a world where the system is depriving people of gains from productivity, whoever those people are. I think, we have a lot of Americans, who do not have a marginal product that would lead to the wages that John is describing.

Glenn Hubbard:               If we want to fix that, and I think it's critical that we do, we have to use social insurance programs more aggressively than we're doing today, and we have to decide on our nation's priorities, is that what we want to do? We're running a government that's, principally, about old-age entitlements, things like that, and should we be investing more in working Americans. I think, we should. I think, it's a huge question.

Glenn Hubbard:               Who pays for that is a separate question. It could be the rich. It could be somebody else. But prioritizing those programs, I think, is critical.

Paul Jarley:                         Because here's what I worry about. I graduate 2,000 students a year from the College of Business, and I'm trying to prepare them for a future where data says to me, there going to have maybe two, or three careers. And we've seen, and I think, we'll continue to see a lot of technological disruption of a lot of those careers, and perhaps, a lot of structural unemployment. Biggest risk, you think?

Glenn Hubbard:               I think, it's a very big risk, and I think that there are two familiar ways to deal with it, and our country has done both in the past. One would be a sort of battering ram approach on opportunity, and I think there about Lincoln era policy....

Many successful people are sleep deprived, but that doesn't mean coffee and energy drinks are the keys to business success. In fact, these individuals are likely successful despite their lack of sleep — not because of it. Is shaving off a few hours of sleep really worth the extra time? Jeff Gish, Ph.D., Assistant Professor of Management at UCF College of Business, explains how sleep plays a pivotal role in the development of new ideas and business ventures.

 

Featured Guests

Jeff Gish - Assistant Professor, Management

Episode Highlights

0:46 - Paul Jarley's introductory thoughts

1:39 - The effects of sleep on entrepreneurship

8:58 - How does sleep effect the evaluation of ideas?

17:56 - Jeff Gish's sleep deprivation experiment

23:13 - Solving your sleep equation

25:05 - Questions from the audience

 

Episode Transcription

Paul Jarley:                         Tom Ford, fashion designer, gets three; Donald Trump says he gets three to four; Martha Stewart, under four; Jack Dorsey, founder of Twitter, four to six; Barack Obama, six. Successful people tell us if you want to get ahead, you need to work more and sleep less. It's the price of success, but is it?

Paul Jarley:                         This show is all about separating hype from fundamental change. I'm Paul Jarley, Dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, is this really a thing? Onto our show.

Paul Jarley:                         Today's podcast is from a Dean's speaker series talk by Jeff Gish. Jeff is a professor in our management department and is an expert in entrepreneurship. He hasn't just studied it. He's actually lived it. As an entrepreneur, he spent a lot of sleepless hours trying to get his business off the ground. His insights are really meant to be an intervention for my chief of operations, Tiffany Hughes. You all know a Tiffany. She's that person who never sleeps. She sends you calendar requests at three in the morning. She responds to your emails overnight. And she's at work before you are. If you plead with her to stop, she answers you with something like, "I just have to get this done." Mercifully, my Tiffany doesn't really understand Twitter, but does it really need to be this way? Or is this workaholic culture that we're all in just getting in our way? Listen in.

Jeff Gish:                             Let's get into this talk about sleep and entrepreneurship. And I've titled it, money never sleeps, but entrepreneurs should. That's very prescriptive. I hope that you agree by the end of this presentation, and I'd like to start off the talk with this quote from Ben Horowitz. Ben Horowitz is co-founder of Andreessen Horowitz. It's a VC firm over in the West Coast, but he's a former CEO too, a former founder. When he talks about his CEO experience or his founding experience, he says, "When I was a startup CEO, I slept like a baby. I woke up every two hours and cried." I share this quote because it's a little bit funny. It gets people engaged, but it's also very true. I had a business with 57 employees before joining the academic realm, and I felt a lot of pressure when I was an entrepreneur. And this person felt the pressure too, it was hard to sleep.

Jeff Gish:                             And on top of that, you feel like your business is so important. There's this tension in entrepreneurship that your business is so important that how can you sleep when you've got to keep things afloat and keep things moving. Ben Horowitz picks up on that in this quote, and I picked up on this with my coauthors that wrote this paper that was just recently published. Just the fact that entrepreneurs are of this culture that I'll sleep when I die, or sleep is for weaklings. I was a person who touted those messages as a small business entrepreneur. I always knew that there might be some ill effects of that, but I just kept doing it because I felt my business is really important. I think a lot of entrepreneurs fall into that category. I feel like this context is a good place to study sleep restriction and how that affects pursuits that are unique to entrepreneurial ventures.

Jeff Gish:                             All right. In order to talk about this, I've got to get through the theory part. All right. This is the academic portion. I draw on structural alignment theory, and I use a cliche picture of an iceberg, but it really fits in this instance. Structural alignment is how researchers have posited that expert entrepreneurs, and they do this by talking to entrepreneurs, how expert entrepreneurs make decisions about evaluating opportunities. If you think about alignment, you can think about two things. One thing being the market and a new technology that might be sold, commercialized to that market. Structural alignment talks about how similar those are to each other.

Jeff Gish:                             There are levels of similarity. The first level is superficial. These are just the features, objects and people. This market sort of looks like this business, or the people who are founding this business, so that's really superficial. That is not what makes the business go, all right. That's not what's important for the business, but superficial alignment that exists.

Jeff Gish:                             The next one is first order of structural alignment. That's the how and why a business might work for a particular market. And then even deeper than that is the potential benefits and potential problems that might exist. And if you can get to those deeper levels, you can do a better job at assessing whether an opportunity will be successful or not. That's the idea in structural alignment theory. So, remember this iceberg diagram because it will come back several times during the presentation. And if you can click once... The top, when I say superficial, I'm talking about the superficial alignment between a technology and market. And on the bottom we're talking about structural alignment, both first order and higher order. Those are both structural considerations about a market and a technology that is intended to be commercialized on that market.

Jeff Gish:                             I'm going to give you an example because that's really abstract, that theory. This example is asks you to look at, it's a business example, and I'll get to what the business is in a moment. What are some similarities between these pictures? Just think in your head. There aren't a whole lot. It's kind of a trick question. There is some orange in each picture. They're both walking toward us. But, excuse me. If you look at this picture, these are individuals who... They're NASA astronauts. They're shuttle pilots. And over a long period of time, they'd been selected over and over again as the best of the best of the best. So these are really long-tail individuals who have shown excellence over time. This is a middle school or high school, kids walking down the hall. You might have some brilliant individuals in there, but you probably have the whole spectrum of abilities and performance. As far as similarities go, there aren't many between the two. And so, superficially, on the surface, not much is going on there. However, I want to tell you about an example of where business from this area came over to the field of K through 12 education. All right. This slide or this picture, if you can't see it, it says, "Back to school special: Ritalin." I am by no means- Woo hoo.

Speaker 3:                           [inaudible 00:06:24] in a 12-step program.

Jeff Gish:                             That's great. I am by no means speaking derisively of Ritalin. It's helped a lot of people through a lot of, a lot of things, especially ADHD. But there are parents who would like to see a nonmedical solution to their kids' struggles with ADHD. I'm just setting that up as a context.

Jeff Gish:                             All right. Over here at NASA, these people do a very technical and demanding job. And when you're flying a shuttle, I know the shuttle programs have been canceled, but we're going to send people to space again. And when you're flying some a spacecraft, it's important that you pay attention. And so engineers who, I mean, there can be some catastrophic events that happen if you don't pay attention. Engineers developed a simulation tool for NASA pilots that put an EEG helmet on their head and monitored their attention. And in the simulator, if their attention wandered, it would make the controls harder to operate the shuttle. All right, so there's a real penalty when your attention wanders.

Jeff Gish:                             And so one of the engineers that developed this technology said, "Hey, are there other markets that this could apply to?" This person was thinking structurally, not superficially, and went over to these kids experiencing ADHD and parents who wanted to see a solution that was not medical. And so what he did was he partnered with the Sony PlayStation platform, and they still have to wear the helmet to... These are fairly expensive treatments, but they put the helmet on the kids and he developed a racing game where a kid's attention wanders. They have to go back and the controls become harder and they have to keep their attention focused on the screen in order to keep the car going down the road and driving appropriately and have the controls that they want to win the race.

Jeff Gish:                             Now you can argue whether that's a good idea to have kids who have ADHD to play more video games. I mean, I don't know. This was commercialized that received venture funding, and there was a strategic partnership made with Sony. All right, so this is an example where superficially kids and teens are not similar to NASA pilots,...

Everyone fails. It is part of life. Rather than pretend it won’t happen, you should count on it. We challenged our students to submit their best failure stories and explain the lesson they learned. Now you get to vote for your favorite.

 

Featured Guests

Petrice Cineus, Student

Sam Kotenko, Student

Kevin Velazquez, Student

Episode Highlights

0:38 - Failure Competition Introduction

1:43 - Kevin's failure story

5:54 - Petrice's failure story

16:26 - Sam's failure story

24:48 - Follow-up questions from Dean Jarley

 

Episode Transcription

Transcription coming soon.

 

Cast Your Vote!

 

Listen to all episodes of "Is This Really a Thing?" at business.ucf.edu/podcast.

With open banking, is technology creating a decentralized future of banking? Smartphone apps like Mint and Personal Capital paved the way for customers to access the entirety of their financial data in one place, but now, major banks are beginning to enter the open banking game. What are the repercussions for traditional banking institutions? What are the benefits and risks for consumers? And is this the beginning of the end of brick and mortar bank branches?

 

Featured Guests

Charlie Lai, EVP/CIO, Fairwinds Credit Union

Sumit Jha, Co-director, UCF Master of Science in FinTech

Christo Pirinsky, Co-director, UCF Master of Science in FinTech

Episode Highlights

1:55 - Panelist Introductions

2:55 - What is Open Banking?

9:05 - The current state of Open Banking

19:30 - Is this the end of traditional banking?

25:33 - Questions from the audience

What is the single most important problem being solved by open banking and who's problem is it?

Will open banking create a larger cybersecurity threat, or reduce the risk?

Is ransomware a concern?

Why should I hand over my personal data to these FinTech companies without any financial incentive?

33:05 - The biggest threat to Open Banking

36:05 - Dean Jarley's final thoughts

 

Episode Transcription

 

Paul Jarley:                         George Jetson, a man created in the 1960s to depict what life would be like in 2060. He lives in a city in the clouds. He drives a flying car that neatly folds up into a briefcase that he can carry into work. When he drops his kids off at school, he releases them in a pod that gently guides them to their destination. But when Jane, his wife, wants to go shopping, he tries to give her some cash. She takes his whole wallet. Cash, really? It's 2065 and George is still using cash. Maybe it's because nobody thought banks would innovate, or maybe it's just George's way of trying to control Jane's spending. Either way, it seems woefully out of date. George, my friend, do we have some stuff solutions for you. This show is all about separating hype from fundamental change. I'm Paul Jarley, Dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, is this really a thing? On to our show.

Paul Jarley:                         Today's podcast come straight from our Dean's Advisory Board meeting where we spent the afternoon talking about FinTech. The College of Business has partnered with the College of Engineering and Computer Science to launch a master's program in financial technology. Many of our board members have a keen interest in this topic. So we brought together a panel to talk about one of the many innovations in this sector, open banking. Today we're going to talk a little bit about a subject that I don't know very much about. I stumbled upon this a few weeks ago, which is often how we come up with ideas for the podcast, called open banking. And I have three people here who are going to help us understand what open banking is and whether or not it's going to be a thing going forward. So I'm going to ask each of our panelists to start off just by introducing themselves, and I'll start with Christo. Christo?

Christo Pirinsky:               My name is Christo Pirinsky and I am a professor at the finance department, and I'm also the co-director of the FinTech program that we just launched.

Paul Jarley:                         Sumit?

Sumit Jha:                           Yeah, I'm Sumit Jha. I am professor in the computer science department, and co-director of the FinTech program from computer science, and my area of research is artificial intelligence, and we work on a variety of problems funded by DARPA, National Science Foundation, and a variety of other agencies that do not want to be named.

Paul Jarley:                         Charlie?

Charlie Lai:                          Hi, I'm Charlie Lai, I am the CIO of Fairwinds Credit Union. I'm responsible for all technology and innovation for the credit union and ideally staying ahead of trends like open banking.

Paul Jarley:                         And Fairwinds has been a very strong supporter of our FinTech program. They've contributed a million dollars towards a professorship in FinTech and so we're happy to have you all here. All right, well let's start at the beginning. What the heck is open banking?

Charlie Lai:                          Actually, the year 1985 is apropos for this conversation because I think that's the last time that a bank has created something that's truly innovated. Maybe the debit card. It's probably inaccurate, but that's a good starter for a conversation around open banking. From our perspective, the conversation starts with level setting with what the definition of closed banking is. Banking as an industry hasn't really evolved out of a hundred year old, 200 year old model, where we have products and services that we think are important that you must have. And we make you come to us for how we're going to deliver them to you, and you must pay for them, and you have to like them, and you have to tell your friends that they're great so that they get them too.

Charlie Lai:                          That's changing pretty quickly, what we all have seen over the last 10, 15 years with the evolution of Apple, Facebook, Google, the power of technology has democratized the economy, much less financial services. And through technology, you actually can deliver financial services that are meaningful to the customer in a way that's much different than what banks deliver today. So, we see this as kind of a tremendous door opening to competition and evolving to something that's ultimately better for our customer.

Paul Jarley:                         Gentlemen, either of you want to weigh in?

Christo Pirinsky:               Op banking also more specifically refers to the idea of sharing of information, personal information of individuals across different... Information from different institutions. So, obviously data is very variable because there is information in it. If we observe how people shop, maybe we can advise them better about new products in the marketplace. If we observe how they spend money, or how they save, maybe we can advise them better to make better investment or consumption decisions. Unfortunately most of the data and information that people leave in the space out there, it's very dispersed. It's not concentrated. You have a credit card that you use and there is something variable in your statements that tell something about you.

Christo Pirinsky:               You have a bank account, you shop in Target, but this information just spread all over the place, and value could be created if this information is somehow concentrated, and if people are able to aggregate and consolidate all of the information that they leave here and there, and use it for data analysis. So that we can learn something better about them. And my understanding is that this is behind kind of the idea about open banking, how to create... It's more like a platform, similar to the internet, and refers to the idea of enabling people, individuals, somehow to aggregate and consolidate the information trays that they leave in the world out there so that it could be used for better intelligence.

Paul Jarley:                         I'm still having trouble getting my head around this, if I might. Why do I care if my data is concentrated? Go ahead, yeah, yeah.

Sumit Jha:                           Why open banking now? Why not in 1985?

Paul Jarley:                         Yeah, what's pushing for this? I mean-

Sumit Jha:                           Open banking is really now an opportunity. For the first time you have the internet, which is allowing you to move data very fast. You have mobile phones, which are allowing an average consumer to have access to this internet, and to move data around. So open banking is really providing us an opportunity to use data as the new oil. So now data is now the source of riches, and so now people have the power to use this data to actually create value from it. So I have been a user for an open banking platform for a couple of years now, and it is amazing to see the kind of data it had mined from multiple bank accounts, about you.

Sumit Jha:                           It can tell you that you are paying for the streaming service that you are never using, and I had been paying for the service for quite some time. So that level of data analysis is only possible when you have these multiple accounts coming in one place, going through very rich data aggregates, which is happening right now for two reasons. One, the internet and other massively parallel computing. So rise of GPUs, and neural networks, and AI is what is providing these companies the power to analyze your data better than in 1985.

Paul Jarley:                         Okay. Ultimately though, this is going to allow me the consumer to make better choices about the financial products that I'm participating in? Is that where this is at? Because who's pushing for this?

Charlie Lai:                          Yeah, and it really is stemming from this sense of competition, enhancing competition, and ultimately doing something better for the consumer relative to what's being provided by traditional financial institutions today. Today banks offer products and services, we create innovation, we create things that are really good for us, and sometimes they're good for the customer. The concept of this, making data available more democratically, now opens up a level of transparency that you can do some really interesting use cases, for example.

Charlie Lai:                          So, what if I had a view of all of my spending patterns, but also behaviors,...

United Launch Alliance CEO Tory Bruno chats with Dean Paul Jarley on the state of space exploration. 50 years after the Apollo 11 moon landing, rocket launch technology has drastically improved and the prospect of commercial space travel is almost top of mind. Can space tourism really become the multi-billion dollar market that some expect it to be? And are Cape Canaveral and the Space Coast ready for the demand? Is space ready to be the final commercial frontier?

 

Featured Guests

Tory Bruno - CEO, United Launch Alliance

Episode Highlights

3:18 - How Tory Bruno became CEO of United Launch Alliance

5:48 - How United Launch Alliance came to be

8:42 - What's it like being involved in the space industry during such a competitive time?

12:36 - How much cheaper can rocket launches get?

13:34 - What kinds of companies could be most successful in utilizing space travel?

16:33 - When will humans live and work in space? Engage in space tourism? Get to Mars?

21:27 - What's the most important thing to know about the commercialization of space?

23:20 - Questions from the audience:

Do you anticipate building things in space to avoid loss during launch?

How do you see real property rights being involved in space?

What's it like working with Blue Origin on the Vulcan engine?

Have there been any attempts to develop insurance for spacecrafts?

Does ULA have any plans to develop a heavy lift rocket?

Where did you see the space industry headed when you started your career?

Can you elaborate on the difference between components vs. propulsion?

Why does ULA exist?

34:35 - Dean Paul Jarley's final thoughts

 

Episode Transcription

 

Paul Jarley:                         There are certain moments in time that stay with you. I remember where I was 50 years ago today. I was 10 years old. I was on the beach at a lake near my hometown, clutching a radio, and listening to mission control. It was 4:18 in the afternoon when Neil Armstrong said-

Neil Armstrong:                Tranquility Base, here. The eagle has landed.

Paul Jarley:                         The beach erupted in applause.

Paul Jarley:                         This show is all about separating hype from fundamental change. I'm Paul Jarley, Dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, "Is this really a thing?" Onto our show.

Paul Jarley:                         The race to the moon was a race to glory that brought a much needed boost to democratic capitalism in its Cold War with totalitarian communism. But this was not the first time a group of explorers had set out for glory and to assert the political power of a government patron. Christopher Columbus comes to mind. There what started out as a search for glory, quickly turned to commercial interests complete with conquistadors searching for gold and pirates looking to steal it. Colonization and wars followed. Will history repeat itself? Is space ready to be the final commercial frontier? If so, can space pirates and colonization be far behind? Listen into my conversation with Tory Bruno. He's CEO of United Launch Alliance. In other words, a rocket man. He spoke to a group of business and engineering students earlier this year in The Exchange.

Paul Jarley:                         So how cool is that? So, for my engineering students, this is The Exchange. And the idea behind The Exchange is that we have a speaker in here every day talking to business students about careers, about their career path. About how they might become part of an industry, if that's what they're interested in doing. And today we have kind of a double purpose. So, for those of you who don't know me, I'm Paul Jarley, I'm Dean of the College of Business here. And my job is largely to think about what the college should look like five years from now and 10 years from now and how we're going to get there. All right? So I get to do this kind of a lot. I get to sit down with really interesting people who have interesting things to say and provocative ideas. And it's frequently the case that I'm sitting there during our conversation thinking, "Yeah, is that really a thing? Is that something that my students really need to know about? Or is this person just blowing smoke at me?" All right?

Paul Jarley:                         And so that's sort of the idea behind our podcast. I go out, I talk to people about various kinds of things and whether or not I think they're really a thing or not. And so Tory, who's with us today, who is the guy who runs that organization has graciously agreed to have that kind of a conversation with me along the way. So welcome to the College of Business, Tory.

Tory Bruno:                        Thank you. Happy to be here.

Paul Jarley:                         So I like to talk about people's careers. I think students get confused a lot. People think their careers are going to be really linear. And how I always tell them that that isn't going to be the case. Walk up to any five-year-old kid and ask them what do you want to be when you grow up? And if they say dean of a business school, you should run from them. Right? I mean, nobody says that. That's not how you get to be me. So I want to know, how do you get to be in charge of a rocket company, rocket man? How does that path work for you?

Tory Bruno:                        Well, I'll start out by saying I really had no interest in management when I started. I just want to be a rocket scientist and that's what I did for about the first 10 years of my career. And I always did want to be a rocket scientist. So if you had asked me when I was at a kid, I'm just old enough to remember seeing the first moon landing. And I was very inspired by that. So I always wanted to build rockets and I built rockets my whole life. I built my first rockets out of some 80-year-old, moldy dynamite I found in the back of my grandmother's barn. 10 fingers, for everybody in the room who can see. And so I went to work for Lockheed and I was just a rocket designer. I worked in structures, I worked in control systems. I was a ballistician. Then about 10 years in I thought, well maybe I will sort of reluctantly go into management. Because I could probably have a greater impact there and maybe help other people in their careers, as well.

Tory Bruno:                        And then it was a very traditional career progression after that. You know, I did program management and systems engineering back and forth of increasing complexity. But I'll say the one unique thing about it was that I always wanted to work on the most difficult problems. So I felt very inspired by the missions that we served. And so, if something was really in trouble and struggling, maybe other people were kind of fleeing that project because it was going pretty rough.

Paul Jarley:                         So, just to clarify for students, right? This was your missile bay period. Right?

Tory Bruno:                        Yes, that's right.

Paul Jarley:                         You were involved in missile projects?

Tory Bruno:                        Yeah. Yes I was.

Paul Jarley:                         And I think it's really helpful, right? In any kind of project like that to develop a mindset where... Things are going to go wrong. Right? And a lot of people do run from that. But the people who understand kind of that, "Well, that's just part of the journey." And solving those problems is really important.

Tory Bruno:                        Well, that's right. And especially if you're doing something that is technically challenging, or even just programmatically challenging, because there's an urgency or a need. Your country needs it, your team needs it, whatever it is. Then it's going to be hard and there will be setbacks. That's okay.

Paul Jarley:                         So ULA is a joint venture between Boeing and Lockheed? Could you tell me a little bit about how that came about and why?

Tory Bruno:                        Sure. So, first, let me start kind of at the back end of that with what does that mean? It does not mean that this is a combination. ULA is a stand-alone company. 12 years ago, people who worked at Boeing had to quit their jobs and be rehired by ULA. Same was true for Lockheed. And then Boeing handed over the factory and handed over the drawings to the Delta rockets. Lockheed did the same for Atlas, and a new company was stood up. There is a board of directors between us and those owners, but there are no commingled employees, facilities, anything like that. The intellectual property created afterwards belongs to ULA, it's just owned by our two... You can think of it as two shareholders. How did it happen?

Paul Jarley:                         Yeah, what drove that decision?

Tory Bruno:                        Yeah. So once upon a time there was an idea that there would be a gigantic telecommunications industry based in space. And so lots of companies facilitized for that. Lockheed developed the Atlas V, Boeing developed Delta IV, they still had Delta II. Spacecraft companies stood up whole divisions. And then people discovered that you can build out fiber optics on earth instead a lot more cheaply and the bottom kind of fell out. And there wasn't enough business for all of these companies. And Lockheed and Boeing consolidated what they had into this joint venture in order to make one viable launch business. It was also done at a time that the government desperately needed that. So what is not well known is that our country's sort of space infrastructure has fallen into a pattern of sort of all the satellites go up at once in a short span of years, which means they all age out at about the same time....

Some claim a company’s brand is its most valuable asset, while a logo can have a powerful impact on consumer behaviors. Household names like Coca-Cola, Tropicana and Gap are just a few examples of companies that have enjoyed tremendous success and endured rebranding failures. But how much can packaging, imagery and marketing tactics really inject new life into an unchanged product? And will a customer’s relationship with a brand really prevent them from buying into a competitor?

 

Featured Guests

Carolyn Massiah - Associate Chair, Department of Marketing, UCF College of Business

Episode Highlights

6:33 - What makes up a company's brand

13:58 - Why consumers form relationships with brands

17:55 - Reasons a company would benefit from a rebranding effort

29:11 - Tips to carry out a successful rebrand

40:56 - Dean Paul Jarley's final thoughts

 

Episode Transcription

 

Paul Jarley:                         FTU became UCF in 1978. Since that time would become the Knights, the Golden Knights, and the Knights again. Kentucky Fried Chicken became KFC in 1991. Backrub became Google in 1997. Deloitte added a green dot in 2003. Tropicana changed the packaging of its orange juice in 2009 and then changed it back. CFE Credit Union became Addition Financial in 2019. In all but the first case, I'm pretty sure some rebranding genius got paid a fortune. But seriously, does any of this really matter?

Paul Jarley:                         This show is all about separating hype from fundamental change. I'm Paul Jarley. Dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, "Is this really a thing?" Onto our show.

Paul Jarley:                         I've been known to tell staff in meetings that I'm not the dean of that. It's my way of letting people know that I think their issue isn't worth my time. I hit upon this phrase back in my days at the University of Kentucky. The college had just gone through a rebranding effort, and one of my colleagues didn't like our new stationary. He was refusing to use it, and he wanted me to tell the dean that he should get a pass. After listening to this for 20 minutes I told him that I refuse to be the associate dean of stationary and asked him to get out of my office. The phrase just stuck with me.

Paul Jarley:                         My marketing colleagues, on the other hand, would disagree with me. They think a company's brand is its most important asset and that any rebranding campaign is a process that is fraught with peril, like employees not embracing the change. Meh, maybe. Or maybe it's just a way for consultants to charge big bucks to help you design a new logo that they claim with rival the swoosh and make you the darlings of consumers everywhere.

Paul Jarley:                         A few weeks ago we hosted our last dean speaker series of the academic year, and given that our sponsor, CFE Credit Union, had just changed its name to Addition Financial, we thought it was the perfect time to have Dr. Caroline Massiah address the whole rebranding thing. It was such an engaging discussion that we decided to turn it into our latest podcast.

Carolyn Massiah:             I'm going to begin with a quick, funny travel story, and it will help us lead into the discussion.

Carolyn Massiah:             This past weekend I had to go, not had, I wanted to, I went to Boston. My goddaughter got married and, first of all, for those of us in Florida, when we travel anywhere, we forget that the rest of the world doesn't have the same weather all year around, so I experienced three seasons in three days in Boston.

Carolyn Massiah:             The other thing that happened, we get to the airport to return home and my teenage son and I, my husband was staying behind for business, my teenage son and I, we board the plane. We get on the plane. We do what I think is probably the slowest taxi ever. I'm thinking at this point I can walk to Orlando quicker. We get all the way to the end of the runway and then we sit there, and I'm thinking there must be many planes. But at the point the pilot has not said one word to us. All of a sudden you feel the plane make a deep U-turn, and I thought, "Oh my gosh, a delay, maybe a mechanical issue." We get back to the gate. When we're pulling up to the gate we see flashing reds lights, they open the door of the plane, Homeland Security gets on the plane. They take a man and a woman off in handcuffs. I can't even make that up. I'm like, "Oh my goodness."

Carolyn Massiah:             Then then pilot comes on and says, "Well, I don't know if you know, but since 9/11 we run the flight passenger list until wheels up, and we take a slower taxi if for some reason we are not able to clear a passenger's name from that security watch list, and if we still aren't able to clear them, Homeland Security has us return. We've deemed there are two people on the flight weren't safe to fly, and that's why we had to return."

Carolyn Massiah:             We finally took off, were supposed to land here Monday night at 10:00 PM, landed at 1:30. The best laid plans of travel. Why do I say that? We have several companies, including our host today, who have gone or are about to go through rebranding, and it's a journey.

Carolyn Massiah:             Most times when we travel we think about the point B, the destination. However, we find that when we travel, sometimes it's not the where, where we end up, the location where we end up, that will cause us the angst, the most pain, hopefully the most excitement and happiness as well, but it's the what of the trip, the why of the trip, and the how of the trip.

Carolyn Massiah:             When we talk today about navigating, rebranding, that's what I want to focus on. The first thing, whenever you go on a trip, you want to make certain that we're all on the same page or will go with the same map, if you will. I want to start with first talking about what is rebranding. The reason I say that is because, and I know I have a couple of marketing practitioners in the room and we all at times think, "I know, we're doing it now, I know what rebranding is", but sometimes we take a different view where I just want to help expand the view of what rebranding is.

Carolyn Massiah:             Then I want to talk briefly about some reasons why we would choose to go through this experience of rebranding, and then I'm going to finish up with five very quick toolbox methods you can take with you as far as how to do it in the most painless processes possible.

Carolyn Massiah:             In order to get on the same map let's first talk about brand. When I say brand to some people they immediately think of the logo, they think of a name, and we'll see in a moment that it's so much more than that. But what's important are two words here, the brand of your company, and we'll talk about what all that entails in one moment, the brand of your company identifies your company, the value that you're creating for your customers, how you're delivering that value, that's the brand, that identification. Even as important as identifying your own company, remember that a big role of your brand is to differentiate yourself from the competition and hopefully in a positive way.

Carolyn Massiah:             I just said that brand is a little bit more than a logo, so let's talk about some different elements of the brand when we're talking about brand because when I talk about rebranding, once again, I want to make certain we are on the same map.

Carolyn Massiah:             First and foremost, a big part of brand is the brand name, the brand name. We think about some brands that we see and we automatically have a thought about, if I say Nike you automatically think competition, sports, aggressiveness, achievement, winning, so already just in the brand name there is identification and definitely a differentiation from the competition. Here's the thing though, when we talk about brand we are going to expand our view because it's so much more than that.

Carolyn Massiah:             In this day and age we also have technology, social media, digital media marketing being such a big part of the brand. We've taken a URL and made it into a verb. Now in the Merriam-Webster dictionary Google is a verb. I'm actually putting money on the fact that within the next two years Uber will be a verb. We already use it that way, right? When we talk about google.com, amazon.com the URL is a very important part, a very important part of the brand.

Carolyn Massiah:             Logos and symbols. I'm [inaudible 00:09:03] talk about product and we're going to talk about people here. I talked about Nike. First, anyone know that way that we became a Nike school instead of Adidas school, UCF? I'll tell you really quickly because it's actually pretty interesting. It's truly a marketing story. We were an Adidas school and then two young men came to play here, came to play basketball, and their last name happened to be Jordan. Michael Jordan's sons came to play with us briefly. We were Adidas school, which mean Adidas had to tow. When the first Jordan player, the first Jordan son, playing his first game said, "I'll wear Adidas everything but I'm wearing Nike shoes. I'm Jordan." Adidas gave us an ultimatum, should the Jordan player take the court in anything but Adidas shoes, they'd pull the sponsorship. Talk about a marketing dilemma there for us, for Jordan the son, Jordan the father. Can you imagine the PR that will come from having the Air apparent be wearing Adidas shoes on the basketball court? Oh my goodness.

Carolyn Massiah:             The young man did take the court in Jordan shoes. Within 24 hours Adidas pulled their sponsorship. Nike got to come in like the knight in shining armor a