"Is This Really a Thing?" Podcast Archives - Barry S. Miller College of Business

Paul Jarley:                         When I worked at the University of Kentucky, I swore I would vote for any politician who could synchronize the stop lights on Harrisburg Road and cut my travel time to and from work. Smart city initiatives promise to make city life more efficient. But are people really willing to give up their privacy on the promise that Big Brother can cut down on their commute time or save them money on their energy bill? And honestly, if smart cities require smart politicians, I’m skeptical.

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? On to our show.

Paul Jarley:                         So about a year ago I was half asleep in a meeting of deans when somebody said the term smart cities and I hadn’t heard that before, so I wrote it down and I will have to tell you, my initial thought was, “Dang, those people in Silicon Valley have the best marketers in the world.” I mean, who could be against smart cities?

Paul Jarley:                         So I wanted to do some learning about that and what that really means and whether the marketing is far ahead of the reality or not and what it’s likely to do to my world and my students’ world going forward. So a couple of people have graciously agreed to join me today who have some opinions on it and I’m going to probe their opinions a little bit.

Paul Jarley:                         So, next to me is Craig Ustler. Craig leading the master development team for the Creative Village here in downtown Orlando. He is also co-developing several vertical projects at Creative Village, including a $105 million student housing project that’d better be ready by August 2019, or we will have a lot of homeless students downtown.

Paul Jarley:                         We’re also joined by Mike Hess. Mike is the smart city director for the city of Orlando. He’s a Leed fellow and mechanical engineer. He was recently brought on board by the city of Orlando to lead off their smart city efforts. He’s worked as the VP of smart and sustainable buildings for Panasonic Smart City team. And he has worked on several smart city projects across the US.

Paul Jarley:                         So, let’s start at the beginning. What the heck is a smart city? Craig, you want to?

Craig Ustler:                       There’s a couple answers. So one is sort of consistent with your experience. It’s become a buzzword that is somewhat self-invented through some marketing folks and real estate folks. And it means in theory, this idea that you’re going to use data driven or the Internet of Things and whatnot to connect everything and measure it and analyze it and make things more efficient.

Craig Ustler:                       I sort of choose to turn the term and I say cities are smart and suburbs are dumb. I sort of feel like the city by definition is smart, city and urban development is smart, and suburban development is inefficient and dumb. So in my view, it’s more of an urban planning question about how you arrange things to be smarter and more efficient, and then you use technology in what is I feel like a better arrangement of how you build a city.

Craig Ustler:                       And that sort of, to me, what a smart city is. It’s sort of, you start with city building a city design and then you overlay technology on top of that to make a really great place. Said a different way, you could build the smartest city in the world, but if it’s in a place nobody wants to live or it’s poorly designed or has a bunch of other attributes that don’t make it attractive, it’s really not ultimately gonna matter how smart it is. Right?

Craig Ustler:                       And I think technology and what Mike’s sort of background brings is part of being smart. So I think being able to use technology and analytics and data driven intelligence, I think that’s one form of being smart. I have a different term that I call urban IQ. But the idea of a city’s IQ is not just its sort of technology footprint and how smart it is, but there’s an IQ about being more cultured and being more diverse. It adds value to society.

Craig Ustler:                       So, so I tend to think about being a smart city is kind of like a technical degree. It’s like getting a master’s in engineering and being smart. Being a truly great city with a high IQ is a liberal arts degree. And it’s like being good at a bunch of things. So, I think you gotta be both to truly be a smart city. That’s my definition of it. That’s not the definition you were referring to, but that’s how I think of it.

Paul Jarley:                         Mike?

Mike Hess:                         Yeah, so I would certainly agree with that. In my previous life, I worked for a technology company and I think one of the things we learned very early on in our, you know, role in the smart city space is smart city is not all about the technology. In fact, technology should really be the last part of the discussion.

Mike Hess:                         There’s plenty of technology out there already. Technology is already changing. It’s always changing. And so that really shouldn’t be your first step because a lot of times if you just start throwing shiny objects and technology to try to solve a problem, it may not actually work. We saw a lot of technology that was out there to try to solve problems that didn’t necessarily have to exist. So really to me, smart city has to start with a good planning processes, so stakeholder alignment, getting people to sort of think outside their silos, both within city, city working with developers, but getting people to sort of think differently and think together was really the first piece to smart city.

Mike Hess:                         And also really starting to think about what are the new business models or different ways we can work together once we get out of our silos to figure out how to solve our city’s issues. And that may be a technology solution; it may not be.

Mike Hess:                         So, I agree with you Craig, 100%. And really then, technology comes in at the end to kind of fill the gaps. And you know, I would also encourage everyone to Google the definition of smart city. I mean, it’s sort of all over the place and most of them that you see are very technology-focused. But I would encourage you-

Craig Ustler:                       Or self-declared. Right?

Paul Jarley:                         So, whenever I’m trying to think through whether something is a thing or not. The first question I always ask is what problem are we solving here? So what is the promise of a smart city? What is it looking to solve?

Mike Hess:                         And so that’s an interesting question because that answer is going to depend on where you are. So really, the first part of any smart city process should be around planning and having the community decide what do we want to solve under this sort of smart city.

Craig Ustler:                       Like, traffic on I-4?

Mike Hess:                         Yeah. So, and I can tell you this is something that the city of Orlando is about to really dive into is a smart city master planning process. We’re literally going to be a getting started on some of this next week. And really that process is all about community engagement. Residents, developers, all the stakeholders in the community, to come together and figure out what does smart city mean to us in Orlando? What do we want to solve?

Mike Hess:                         And once you get to that point, I mean, there are a million things smart city can solve and I can kind of walk you through from an Orlando perspective, when we do this planning process, we’ve already started to sort of figure out what some of our major categories are that we want to work within in our planning process.

Paul Jarley:                         Give us a sense of what’s the top three things, like on your list.

Mike Hess:                         Yeah, so I would say communications infrastructure is a big one. How do we solve that digital divide? How do we make sure everyone is connected and has access to technology?

Paul Jarley:                         Because increasing inequality could be an outcome here, right?

Mike Hess:                         Absolutely. I mean, another example on sort of the equity side from an energy perspective, a lot of my past work has been around energy equity and resiliency, so that everyone has clean power. Everyone has access to resilient power. So, that’s another thing you can potentially look at in the smart city space.

Paul Jarley:                         Two more on your list.

Mike Hess:                         Okay. I was going to say I could keep going.

Paul Jarley:                         Go ahead.

Mike Hess:                         I don’t know. How long do you guys have? We could be here a while.

Mike Hess:                         I think transportation is a big piece. You mentioned that. There are different ideas that we’re already starting to think about from a city perspective in in the transportation space. I actually was in a meeting just this morning where we were actually looking at technology to create a frequent flyer program for alternative transportation. So, finding new ways to leverage technology to encourage people to use alternative transportation.

Mike Hess:                         And I’ll give you one more, because this was also a discussion yesterday: food waste. So think about all of the food that we just had at this event that is now going to go to waste. Our Office of Sustainability has been working on the food waste issue, because it’s actually a very big issue in central Florida. So our smart city team actually has been coming across some technology that we can use to basically get rid of food waste on demand using GrubHub, Uber Eats and those kinds of things. So that’s another area that we can tackle under smart cities.

Paul Jarley:                         Craig, do you have a wishlist?

Craig Ustler:                       Yeah, so the problem to solve in Orlando … it’s not unique, it’s the same problem Atlanta has, any really suburban sprawl-based city has. So Orlando has really, really strong, what I call an urban asset balance sheet. We have a lot of things you want and we have population growth and all these great stats and all this stuff, but it’s arranged poorly. It’s arranged inefficiently. So that’s the promise of a smart city for a place like Orlando. It’s efficiency. I mean the problem when you asked me what we need to solve, it’s all these assets that should add up to more than they are, but they don’t add up to what they should be because of the way they are disconnected and inefficiently arranged.

Craig Ustler:                       So the promise of a smart city, especially in a suburban layout, is if you can connect all that stuff in a way where you can essentially just achieve a lot better efficiency, a lot higher return on your investment. So this is the promise on down from traffic and all that kind of stuff, that you can manage what you have better. That’s a somewhat different promise than in a truly smart city market leader, a New York City or a Boston or internationally, Shanghai. Whatever it is, I mean. That’s somewhat of a different promise, right? I mean that is sort of these global leaders in thought and technology and advancement.

Craig Ustler:                       I don’t think, at least in the short term, that’s Orlando’s promise as a smart city, I think you sort of start with some stuff you can do as a city, especially. You identify some of the ways you can really just gain efficiency. And I like to also break the problem down to somewhat of a scale you can manage. I’ve struggled with the term smart city from the get go because the promise is too big. If you go to the conference of the smart city guy, it’s like you’re going to live your whole life on your device. It’s this George Jetson promise of efficiency, which is really, really difficult to achieve. So

Craig Ustler:                       I think if we bring it down to a top, whatever we can do, make those things more efficient and make you feel better about the way you do it, then I think that’s quote-unquote the “problem” you’re trying to solve.

Craig Ustler:                       And then I also would say that there’s just an inherent frustration by many, many, many stakeholders in what seems to be a false promise of technology improving something. And so we’re still challenged.

Craig Ustler:                       I use digital permitting as an example, right? As a city, it should be easier to get digital permitting ready. As a real estate person, digital communications should have made your life, it should have freed up your time because you now have quicker ways of getting it, but it hasn’t. It’s sort of made it more complicated.

Craig Ustler:                       So it also would be in my mind, the challenge, the problem that you’re trying to solve would sort of be if the city is quote-unquote “smart,” then make it better for me. Make the outcome be better for me. And you guys are supposed to be so smart now and have all this technology, why doesn’t the road move traffic any faster than it did? And the capacity is the same, there’s not any more cars on nit. Because everybody is texting and driving and technology’s made it worse. Right?

Craig Ustler:                       It’s a weird thing that we’re sort of searching for outcomes. Technology’s delivered on its promise in some areas, like on your phone. It hadn’t delivered and how you manage parking inventory in downtown Orlando. And it just frustrates you that, how in the world can I not be an app for that? I mean, Uber’s figured it out and our app exists and doesn’t really working. You can’t get the private garages and the public garages. Right? So that’s where I’m talking about, come up with a problem we can solve. And I think maybe that’s a quick, that’s what you’re looking for, right? It’s something we can do.

Mike Hess:                         Absolutely. You sound like you’re a little mad at me there, Craig.

Craig Ustler:                       So, parking management.

Mike Hess:                         Yeah. And honestly, so I mean I can tell you, and I don’t have all the answers yet. So as we go through our smart city planning process, we intend to engage the community. So I think you just made it onto the advisory committee.

Paul Jarley:                         That’s always how you get on the advisory committee. Is Orlando a particularly good candidate to be a smart city? If so, why?

Craig Ustler:                       I can start that with that. Oe of the number one things about this, you’ve got to want to do it. So the reason that Orlando is a leader in sustainability is cause Mayor Dyer’s committed to that and he’s committed executive leadership position and resources for. So, he’s done the same thing with Mike’s position. It matters to him. He travels around the country and he sees other cities and talks to other mayors and he sees what they’ve accomplished. He’ll see a place like Pittsburgh that’s reinvented itself essentially based on sustainability and being smart. And he’ll say, “How’d you do that?” The Pittsburgh mayor will say and Mayor Dyer says, “That sounds like a good idea. Maybe I could figure out how to do that on my team.”

Craig Ustler:                       So that’s part of it, is we are a good candidate because we have leadership that cares about it. And then I also think we’re a pretty good candidate for it just because we have some things, we have some projects especially, where the particular developers are interested in it, so the sports and entertainment district project that the Magic are working on, are very, very committed to a smart city approach. Tavistock is very out in front of a lot of smart city technology. Creative Village and we’ve talked about an alignment with the university and doing it there and making that a living laboratory for a lot of university stuff. So yeah, I think, I think we’re well positioned in the sense that we have some real influential stakeholders that would be willing to do it.

Craig Ustler:                       And I think tourism is also a neat candidate. We haven’t talked about that yet today, but I think we would all agree that this technology, if you’ve been to Disney lately and you’ve figured out how to pay more money and skip the line and all that, that’s a place it has delivered. But I think that’s a huge audience to try to analyze, you know? The tourist market and make that more efficient. So, I do see that as kind of low hanging fruit and probably a lot of good strategic partners there.

Mike Hess:                         Yeah. And I would agree. I think Orlando is a great city for this and I can give two perspectives from past life working with a technology company.

Mike Hess:                         One of the things we noticed as we were working with cities is a lot of times the sort of medium-sized cities were really better at being innovative and you know, really thinking differently about smart cities, as opposed to some of the bigger cities.

Mike Hess:                         And then from a city perspective of, I haven’t even been with the city for two months, but obviously the leadership of the mayor has been a key, but also just the rest of the city team. I think Orlando has really assembled an A Team within the city. A lot of our staff are excellent. And so I think we’ve got the right team to be able to implement these things.

Paul Jarley:                         So, one of the issues that routinely comes up in the smart cities conversation is privacy, right? Somewhere, George Orwell is rolling over in his grave when he’s thinking about smart cities. You know, I’d be really interested to know how many of you are willing to give up your privacy to get to where you want to go 10 minutes quicker in town or 15 minutes quicker? Yeah, more of you should raise your hand, because you do. Okay? Google tells me this. But that’s a challenge. Right?

Craig Ustler:                       Probably the greatest challenge we have on the implementation side is if you take, and especially as it extends to social issues, so someone says, “I want to really address crime and homelessness,” and some stuff like that. We have the technology to do that right now, if everybody will submit to a face scan when they walk out of here and every public right of way, your face was constantly, we could virtually eliminate a lot of segments of crime, if we would all commit to that level of, you know, whatever.

Craig Ustler:                       So, it’s a challenge in a lot of the ways we think about deploying the technology because again, the promise of technology is intriguing. But then when you actually tell somebody the reality of what that means, it’s controversial. Charlotte and I were just in New York this weekend, huge new development called Hudson Yards. They’ve got a great public art piece that everybody wants to climb up, or so they thought until they read the social media policy that you sign, you have to get the app and it says we can use any photo you take and post on Instagram for our own profit and for our own whatever.

Craig Ustler:                       And a lot of people have really pushed back on that because they don’t like it from a privacy standpoint. And you’re sort of like, well what did you think? You were going to go take a picture in New York City of a famous piece of art and put it on Instagram and you were gonna own? That was going to be private to you? But you’d be surprised how many people struggle with that.

Craig Ustler:                       So, that’s an unknown right now. I will say that-

Mike Hess:                         We’re talking about acts of government here, by the way.

Craig Ustler:                       Yeah. To me that’s still a really, I don’t know if I want to call it generational, because that makes me sound old.

Mike Hess:                         Not a thing. I already covered that.

Craig Ustler:                       Suffice it to say, maybe a younger generation is a little more open minded to the way technology might be completely interwoven into your life. And we have found pushback, corporate tenants and other folks that come from a more privacy-driven mindset. I don’t know if that’s been your experience, but.

Mike Hess:                         No, that’s absolutely been my experience, and I think that really goes back to the very beginning of what is a smart city and that that definition changes based on your community and the local culture. I’ve worked on smart city projects in Japan where it’s a little bit different culture and they’re willing to give up a lot of that privacy. In the US, it’s different. Within different communities in the US, it’s different.

Mike Hess:                         I mean, I can say as part of our smart city planning process, that’s something we really want to wrap our minds around. There’s really this balance between data privacy and cybersecurity versus transparency and open data. And so we’re going to continue in that planning process to think about our policies around open data and data privacy because it’s a huge issue.

Paul Jarley:                         You mentioned that security issue, right? Let me give a plug to my colleagues in engineering at UCF who has probably the best cyber-hacking team in the country. The issues around terrorism, right? Around getting that data I think would be enormous challenges here for people to kind of confront going forward.

Paul Jarley:                         So, I’ve got a bunch of real estate professionals here today. What should they know about smart cities? How’s it going to impact how they do business?

Craig Ustler:                       So the way we think about it is in Orlando, especially as Mike has more time on the job that there’s essentially going to be in the same way you think about a region that has a transportation master plan and a sustainability master plan, there will be a longterm plan and view about how we think about ourselves as being a smart city. And I think that’s good. That will set the framework for what we expect and then we will have this, and the real estate community will respond, as it usually does, sort of based on what the market decides it wants.

Craig Ustler:                       And that to me is the tough part to figure out right now. We’re conflicted. When you build multifamily units or student housing or whatever, the technology intelligence that they hold in their hand is superior, right? You don’t need to really worry so much about programming the air conditioning, you know, they just now sell the air conditioning thing that adds onto your air conditioning unit that you control over your phone. I mean, physically building it into your real estate is probably not as important as just the ability to accommodate a lot of these innovations that come along.

Craig Ustler:                       But I do think an overarching commitment to being a smart city, as I said, is important. And I do think real estate developers will ultimately figure out what we think some of the innovative things that make you smart or make the city smarter are. And in Orlando, the good news is, we’re still in that sort of adolescence phase of growing up as a city and we don’t have this mature transit system and we don’t have a mature sort of data analytics around a way a lot of these things could end up. And so, I’m encouraged by that actually, because we kind of get to figure out what we invent our future to be.

Craig Ustler:                       Real estate developers are notoriously bad at what I call presumptive arrogance. We decide what we think the market wants and we build it. And this has really been a huge mistake in smart cities. You thought everybody wanted this house that had a control panel. And the next thing you know, ADT came out with it six months later and no one cared. So this is where I feel like the risk in real estate is. In some ways, we need to sit back and figure out what the market tells us we need to be able to adapt to and we need to build in smart locations so that we can put smart people in smart cities, right? But we don’t need to focus too much on the actual kind of thing that it is. And I worry that thing would get outdated quickly anyway.

Paul Jarley:                         You can just count the numbers of miles of cable I have in BA1 and BA2 that no longer matter.

Craig Ustler:                       That you were told-

Paul Jarley:                         As a result of wi-fi, right?

Craig Ustler:                       That you were told was the best and the brightest at the time.

Paul Jarley:                         Mike, what do you think about that?

Mike Hess:                         And this is all experience from my past life. I mean, I’ve seen impacts on real estate all over the place. So it really depends on what you want to focus on.

Mike Hess:                         Some of our early smart city projects, in my past job in Japan, what we actually saw were increases in value. So we were building a smart city development and seeing that residents were willing to pay a 25 to 30% premium to live in that development because they wanted the resiliency. They wanted the technology that was helping with public safety. I mean, they wanted those things.

Mike Hess:                         On the flip side though, some of the projects we were working on in San Francisco were really geared around affordable housing. How can you use smart city technology to create places where the police and firemen and teachers can actually afford to live in San Francisco? How can we use technology to drive down construction costs? Some of my work in Denver, we really wanted to focus on carbon neutrality. So, it was really partnerships with utility with Denver Airport on really a new business model and new planning process around energy that quite honestly unlocked a carbon neutral neighborhood without it costing any more. So it really depends on what are your goals and then you’ll get the desired impact you want on your real estate.

Craig Ustler:                       Yeah, so from a real estate standpoint it’s a good thing that we think about, so it would be smarter to house yourself in less square footage. This is what should happen, as we try to keep addressing affordable housing and you can’t really affect, although you’d like to, how much concrete costs or anything. Ultimately, a smarter generation, a smarter city will house people in an average dwelling size that is not 2,500 square feet. Just sort of by definition, it will be smarter to live more efficiently.

Craig Ustler:                       The office world has actually already discovered this, whether you like coworking space or not. And I think this pendulum will shift a little bit back, but coworking space is nothing if it’s not more efficient. I mean, it just is. You’re using real estate for a longer period of time with more people using it.

Craig Ustler:                       And so I do think that thought process will extend into residential, and this is starting to be talked about a lot. For a very long time, it was thought that you could invent a better thing to build it out of, like 3-D printing a house or something. That was where technology started in addressing the affordable housing thing. I actually think now the promise is really in the efficiency of a lifestyle you can create through a smart citizen. This is in Asia and everywhere already.

Paul Jarley:                         I should buy IKEA stock?

Craig Ustler:                       Right, so IKEA … that’s exactly right. The idea of an IKEA unit being smart.

Paul Jarley:                         Tiny houses are a thing, apparently.

Craig Ustler:                       Yeah, they are a thing. That is what I think you’re going to see in real estate as far as the way we house ourselves in the future, it’s ultimately becoming about less square footage.

Paul Jarley:                         So when we reached out to you, you replied that you thought it was a really interesting topic and that there were smart-smart cities and dumb-smart cities. Would you like like to expound upon that a little bit?

Craig Ustler:                       Yeah, so I think about that a couple of ways. So, smart-smart cities or what we’re trying to do. They’re intentional and they’re thoughtful in their plan and they actually have a reason to call themselves that.

Craig Ustler:                       Dumb-smart cities are really a marketing gimmick. They are in a location that isn’t smart or they don’t have technology that’s smart or they don’t have stakeholders that are committed to being smart, but yet they just call themselves that to give you the false promise that they have one thing like, a guard gate that goes open automatically when your car thing sets it off or something. It’s not even smart in the first place. Right? But because it’s sort of a buzz thing to say that you’re smart, right?

Craig Ustler:                       And then I also think smart-smart cities have smart people, right? Dumb- smart cities have done people. You have to retain and attract intellectually superior and knowledge sort of based economy, all this idea. I mean, that’s what the whole world has become about, right? And we’re all in competition for this subset of really, really smart people. And so, that ultimately is the measure of a smart city.

Craig Ustler:                       I don’t know if you actually scored how it would shake out the places that we aspire to, but there tends to be a relationship. San Francisco and Seattle and Denver and Austin and Portland and Boston. All these people that show up on these places as being these really smart. It’s not just because the technology is smart, the people are smart, they tend to have the most universities per capita. They have very high education attainment level. Right?

Craig Ustler:                       So, that’s sort of what I mean by this idea. You can’t just sort of build the bones of it and still have it. But I do think there is also a self-selecting kind of a thing. I might want to live in a dumb city. I don’t know how smart I am. That’s why I’ve struggled with the term, just even of itself of calling yourself smarter than the other place. But I do think that’s what we’re talking about. I mean, to hear Mayor Dyer say and hear us say, we’re all after this same, I always argue that dumb people need a place to live, too.

Craig Ustler:                       But the smart city piece of is, that’s what we’re talking about. At the end of the day, it’s just can we get a place that where we all want to live in would attract the talent and sort of what we need to grow our economy? And be diverse. And you know, if you think about it, which I think is what smart city means, smart means being diverse and having a place for everyone and being inclusive and all these things. Right?

Craig Ustler:                       So, that’s what I want us to mean by smart. I don’t want it to be this elitist term that we’re just trying to get everybody from Harvard with an MBA to move to Orlando. That’s not what I think it means, but I think it does get misconstrued sometimes.

Mike Hess:                         I was going to say I would agree with that. I mean, it’s a very strange term, smart city. It always has been to me. You may actually see the name start to change. I mean, some players in the industry already are. They’re using connected city or other definitions. It’s a buzzword now, but the buzzword might change.

Paul Jarley:                         You can’t be smart city certified, like you can be lead certified. Is that that fair to say?

Mike Hess:                         Yeah, not, not quite yet.

Paul Jarley:                         Do you think that’ll come? Do you think there’s a set of standards there that might apply?

Mike Hess:                         There are always standards that develop. So yeah, I would, I would suspect, yes.

Paul Jarley:                         So, the podcast does not end wishy washy. You each have to answer the question in three sentences or less. Are smart cities a thing? Yes or no? Craig?

Craig Ustler:                       Yes, smart cities are a thing. I don’t think they’ll be called that when they ultimately become a big thing, though.

Paul Jarley:                         Mike?

Mike Hess:                         I hope it’s a thing or I’m going to be looking for a new job soon. But no, I think some vendors sort of treat it as a gimmick to try to sell you a shiny object. But I think the whole process of bringing the community together, getting people aligned, understanding what issues we want to solve, I think that’s absolutely a thing.

Paul Jarley:                         So, it’s my podcast, so I get to go last.

Paul Jarley:                         My dad was a hoarder. One of the things he hoarded was magazines from the 1950s and I remember one that Life did on what life was going to be like in the 1970s and it had a number of predictions in them, and all of them were wrong. Okay?

Paul Jarley:                         I think smart cities is going to be a lot like that. What we think smart cities are today probably aren’t going to be a thing, but some version of it, after people interact with it, probably will be a thing.

Paul Jarley:                         Thanks for the conversation. Really appreciate it and for all of you participating.

Paul Jarley:                         So, what’s your take? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show. Special thanks to my producer, Josh Miranda, and the whole team at the Office of Outreach & Engagement here at the UCF College of Business, and thank you for listening. Until next time, charge on.

The post Are Smart Cities Really a Thing? appeared first on Barry S. Miller College of Business.

Paul Jarley:                         It’s not uncommon to hear people say, “You can’t teach leadership. Leaders are born, not made.” It’s a fair argument. Quality of leadership isn’t always something that can be measured. And you just can’t expect to become a leader by reading stuff out of a book. After all, you don’t become a chef by studying a cookbook. You have to cook. But that doesn’t mean theory from the classroom can’t be put into practice.

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?” On to our show.

Paul Jarley:                         This episode features one out our Integrated Business faculty. Dr. James T. Brown, is an engineer at heart. He spent more than 15 years at NASA. He later used this experience to offer consulting and training services on leadership, project management, and decision making, to companies both small and large. Every month, we pick one of our faculty members to address a crowd of local business partners and alumni at an event we call The Dean’s Speaker Series. This time, we invited Dr. Brown to talk about what makes a good leader, some of the worst pitfalls he’s ever seen, and how to avoid some of these missteps. Naturally, we pulled out the best parts, and turned it into a podcast. I hope you enjoy.

James T. Brown:               Project management is an art. That is why everybody can’t do it. I don’t care how much process you have, doesn’t make a difference. Project management is an art. Just like art, it has principles. Every artist knows what happens when you mix red and yellow. `The principles are there, but the actual application of it is an art. It’s very difficult.

James T. Brown:               There’s a little girl. You may have heard of her before. She shows up at the three bears’ house. And she says, “Too hot. Too cold. Too hard. Too soft.” What is she looking for?

Crowd:                                 [crosstalk 00:02:06]

James T. Brown:               Just right. This is what we’re looking for with process. Just right. Can you give me the just right amount of process? And good process is born out of leadership. You get the leadership right, the process will be right. You can’t take process and be successful in the absence of leadership.

James T. Brown:               The reason I wrote a book on program management and not project management is this. Most project failure isn’t caused by the project manager. It’s caused by the people above them. The people above them are the ones that put the project managers in a position that makes it difficult for them to be successful. So a lot of what I talked about today with leadership, it applies to project managers, but it also applies to those people that are above them.

James T. Brown:               So this is our, our breakfast menu today. The one that’s underlined there, establish accountability and clear direction. That’s what I’m going to talk about first. So establish accountability and clear direction. I was in the company headquarters. And when I walked through the door I was conducting training for a week. First morning in, huge building. And it was interesting because, they had a special door for the executives. And that door was roped off with a velvet rope, like if you ever went to a nightclub. I nobody here probably goes nightclub, but if you ever went to a nightclub, sometimes they have a velvet rope that that separates things. So they had this velvet rope separated them, and the executives would come in on their side of the velvet rope, get the Wall Street Journal, get on their private elevator, go to the top floor where they had a private dining room. Do you think that they had a feel for what really goes on at the company?

James T. Brown:               If you can’t even ride the elevator with the regular workers, odds are you don’t have a feel. They are what I call PowerPoint leaders. They don’t actually know how work is accomplished at the working level, because everybody brings them a presentation. And then when the company gets in trouble, do you know what they do? They go and hire consultants. These leaders are consultants’ dreams. They hire consultants. You know what the consultants do? They go talk to the people at the working level, where they find a problem, and the answer, they put it in a PowerPoint package and take it back up to the people on their private elevator.

James T. Brown:               It’s a real simple process, drives a lot of capitalism in America. And this is what frustrates me. My wife, she loves to watch this program called, which is it… Undercover Boss. Undercover Boss, and I’m like, I can’t even watch it because it makes me so angry. That that you are a leader and this is the first time you’ve actually seen how things work in your company. All right, so this whole leading with a feel. That means you really have a feel. This picture I put up here with [inaudible 00:05:14], because that’s how you’re leading, if you don’t have a feel. You have to have a feel, for what is going on.

James T. Brown:               There’s a launch director, that launched more space shuttles than anybody, and he’s one of the first people I interviewed for my book. When I was conducting research. And he was famous. He was famous, for getting the shuttle off the ground, and he was famous for a lot of things. But he always said this. That, “I will go out and see what’s going on third shift. I will go to different locations throughout the space center. I will go different to different locations throughout the country and talk to people at the working level.” And then he said this. “There has never been a week, when I went out and talk to people at the working level, that that wasn’t the most valuable part of my week.” The most valuable part.

James T. Brown:               So here’s my tip for you. I don’t care if you have 3,000 people working for you, or 50. You can use a random number generator in Excel, you put all the people in there. And every day, somebody’s name is going to pop up at the top, at random. You go talk to them. You don’t have to necessarily even ask them about their work. You can just go and talk to them. Because when you talk to people, you learned a lot. Even if you’re not talking about work. You see how frazzled they are, how un-frazzled they are, or you see a lot of things and then you will have feel.

James T. Brown:               The next thing I’m going to talk about, slow it down. Some people think the leader’s role is to expedite, expedite, expedite. My opinion is, the leader’s role is really to slow it down. Everybody’s trying to get it done. That same leader I was talking about, famous for getting the show off the ground. The launch team would say this. He was so famous for doing it. If it was a cloudy day. This is what they would say, “Don’t worry. [inaudible 00:07:04] will find a hole in the clouds.” He was famous for managing the cut, the countdown clock. Because in Florida, you know we got clouds, a windows sun, clouds. Cloudy day, window of sun, off goes the space shuttle. Done.

James T. Brown:               When I asked him about that. This was his response. He says, “People think my role as launch director is to get the show off the ground. Since my role is launch director, my role as the leader, is to stop the launch. Everybody has launch fever. Everybody’s trying to find a way to make it work. I have to make sure that is really ready to go.” And he said, “Even the astronauts will tell me. They’ve been on their back for four hours. They’ve been training for this mission for a year. They’ve been wanting to go to space their entire life. When you asked us if we’re go, we’re always going to say go. We depend on you stop.” And so when you’re the high level leader, you have to be that person to make sure insanity doesn’t take place.

James T. Brown:               But if you’re always pushing, pushing, pushing. Then you end up creating insanity. When you cross 90% capacity, you end up getting less work done over the course of a year. If you cross 90% capacity, you get less work done over the course of a year. Because what you’ve done now is, you created a whole lot of waiting time and interference in the system. In other words, your work environment’s characterized by a lot of firefighting. Starting and stopping, starting and stopping, starting and stopping. Oh, we’re working on this? Now, oh wait, this happened over here, we got a vector over here. That’s how your work environment’s characterize. And this is true for any system.

James T. Brown:               If you don’t believe it, I’ll say it this way. Have you ever been on I-4 at a certain time of day? Once that interstate gets certain, I mean, gets a number of cars on it. Then it’s going to be starting and stop. And if somebody slams on their brakes, it doesn’t even have to be an accident, they can create a two mile backup. Just by slamming on the brakes. And sometimes that happens in the work environment. Somebody slams on the brakes with an incident, and then we have this whole backup. If you still don’t believe me, if you have a computer system and your memory gets above 90% full, or your hard drive gets above 90% full, what happens? You look at the hourglass.

James T. Brown:               So the role of the leader here is to make sure. Are we like at 80, 85% capacity? give us some margin, some buffer, so that we can handle things that come up? Because everything always goes, we produce more work when things go smooth. And sometimes people ask me, can you measure capacity? In a lot of environments, you may be able to, but in most environments not. But we certainly know when things aren’t going smooth. We certainly know when we’re dominated by firefighting. We certainly know when we’re going, starting and stopping, starting and stopping. And if that’s the case, we either got to cut back on work, or increase capacity. Because nothing comes for free. And this is where the leader has to step in. This is a leadership role.

James T. Brown:               That deals with number three, don’t ask for the impossible. I’m always astounded by leaders that, [inaudible 00:10:17] something, this has to happen by May 31. No clue about what resources are available. They think because they are the VP, the CIO, the director, whatever their title is. If they just name it, then it will happen. And then people are jumping through hoops to try to do it. They don’t want to do it. No one will listen.

James T. Brown:               I was dealing with a company. I can’t say the name because, since I had a contract with them at the time, but this was written up in the Wall Street Journal. So it is public knowledge. They took a 2 billion with a B dollar write off on a project. Billion with a B. Some of the articles you can read about it today say 4 billion dollar loss. And here was the problem. And a lot of you I guarantee have their service or product in your product or pocket right now. The problem was the technology didn’t work. The technology didn’t work. And what happened when a technical person said, “Excuse me. This technology doesn’t work.” They took out the machine gun, gunned them down. After they see three people get gunned down, the people just put their head down. And they put their head down all the way to a 2 billion dollar loss. The company would hold these rallies and say, and I’m going to call the Project X-Y-Z, “If you weren’t on the X-Y-Z train, you’re not part of this company.” They called that motivation. And that’s the way they did it, and this was the result.

James T. Brown:               Then finally on this one, communicate through prioritization. This is how we communicate, from a project point of view. From a leadership point of view, I would hold you in dereliction of duty if you can’t show me your top 10 issues in priority order. Project managers that work for me, I want to see their risk in priority order, the requirements in priority order, the stakeholders in priority order. And priority order drives communication. It drives it, because I can’t say, A is more important than B, or B is more important than C, unless I understand A and B. If I’m sitting down with the people that work for me, we can’t say this is more important than that, unless we all have the same understanding. So it drives me. So if I worked in your organization, I would expect to see all… You should show me a list of all the projects in priority order, so I know what’s most important. And let me give you the sheer sign of a lack of, if you want to identify somebody that’s not a leader, I’m gonna give you a test right now.

James T. Brown:               If they say everything is top priority, they’re not a leader. Leaders put things priority order. If they say everything is top priority, in your mind, this is what I want you to think. Slacker. Unworthy of the check they’re taken from the company. Don’t say it out loud though. That is what I want you to think because, I can use third grade math and prove to you that that’s fictional. If everything is top priority, that means everything is equal priority, and if everything is equal priority, the statement everything is top priority is no different than a statement, everything is bottom priority. It’s the same thing. How would you feel, if you show up for work in a new job and they say, “At our company, everything is bottom priority. You’re my bottom priority, too.”

James T. Brown:               So, if you’ve ever said everything is top priority, I forgive you. But from this day forward, if you say that, I want you to toss and turn at night. I want your significant other to say, “What’s wrong dear?” And you say, “Well, I said everything is top priority today. An I know, I know that’s not true.”

James T. Brown:               Create an environment that does not create mediocrity. I’ll do that, then I will go in investing in developing people in teams. When I was in high school, I rode the bus. Riding the bus in high school it’s not cool. Not cool at all, but I rode the bus. And one day on the bus, a fight broke out. And the fight was between a real hoodlum. Like a real hoodlum, okay? And a play hoodlum. Now, a play hoodlum is somebody that tries to talk like a hoodlum, act like a hoodlum. But, when they get off the bus, they go to a 3,000 square foot house, and their father is the, you know. And so they’re just acting like a hoodlum.

James T. Brown:               So the real hoodlum and a play hoodlum were fighting. And somebody actually grabbed the real hoodlum. And I said, “Wow, that’s impressive. If he can grab the real hoodlum, I can certainly grab the play hoodlum.” So I grabbed the play hoodlum, and I’m holding them back. And they’re holding the real hoodlum back. And they’re young men, 17 years old, full of testosterone, saying what they want to do to each other. And the play hoodlum is talking so good about what he wants to do this guy, that I start to think, “If I don’t let him go and finish this is, it’s going to affect him the rest of his life.” So I started easing off his biceps, and he just cut me a look and said, “Whatever you do, don’t let me go.” He was just talking. He was just, he didn’t really want to do it.

James T. Brown:               So when I say walk the talk here, in a lot of organizations you have leaders to say, “Quality is our first priority. Customer service is our first priority.” But what do they do, when you’re under pressure? Do they say ship it out the door anyway? Find a way to make it work. In other words, the people that work in an organization, or the people that support your projects. They see what you really do. They see what your actions are. You can have, and this cracks me up when I go to companies where they have posters on the wall everywhere about this and that, and this. But their culture doesn’t reflect the poster. I don’t care how many posters you have, people judge you by your actions. How you handle the situations. When you say, “We’re going to take a hit here, because we can’t do it. We’re going to tell the customer this, this, and this, and we’re going to take the hit.”

James T. Brown:               So also here, set standards and boundaries on what is acceptable. You know we should know what is acceptable here. Like when I’m a project manager, I make one thing very clear. If I ever catch you working outside of the control process, doing work that hasn’t been approved, that is like my number one no-no. I will… My father was a marine so that’s when I say, I will go in Marine Corps mode on that one. So everybody knows that’s a boundary. So, we have to establish whatever these boundaries are, and people know what is acceptable.

James T. Brown:               A sense of pride. We should also have that. That we have to create pride. We want to be proud of our organization, proud of our company. Sometimes people mistake pride and arrogance. They think that because a certain company does so well and whatever, and the people who might… I want to call their name, but they’re a local company, and I’ll get in trouble. But I work for this company. And they have an attitude about it. And I’m saying there’s nothing wrong with that attitude. If you look at people to do things at a very high level, they have pride in it, and they have a certain degree of confidence in it. And when we’re the leader, we want to instill that.

James T. Brown:               Another thing that I would say that this is, and this is in, if you’ve heard of the restaurant Shake Shack, the author, I mean that restaurant owner. He has a book out there. I’m not saying to read the book, but this is an interesting point from it. He says there’s three kinds of employees. You have overwhelmers. By the way, I can’t spell and my boss is here. So I hate to say this, but you have overwhelmers. You have underwhelmers. And then you just have whelmers. He says, the most dangerous employee in an organization is not the underwhelmer, because you will get rid of them. The most dangerous employee in the organization is the whelmer. The person that says, “Average is good enough here.”

James T. Brown:               When you let that person stay, that is when things happen badly. Because then you have a whole culture that says, “Average is okay here.” And you have to get rid of them. I speak to a lot of small businesses sometime, and this is what they will say. “I had a person that was average, and when I got rid of them, I was surprised at 14 people came by my office and told me they’re so glad that we got, that I got rid of that person.” Don’t tolerate mediocrity. Do not tolerate, because you’re… I always looked at it like this. It’s my role to protect the entire team organization. And when I let that mediocrity exists, I’m not doing that.

James T. Brown:               In other words, yes, that person may have this or that, but what can you say? Management measure the fundamentals, we get away from the fundamentals a lot. Here’s the thing about leadership and project management. There’s really nothing new in it. Been doing it, thousands of years. Nothing new. People put it in new packages, but it’s still the same thing. But the question is, do we do it? A lot of times when I conduct training or anything like that, people come to say this. “You really didn’t say anything new, but it reminded me of what I didn’t do. It reminded me of what I used to do.” And so all I’m saying is, pay attention to the fundamentals. Great, great athletic teams, they practice the fundamentals. Blocking and tackling if it’s football. All of that great musicians practice the fundamentals. So this is something we have to do in the business world also.

James T. Brown:               So we’re going to jump now to invest in developing people in teams. It is not enough to get all the work on your plate done in the next year. In other words, whatever you had outlined for the next year to get done. If that year walks down the road, and we’re a year from now, we got everything done. That’s not enough. I have a year from now, not only do I have to get everything done, but I have to grow the people along the way. You should be much more capable as an organization, a year from now, than you are today. Because you consciously chose to grow the people, as you executed. And it dawned on me once, when I was watching this high level leader that I was working with, and it finally clicked in my head as I was watching him that, he is actually teaching in this meeting. It’s not just a meeting. He is teaching. And this is when you’re the leader, or you’re the project manager. You, whoever, every time you have a meeting, it’s not just a window where you’re going to go accomplish the agenda. You have to think about, what am I teaching in this meeting?

James T. Brown:               And so I develop people all along the way, because sometimes I hear people that are leaders in companies or an organization say, make this statement. “We don’t have anybody we can promote to this position. Nobody at our company is capable of doing this.” And I want to say, “Whose fault is that? Whose fault is that, that you haven’t developed people along the way?” This is one of the things we have to do, but sometimes we’re in such a hurry to get things done, that we don’t develop people as we go. So this is one of the things that we have to do consciously. Consciously we have a strategy for it. Team building should be part of the budget and plan. In other words, I have a budget for team building. I’m going to do activities.

James T. Brown:               When I worked for NASA, if you saw the Apollo 13 meeting. That flight director, Jim Krantz, was director of mission operations. We were extremely busy. This is when they said, “We’re saying the shuttle’s going to going to fly 78 times a year.” We were extremely busy, and certain things about him impressed me as a leader. One was this. Every new employee in his organization, you would have to come and brief him a year after being in the organization. He would take his time out, to hear what you did your first year in his organization. The other thing he did, is he would personally come and brief all new employee groups, once a quarter. So anybody that was hired in his organization, once a quarter he would come in and brief. And he would talk to you for hours about his opinion of manned spaceflight, and the cost required, and what it takes to be successful, and all of that. It was amazing. But, as busy as we were, every year we also had something called the Mission Operations Directorate Olympics. Where the organizations competed against each other.

James T. Brown:               So every section in the organization competed in each other in Olympic events. Like coin toss, three legged race, basketball, softball, all of these events, we would compete with each other over the weekend. And to tell you what kind of guy he was, one year he either separated his shoulder or elbow diving for the finish line in the sack race. That’s what kind of individual was. But, and the winner got a trophy that was a horse. Half of the horse. The winner got the first half of the horse. The losing organization, got the back half of the horse. And nobody wanted to lose. Your leader didn’t want to lose, because the loser had to run the Olympics that next year. So it was really intense competition, because you do not want to have to run it. But all I’m saying is, as busy as we were, he had structure team building. If you don’t have time for team building, you don’t have time for success. I’ll say it that way. You have to build it in you have to block it in.

James T. Brown:               Also, you have to humanize people. Sometimes we look at people and say, “That’s the IT guy.” Are they the IT guy, or do they have a name? Do you look at people as a representative of their organization? In other words, I’ll say it this way. Do you see them as human being first, IT guy second. Or IT guy first, who may or may not be human being. I see a lot of star stuff in there, but how do I see them? So this is one of the things that I have to make sure that I deal with. I’m always trying to, the more I can get people to look at each other in the eye and see them as human beings, the more problems I prevent from happening. So it’s one of those things.

James T. Brown:               Accelerate the development of high achievers. A lot of high level, NASA leaders got there because they have a program that has a formal name now. But it had a very politically incorrect name then. Now you’re like, they call it, “You’re the center director’s technical intern.” When I worked there, it was the Bubba Program. Bubba was, “Hey Bubba, do this. Hey Bubba, do that.” So once you became the center director’s technical intern, then at a very low level, you went everywhere the center director went for six months to 18 months. You heard every sensitive thing the center director her for six months to 18 months. And because of that, somebody that had a perspective on NASA like this. After 18 months, has a perspective like this.

James T. Brown:               And often, they can now solve problems across organizational boundaries, because they develop relationships with all the other senior executives. And this is one of the things a lot of organizations struggle with. How do we solve that problem that causes four organizational boundaries, with all the competing stakeholders. Now you’ve created people in your system that can do that. And so it’s been very successful. Multiple summon directors came out of this. Multiple high level leaders came out of this process. And then also sometimes identifies people that you know are never going to get to that level. But it’s good because, one of the things high level leaders always have to do, or leaders have to do is, how do I take what’s the knowledge and experience in my head, and how do I efficiently transfer it to others. So that I don’t become the point of contact bottleneck.

James T. Brown:               Handle mistakes positively. There was a there was a high level leader in NASA that I respected him so much that I stalked him. In other words, whenever there was a meeting, I would try to sit as close to him as possible, so I could hear what he would whisper to the person sitting next to him. And so he would be, he was one of the first people I interviewed for my book. And one of the things he told me was this, which was the first bullet. He said, “James.” He said, “Your best people, are always going to make your biggest mistakes. Your best people, are always going to make your biggest mistakes.” And it’s kind of counterintuitive you think my best people are going to make. But then he follows with this. He says, “Your best people are doing the most work. They’re doing the most complicated work. They are the ones trying to make it happen.” He said, “So when that person makes a mistake, before pound them in the ground, or before we criticize them. This is what we have to say. What did we do as leaders to put this good person in a position that they made a mistake?”

James T. Brown:               That’s the first question you asked when the mistake is made. What did we do as leaders that put this good person in this position, that they made this mistake. Because often, we bear the majority of the blame. We know the person is good. And they made this mistake. Are we working them too hard, or were things not set?

James T. Brown:               The second one is let people fail safely so they can grow. There’s an insurance company I deal with in the Midwest. If you make a mistake there… And I’ll say this. The only reason that they’re in business is that they can arbitrarily raise rates. Because nobody at that organization will make a decision. They all wait until the circumstances decide, because if you make a bad decision you’re punished. Or you have to let people make a mistake. And when I tell, when I have project managers that work for me, or this is what I tell project managers. If you make three out of four decisions correctly, I consider that great performance. That’s what I tell project managers. I give them permission to make a mistake. Because what I don’t want them doing is waiting, and waiting, and waiting, trying to be perfect. But I say this, when you make a mistake, identify it early. Own it, don’t pass it off on somebody else. Change it.

James T. Brown:               I want to be an environment where people make a decision. “Oh, that’s not.” Then once you see is not the correct decision, you own it. You don’t say, “Well, if this person over there hadn’t told me this.” No, you own it and change it. Because otherwise, you’re going to be waiting, and waiting, and waiting, and waiting. I give them permission to make a mistake. And another thing is, you can’t develop people if they don’t make mistakes. They can’t grow if they don’t make mistakes. So I like to make aggressive mistakes. I want to fail with the sword of aggressiveness, in my hand. I don’t want to die behind the shield of a passiveness with 1,000 micro cuts, oozing blood. So I’m going to go out and be very aggressive. Especially in project management. It’s one of the things that I have to do.

James T. Brown:               And this last one is huge. Calculated failure points. Every organization should have calculated failure points. In this room, somewhere that, we have lights, we have electricity. Somewhere in this building is a breaker box, that if there’s a short in the wire something pops. It is poor leadership, if something in your organization breaks, and it breaks where you did not want it to. You’re always going to have failures on occasion, but those failures should always occur where you chose for them to occur.

James T. Brown:               In other words, I’ve thought about it ahead of time. In other words, if I have people that are trying to juggle 12 plates. I tell them, “Okay, I know you’re trying to juggle 12 plates. If you have to drop one, drop a blue one or green one. Never drop a red one.” I give them permission in direction or where I want them to make the mistake. Meaning if I have 16 customers, four of those customers might generate 80% of my revenue. I never want to have anything happen with any of those four customers. But that customer who’s only two or 3% of my revenue, if we’re going to make a mistake, we’re going to make it with that customer. In other words, I not only defined that, I communicate that, so people know where they can make a mistake. So I think about this. This requires a thought process to say, what are our calculated failure points? Where are we choosing not to be good? What are our calculated failure points?

Paul Jarley:                         Is leadership really a thing? Well of course it is. Can it be taught? Frankly, I’m not so sure. What I do know, is that followers make leaders. People follow someone because they trust them. They trust them, because they’ve learned that the leader does what they say they’re going to do, and delivers on a shared vision. If you want to be a leader, you should understand that you need those followers more than they need you. Act accordingly.

Paul Jarley:                         So what’s your take? Check us out online, and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests, and notes from the show. Special thanks to my producer Josh Miranda, and the whole team at the Office of Outreach & Engagement here at the UCF College of Business. And thank you for listening. Until next time, charge on.

The post Teaching Leadership: Is It Really a Thing? appeared first on Barry S. Miller College of Business.

Voice:                                “If you build it, he will come.”

Terence Mann:                “He will come, Ray. He will most definitely come.”

Paul Jarley:                       That’s my favorite line from Field of Dreams. But, what if you can’t build it?

Jesse Wolfe:                     It came out to a $700,000, almost a million dollar, order. And they needed them to be about $10 a cart and I could not figure out how to get them below $25 a cart.

Paul Jarley:                       Or, what if they don’t come?

Cameron Ford:                The Google Glass, people started using it out in public and stuff like that, and quickly were scorned as being what were described as Glass-holes. My understanding is they pulled from the market.

Paul Jarley:                       Lean start up offers a different approach, but is it really a thing? Or, is it just academics hyping the scientific method?

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:                       This is how significant businesses started back in the day.

Michael Pape:                 What we were, I’ll just say, required to do as an entrepreneur with VCs with trying to get, maybe, economic development funds.

Paul Jarley:                       Yup.

Michael Pape:                 And this was in the biotech space.

Paul Jarley:                       That’s Dr. Michael Pape, Professor of Practice here in the College of Business, and Director of our UpStarts program.

Michael Pape:                 So it was a tech-oriented business that I’ve been involved in, was write the business plan, and I have sat down, myself and with my teams, of writing the 40 to 60 page business plan. The fat startup, if I may define it that way, had you do that. Venture capitalists would request it, and they would want to make sure that you saw the plan from beginning to end.

Paul Jarley:                       Then a funny thing happened starting in the early 1990s. Universities started to develop entrepreneurship programs. They did this partly to serve their economic development missions, partly because donors loved to give money to this cause and partly because more and more students became interested in entrepreneurship as a career path.

Paul Jarley:                       In the early 1990s, ideals spun out of Stanford, with an emphasis on design thinking. Another decade passed and Berkeley started developing what has come to be known as lean start up. It had a coming out party in 2011, with the publication of Eric Riles book by the same name. But, are universities and business schools really the place to start businesses?

Paul Jarley:                       I had my doubts. We excel at getting rule followers great jobs in companies who are looking for functional talent. We really aren’t geared up to help people who want to color outside the lines, pursue their crazy dreams, even when people say they’re wrong. That said, a quarter of my students say they want to start a business, and students seem to love the lean startup methodology. Cameron Ford, Director of our Center for Entrepreneurial Leadership, has a pretty obvious reason why.

Cameron Ford:                Our students love the lean approach because, of course, they don’t have any resources. So-

Paul Jarley:                       Simply put, they’re broke. But what exactly is lean startup, and what are its challenges?

Jesse Wolfe:                     That’s how I started my business.

Paul Jarley:                       We’re going to take you on a journey with this guy.

Jesse Wolfe:                     Lean startup, bootstrapping 101. That’s where great businesses, in my opinion, come from because people that start off with too much funding usually have an issue staying on course. When your back’s against the wall is when I feel you think the fastest, the brightest, the quickest and you become the most resourceful. When you have too much money you tend to get lackadaisical in my opinion.

Paul Jarley:                       That, my friends, is Jesse Wolfe, CEO and founder of O’Dang Hummus, and quite frankly a soundbite machine.

Jesse Wolfe:                     We run a very successful, thriving business and people are like, “Oh where’s the Lamborghini?”. I’m like, “Someone else’s hands because I’m dumping all my money back into the business”.

Paul Jarley:                       Now let’s follow Jesse’s startup story. A startup isn’t the same as a company. Back to Cameron Ford.

Cameron Ford:                It’s not a miniature version of a company, it’s actually a vehicle, for remaining humble, viewing all of your ideas as hypotheses and going out and collecting data to validate or invalidate these things and move forward-

Paul Jarley:                       It’s a product development process more than a-

Cameron Ford:                I would say it’s more of an uncertainty reduction process. Because it’s not just about the product, it’s also about relationships. So it’s kinda three elements to building a company. You gotta have conceptual kinda stuff put together, you’ve gotta have social stuff put together, people right and you actually have to invest material resources.

Paul Jarley:                       Interestingly, Jesse got started in exactly the way Mike Pape described except he didn’t have investors.

Jesse Wolfe:                     I had a business planning writing class with professor Michael O’Donnell. He told us we had to come up with a business plan idea and I didn’t want to be a part of a team that wrote for another bar concept. So, I had this idea after I had my wisdom teeth pulled out for a Ben and Jerry’s style Hummus company. And when I started writing the business plan for it, I realized there was this massive gap in that market. It was almost billion dollar category and there was one big contender really monopolizing it. And it was really primed for competition to come in.

Paul Jarley:                       Jesse had a plan but no product. So he got busy with the help of his grandmother.

Jesse Wolfe:                     I actually started O’Dang Hummus with about a hundred and fifty bucks. My grandmother gave me a food processor, so that was the freebie. And the rest of it was honestly just ingredients and some labels from like a little local printer that hooked me up.

Paul Jarley:                       Jesse had created what we call a minimum viable product or MVP. Cameron Ford says, it’s really important to have a prototype.

Cameron Ford:                Because you give them something tangible, I always like to tell people a picture’s worth a thousand words. A prototype is worth a thousand pictures. You get something that people can literally see and put their hands on that’s very tactile. That often will enhance the conversation and imagining process for a lot.

Paul Jarley:                       You could do more than just touch Jesse’s prototype. You could taste it. And it was yummy.

Jesse Wolfe:                     And that was the basis you know, it got me in front of people getting a taste testing and samples. And then when it came time to really launch the product and start selling it, I entered the UCF Business competition called ‘The Joust’.

Paul Jarley:                       Rather than seek out a network of advisors that could help Jess grow his business, he went straight for the financial kill. In retrospect Jesse realizes this may have been the biggest he made.

Jesse Wolfe:                     Not getting more people around me quicker in that space was a bit of a hindrance.

Donna Mackenzie:         I think starting a new business is sort of like waiting into the ocean with waves crashing around you and birds pulling you this way and that.

Paul Jarley:                       Donna Mackenzie is executive director of Starter Studio. She thinks Jesse waited way too long.

Paul Jarley:                       How early does that need to start? That mentorship and guidance.

Donna Mackenzie:         Day one.

Paul Jarley:                       Jesse didn’t win ‘The Joust’ and the big money that came with it. In fact, he finished third.

Jesse Wolfe:                     I took third place in that. And I’m proud of that.

Paul Jarley:                       That’s always the path to success in ‘The Joust’. Always finishing third!

Jesse Wolfe:                     Third place is the winning spot. It’s not first, it’s not second, it’s third.

Paul Jarley:                       The money is in third.

Jesse Wolfe:                     The money’s in the third. Yup.

Paul Jarley:                       You lost to women who wanted to pee in a cup.

Jesse Wolfe:                     Yeah, that’s [crosstalk 00:06:57] I lost to a female urination cup so that’s one of my greatest prides thus far at UCF. But yeah, I took that prize money it was about four thousand dollars. And again, I launched now our multi-million dollar business with $4,150.

Paul Jarley:                       But in fairness of that day, because I remember that day really well.

Jesse Wolfe:                     So do I.

Paul Jarley:                       I can imagine you do. I don’t think anybody there believed you didn’t have a killer product. I think they thought you couldn’t make any money at it.

Jesse Wolfe:                     Yeah, agreed.

Paul Jarley:                       Understand that Jesse isn’t the kind of guy who takes no for an answer. He decided to double down instead. Next stop, the real shark tank.

Jesse Wolfe:                     Hello Sharks! My name is Jesse Wolfe. I’m a UCF student from Orlando, Florida and my company is O’Dang Hummus. Today we’re seeking $50,000 for 10% equity stake in my hummus empire.

Paul Jarley:                       Jesse got his offer from the sharks but they took way too long with their due diligence. In the meantime, Publix came knocking. What’s surprising here, is they didn’t want Jesse’s traditional hummus, they wanted his hummus based salad dressing. So he signed a deal, found a packager and had to scale up production without sacrificing quality.

Jesse Wolfe:                     We’re doing truckloads of chickpeas at a time right now but it’s the same exact quality and consistency. As a matter of fact, we’re still using-

Paul Jarley:                       As what came out of your blender right? That’s the tough part right?

Jesse Wolfe:                     Same blender. The toughest thing I’ve had to bridge.

Paul Jarley:                       Problem was, Publix didn’t know what to do with it.

Paul Jarley:                       They didn’t know where to put that product.

Jesse Wolfe:                     Exactly. Exactly.

Paul Jarley:                       So where I would always find it is near the deli, kind of by where the rest of the hummus was but not really.

Jesse Wolfe:                     Not really it was by like, the gourmet mustards and stuff. I’m like alright this is random.

Paul Jarley:                       And I knew right away, I thought “Oh that’s a problem.”

Jesse Wolfe:                     Yeah it was a huge problem. And we called it a sauce. We let people convince us to call it a sauce. It was so jacked up. Yeah, and again but it was such a good learning lesson because we re pivoted to what, I mean it’s always been a dressing. So we relabeled it a dressing, we fixed the formulation, we listened to our fans and we delivered a product that’s bar none phenomenal.

Paul Jarley:                       Since that time, Jesse has had more than his fair share of struggles.

Jesse Wolfe:                     Never giving up. There’s so many times that I look back and thought we were dead and I stepped one more step.

Paul Jarley:                       He’s fixed his mentoring deficiencies.

Jesse Wolfe:                     But where I’m at today, I have very strategic, very specific mentors that are in the food space, that know packaging, that know consumer product goods. These are people that are really helping me thrive in my space. Not all mentors are created equal.

Paul Jarley:                       And he doesn’t panic the way that he used to.

Jesse Wolfe:                     Don’t burn everything down around me, you know trying to freak out. I just step back and I go “Here it is.” Right, we have another problem. Instead of panicking and pointing fingers at whose fault it is, what’s the solution.

Paul Jarley:                       And he is definitely a man who knows his value proposition. Listen to his pitch to Costco.

Jesse Wolfe:                     So, you know what I did is I walked in and I put a plate of salad down. A really beautiful salad. And I said, “Here’s one salad.” and I put a second plate down, I said “Here’s another salad.” And I took a bottle of canola oil that you cook with and I poured it all over top of this lettuce and I took a bottle of water and I poured it all over top of this lettuce. And then I took about a cup and a half of sugar and I poured it on top that salad. And then I took mine and I put chickpeas, beautiful fresh cooked chickpeas, I put fresh squeezed lemon juice on it, put it on the side and I put beautiful extra-virgin olive oil. And I put a fork right between the two plates. And I said, “Now, I want to ask you which salad would you like to eat?”

Jesse Wolfe:                     Our food system in America is broken. We’re the only salad dressing in the United States to gain national distribution being 100% plant based. Priced completely competitive to the big guys. We’re not a $10 salad dressing. We’re in Wal-Mart at $3.79.

Paul Jarley:                       No doubt about it, Jesse is a wonderful UCF success story. But is he typical? Does lean start up work everywhere? Or do other kinds of companies face other kinds of challenges?

Carol Ann Dykes Logue: There are companies that failing fast is better for them, I say sometimes it is.

Paul Jarley:                       Carol Ann Dykes Logue is site manager for the UCF incubator program. She stresses the difficulty a lot of the high tech companies have in implementing the lean start up approach.

Carol Ann Dykes Logue: It’s very difficult to apply the lean start up methodology many times. I’m working with very leading edge technology and innovation companies where the first question really is, “Can we make the technology work?”

Paul Jarley:                       That takes money, sometimes lots of it. Then there’s the challenge of getting technologically oriented minds to focus on the value added to the customer. Here’s a recent conversation with one of her clients.

Carol Ann Dykes Logue: And I kept asking him, “Tell me what you think. What’s the benefit of this technology that you are in the process of developing?” Throw something at me that was really a technical capability, I would come back to “Why should I care about that? How’s it gonna help me?” Tell me how it’s gonna help me.

Carol Ann Dykes Logue: A lot of times I use analogies and turn the tables on them and ask them “Alright, share with me a recent buying experience that you’ve had. Tell me what went through your head.” And they can pretty clearly tell you that and then they go, “Ohhhh, I see now.” Yeah I didn’t really care how it does what it does necessarily, I care that it does what I need done.

Paul Jarley:                       For students, finding the right people to talk to can be challenging when they wanna validate their ideas. Back to Cameron Ford.

Cameron Ford:                Well I think in the early part of the process we’re working on with most students. I think for them it’s very intimidating to think about going out and talking to a bunch of people about their idea. They just don’t know that many people that can connect them to the kinda folks that it would be relevant to speak to. It’s one thing if they’re talking about “Hey I’d like to open up a food truck that’ll pull up here on campus and serve sandwiches to students.” Well then you can go around campus and talk to students right, that’s who you’re trying to sell it to. But if you’re trying to do something that might help the elderly or something like that, you need to go out and talk to 50 or 60 people. Where are you gonna find those folks? How are you gonna conduct those interviews? That part of the process can be pretty daunting if you’re a student trying to go and really do the lean start up process really the way it’s supposed to be done.

Paul Jarley:                       Even when you find the right people to talk to, Donna Mackenzie says that the discovery process can lead to conflicting information. And it can be hard to sort out without experienced mentors.

Donna Mackenzie:         Oh that’s the tricky part. You know, you get so much feedback and it’s sometimes hard to discern whether this is the right direction or that’s the right direction. Just giving them the tools but not giving them the guidance and the mentorship to kind of sort through all of that. I think that’s really where you get that analysis by paralysis and it’s hard to get unstuck from there.

Paul Jarley:                       And if you skip this step, things can get ugly.

Cameron Ford:                Don’t start organizing your resources and your people before you get your story straight. Because if you do that, you’re going to cause a lot of harm. A lot of things aren’t gonna work out, you’re gonna burn a lot of bridges.

Paul Jarley:                       People lose confidence in you.

Cameron Ford:                Right.

Paul Jarley:                       And according to Mike Pape, there’s a lot more to creating a company than the lean start up process contemplates.

Michael Pape:                 An investor’s going to ask you, you want $400,000 what are you gonna spend that on? Well, you have to justify the use of funds and-

Paul Jarley:                       Ping pong tables probably aren’t it.

Michael Pape:                 Yeah, aren’t gonna be it right. Exactly. And a big salary is not going to go [crosstalk 00:14:42] Yeah there’s something to that.

Paul Jarley:                       So, you need to have a strong, long term financial plan.

Michael Pape:                 So with financial modeling the first thing you need to do is you have to establish what are and what I call and try to convey, value generating milestones. Not just milestones but value generating. To accomplish each of those milestones and they’d be value generating because they can create an influction let’s say. The value for the company, they can move the needle per say.

Paul Jarley:                       The hockey stick.

Michael Pape:                 The hockey stick. But then there’s a cost associated with hitting each of those milestones. And the investor wants to know how much it will cost to hit that milestone which is the basis for your budget.

Paul Jarley:                       Right.

Michael Pape:                 Which you then transfer to a spreadsheet which is your pro form a budget which is your financial model. And if that cash balance gets below zero and is red, I ask do you have a company?

Paul Jarley:                       No.

Paul Jarley:                       It’s time to call the question. “Is lean start up really a thing?” from Donna Mackenzie.

Donna Mackenzie:         Yes. It’s really a thing and I think it’s really a thing because it gives you a framework from which to build out of uncertainty because building a business is full of uncertainty.

Paul Jarley:                       From Michael Pape.

Michael Pape:                 I think lean start up is a thing where you can be nimble and adjust to the pace of change.

Paul Jarley:                       From Cameron Ford.

Cameron Ford:                Yes, it’s a thing. It’s made people understand how to evolve their ideas into fitness.

Paul Jarley:                       From Carol Ann Dykes Logue.

Carol Ann Dykes Logue: Sometimes it is. There are companies that failing fast is better for them.

Paul Jarley:                       From that hummus king, Jesse Wolfe.

Jesse Wolfe:                     100% yes I do.

Paul Jarley:                       It’s my podcast, so I get to go last. Reducing uncertainty by employing hypothesis testing in the scientific method is hugely appealing to academics. It’s how we think. But any good, thoughtful researcher knows the limits of such work. Especially when you’re trying to understand how people behave. It’s why having experienced mentors is so important in start ups. It can augment science with experience and increase the likelihood of success. If I were looking for a school to help me start a business, I would want to know much more about their network of experienced mentors then their grasp of frameworks like lean start up.

Paul Jarley:                       Management research can be kind of trendy. And something will eventually replace lean start up as the darling theory of the day. But building a strong network of advisors that can help navigate you through uncertainty is never going to go out of style. What do you think? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extensive interviews with our guests and notes from the show.

Paul Jarley:        Special thanks to my producer, Josh Miranda. And the whole team at the office of Outreach and Engagement here at UCF College of Business. And thank you for listening. Until next time, charge on.

The post Can You Really Start a Business With no Money? appeared first on Barry S. Miller College of Business.

Paul Jarley:                         Black Friday used to sound like this.

Jahir Hernandez:             They come in waves and I remember specifically that the check out line was all the way to the back of the store and you couldn’t get from one side of the store to the other because that line was so massive.

Paul Jarley:                         And now …

News Anchor:                    News Center 6 team’s Joshua Short is inside the UP Mall where the doors will be opening in just under an hour from now. Josh how are things going.

News Reporter:                Look we were expecting a big crowd. We don’t have the big crowd that we expected. I got up at three o’clock excited to do my first ever black Friday and ain’t nobody here. I am literally upset right now. I don’t know why people did not wake up.

Paul Jarley:                         Where did all the shoppers go?

Tina Hand:                          Wasn’t worth it so I haven’t done it probably for the last five years.

Jessica Dourney:              I won’t be there cuz I’ll be watching the UCF Knights, our national champs, playing at the, in Tampa.

Paul Jarley:                         Eh, maybe they’ll shop on Monday.

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? On to our show.

Paul Jarley:                         UCF student Jahir Hernandez recalls his most vivid Black Friday memory. It was from behind the cash register at an Old Navy.

Jahir Hernandez:             The pleasure and the privilege of working Black Friday, my hours were from 1:30 a.m. until 12:30 p.m.

Paul Jarley:                         Jahir didn’t love it.

Jahir Hernandez:             My most vivid memories would definitely be that rush I think at around 9:00 a.m. where people kinda get up, they have that turkey hangover where they’re done with that. They come in waves, and I remember specifically that the actual checkout line was all the way to the back of the store and you couldn’t get from one side of the store to the other because that line was so massive. You have people that are super nice that maybe they’ve worked in retail before, they understand the craziness. You also have those other people that are there just to get whatever they want and they’re very upset.

Paul Jarley:                         Who’s responsible? When did all this holiday shopping madness get its start? Black Friday isn’t as old as you think. It started in Philadelphia back in the 1950s, and got its name from police officers who hated being dragged out the day after Thanksgiving to deal with the local shopping madness. It didn’t become a national phenomenon until the 1980s, and by then it was reinvented to be the day that retailers finally got into the black, well, at least that’s the story. Don Unser is a USF alum and retail group president at NPD. NPD is the nation’s leading retail sales data company. If anyone would know when retail companies turn into the black, it would be them. And well Don, he’s a little skeptical of the story.

Don Unser:                         The original roots of Black Friday, it was a point in time at which the retailer turned for the year to be profitable, and there are a lot of myth busting things out there that said did that really happen or did that not happen. I guess back when we had a traditional predictable retail season, when we had just stores and we knew what the season was, we knew what the consumer was going to do, it was this kinda static environment, I think there could have been a relative time on the calendar where there was some profitability.

Paul Jarley:                         But those days are long gone. Here’s professor Anand Krishnamoorthy from our marketing department.

Anand Krishnamoorthy:               The data suggests that either retails are already significantly profitable before Black Friday, or if they’re not profitable by Black Friday they are not turning a profit after Black Friday.

Paul Jarley:                         Don sums up the evolution of Black Friday story this way.

Don Unser:                         It’s just a milestone that they use to create a buying holiday for the consumer.

Paul Jarley:                         But who the heck needs a buying holiday? Anand says, “department stores, for one.”

Anand Krishnamoorthy:               Department stores are traditionally the ones that banked on Black Friday turning things around for them. Traditionally stores that don’t rely a lot on sales promotions tend not to be affected by Black Friday a whole lot. Target and Walmart for example, they’re not into sales promotions, they’re low priced stores right traditionally speaking. So, like if you’re a Ross or a Burlington operations, you’re traditionally not affected by Black Friday. If you’re an upscale retailer, you’re not affected by Black Friday because you don’t discount a whole lot. It is stores in the middle, traditionally have been department stores.

Paul Jarley:                         And online merchants, well, they like to create fake shopping holidays too.

Sean Snaith:                       You know the made up holiday of Single’s Day and Prime Day I think are studies in and of themselves.

Paul Jarley:                         Hallmark might be able to tell us a lot about that, but what do you think?

Sean Snaith:                       Exactly. Neither one of those days mean anything. Matter of fact on Prime Day most people don’t even remember the origin of it, but what Prime Day was is Amazon saw that Jet was about to launch their platform and so they did a Prime Day to put out great deals that would squelch the launch of Jet.com. And that was Prime day. So, the origin of these two days are interesting. The fact that Single’s Day did as much volume as it did and does is absolutely fascinating.

Paul Jarley:                         Oh, it’s more than fascinating. Listen to Anand.

Anand Krishnamoorthy:               How much did Alibaba bring in on Single’s Day four days ago, do you know?

Paul Jarley:                         I can’t imagine. It’s gotta be a humongous number-

Anand Krishnamoorthy:               [crosstalk 00:05:44] an excess of 30 billion dollars alright, in one day. Amazon’s Prime Day brought in four billion dollars or so.

Paul Jarley:                         And then there’s that fake online holiday phenomena.

Anand Krishnamoorthy:               Cyber Monday is the most attractive online shopping day of the year. Brings in I think about six seven billion dollars or so.

Paul Jarley:                         But like Black Friday, online holiday shopping is a bit over hyped.

Anand Krishnamoorthy:               What percentage of holiday sales do you think takes place online. As of last year, what was that percentage?

Paul Jarley:                         I would guess forty percent.

Anand Krishnamoorthy:               It was a hundred billion dollars in change. It was less than twenty percent of all of holiday sales alright. 700 billion sales of holiday shopping take place. Only a hundred billion comes from online.

Paul Jarley:                         Anand’s data tells me, you’re going holiday shopping. If you can’t help yourself and feel the need to battle the crowds in search of that bargain, here’s some things to keep in mind. First, our resident economist Sean Snaith tells us, “It’s going to be a big holiday season. People have money in their pocket, they’re feeling good, and they’re ready to spend.”

Sean Snaith:                       One of the strongest in quite a few years. Take home pay is a little bit larger, and that’s also converging with faster growth in wages and salaries as the labor market tightens. And consumer confidence is at eighteen year highs, people are feeling pretty good. The labor market’s good, the economy is doing well, and those are conditions that are conditions that are conducive to spending.

Paul Jarley:                         And Don says, “Retailers are ready.”

Don Unser:                         I think the retailers are set with inventory.

Paul Jarley:                         Especially with this year’s hot ticket item.

Don Unser:                         We think that the Smart Speaker, the Echo products, and the Google Home products will continue to be very hot this holiday. We think stereo headphones are gonna be very hot, really led by Apple Air pods. Those are just absolutely on fire right now, and for the last year, year and a half those have been in heavy allocation. Retailers haven’t been able to get enough and now they are. We also think that anything having to do with the home categories are gonna be really strong. The Instant Pot, last year, which was a super hot product, and the air fryers. These are two convenience splays basically for the consumer. Both of those will continue to be very hot this year.

Paul Jarley:                         But what about the kids?

Don Unser:                         To tell you some of the hottest toy products, Lol Surprise will still be hot this year

Anand Krishnamoorthy:               I think [inaudible 00:08:17] which is a soft plush doll that comes in a hard package so you’ll have to soak it, rinse, then you’ll dry, but then it becomes a plush doll after you do all of that. There’s another, I think it’s called Hatchibabies, so now instead of Hatchimals it’s now Hatchibabies where you can actually get a boy or a girl from an egg so they’ve taken parenting to the kid’s level with them.

Paul Jarley:                         But there’s not much need to go out early.

Anand Krishnamoorthy:               Traditionally shopping on Black Friday has never been about peoples showing up at three in the morning and waiting in lines. The peak shopping season-

Paul Jarley:                         That’s fake news. Is that what you’re telling me?

Anand Krishnamoorthy:               Not much of the sales comes from there. Much of Black Friday sales actually happens in the early to mid afternoon. So, peak Black Friday shopping time in terms of foot traffic is between two and four in the afternoon on Black Friday. It is not the mornings.

Paul Jarley:                         And it could be dangerous.

Anand Krishnamoorthy:               The numbers tell you that you’re more likely to get killed shopping for a door buster on Black Friday than from a shark bite. Alright, more people die in stampedes on Black Friday.

Paul Jarley:                         You can reduce the likelihood of getting injured, and increase the likelihood of landing that toy by having the family spread out, and using their cell phones.

Anand Krishnamoorthy:               Today, holiday shopping on Black Friday is more engaging because you can now have different people in the family go to different stores, communicate on the phone, and extend information that expands the shopping options for the family and friends.

Paul Jarley:                         So browse at the stores, and if you don’t find what you’re looking for, well then, shop online.

Anand Krishnamoorthy:               Friday online brought in about five or six billion dollars last year. So, when we talk about Black Friday, the old definition of people walking into the stores may not be doing its thing, but people are still shopping in droves online on Black Friday. Traffic on Black Friday doesn’t appear to be significantly off either.

Paul Jarley:                         So they’re browsing and then going home and buying it online?

Anand Krishnamoorthy:               There’s a lot of store roaming going on. They find out what’s going on and then they go to a lower price to a location online, don’t have to leave the house-

Paul Jarley:                         Or if that’s not social enough for you. Consider this.

Don Unser:                         People getting together and going to the coffee shop and doing their eCommerce shopping together. We see some of that.

Paul Jarley:                         I sense a fake Starbucks Holiday on the horizon. It’s time to call the question, is Black Friday still really a thing? From Jahir Hernandez.

Jahir Hernandez:             I think it definitely still is a thing. I think people nowadays are always lookin’ for like one deal. Maybe there’s something that you really want that’s in Best Buy at may three in the morning that you’re willing to get, so I think it’s still a thing.

Paul Jarley:                         From Sean Snaith.

Sean Snaith:                       No.

Paul Jarley:                         Why not.

Sean Snaith:                       Yes.

Paul Jarley:                         We’ll get back to you Sean. From Anand Krishnamoorthy.

Anand Krishnamoorthy:               Yes, and no. Black Friday is not what it used to be in terms of retailers becoming profitable. Black Friday’s meaning has changed. It is not retailers turning a profit that day. It is not about bringing people into the stores at three in the morning. It is also moved online.

Paul Jarley:                         Okay Sean, try again.

Sean Snaith:                       I’ll say yes it’s still a thing because it’s symbolically still important if not important because of where it falls on the calendar as much.

Paul Jarley:                         From Don Unser.

Don Unser:                         Black Friday is not really a thing. Does it matter. It is a point in time in the retail selling season that is a bit of a milestone, if you will, but one of the proof points that Black Friday is not a thing is just look at the advertising that’s done. It really starts in early November, late October. That’s your first proof point that Black Friday really isn’t the start of the holiday season. It is now the beginning of November and the end of October.

Paul Jarley:                         It’s my podcast so I get to go last. I had one last important question for each of my guests. Are you going Black Friday Shopping?

Jahir Hernandez:             Personally, I procrastinate as much as possible and online.

Sean Snaith:                       I for two won’t be going Black Friday shopping. Maybe cyber Monday if I remember.

Don Unser:                         I am going Black Friday shopping. Personally, because it’s my job. I have to be at the malls and I’m live tweeting.

Anand Krishnamoorthy:               Online yes. In store, probably in the afternoon.

Paul Jarley:                         Just to make sure I didn’t miss the target audience for Black Friday, I sought out a few expert shoppers. First from Jess Greene Dourney.

Jessica Dourney:              No, I won’t be there cuz I’ll be watching the UCF Knights our national champs playing in Tampa.

Paul Jarley:                         From my executive assistant Tina Hand.

Tina Hand:                          I’ve done it before. I’ve gotten up at five o’clock in the morning before with my girlfriends, I went Black Friday shopping, wasn’t worth it. By twelve o’clock I’m back home. So I haven’t done it probably for the last five years.

Paul Jarley:                         Notice, there’s not a sense of urgency in any of their voices. When shopping was local, scarcity was a real concern, and retailers could play on this. If you couldn’t find that coveted holiday gift within a reasonable drive of your home, you risked disappointing a loved one, and that drove you to get up early and get it done. Today, shopping is global, and with free two day delivery and stiff competition for the consumer dollar, people have plenty of options other than getting up at three in the morning to get that gift before the appointed time.

Paul Jarley:         Tina Hand nailed it. Sorry Black Friday, you’re just not worth it anymore. What do you think? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show. Special thanks to my producer Josh Miranda and the whole team at the office of outreach and engagement here at the UCF College of Business. And thank you for listening! Until next time, charge on.

The post Is Black Friday Really a Thing? appeared first on Barry S. Miller College of Business.

Stan Horton:                      I was on the Enron executive committee when the company went bankrupt. I just witnessed firsthand how a company can implode just due to poor ethics. I saw good people do bad things.

Paul Jarley:                         It’s not just about good people doing bad things.

Marshall Schminke:        But it’s also interesting to figure out why bad people do bad things and good people do good things. Right?

Paul Jarley:                         It focuses on what people do rather than what authorities say they should do.

Rob Folger:                         The advent of behavioral ethics was the advent of doing research on what people do and why they do it rather than telling them what they should do.

Paul Jarley:                         And it might empower people to step forward and question things. Even when it turns out their wrong.

Merrell Bailey:                  How would you be able to train a teller to say it’s okay to tell a client no and we will back you up and you won’t lose your job and you won’t lose your health insurance and your…

Paul Jarley:                         Even if you’re wrong?

Merrell Bailey:                  Even if you’re wrong.

Paul Jarley:                         Right.

Paul Jarley:                         Behavioral ethics holds the promise of helping companies do the right thing. But will firms provide faculty with the access necessary to help them solve their deepest problems? Or, will they just keep them locked up in the closet?

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?”

Paul Jarley:                         On to our show.

Paul Jarley:                         This podcast is a little different. It was done over drinks and hors d’oeuvres before the Colleges’ Deans’ Advisory Board Meeting in September. We brought together five people with a common interest in ethics, had a conversation, and edited it down to what you’re about to hear. Our guests were:

Paul Jarley:                         Merrell Bailey. Merle is a four-time alumnus of the College. She’s on our Deans’ Advisory Board and has degrees in Accounting and Law. Two fields with extensive codes of ethics.

Paul Jarley:                         Scott Keith is Regional President for BB&T in North and Central Florida. BB&T sponsors both an ethics class in the College as well as the faculty member who teaches that course, Marshall Schminke. Marshall is the BB&T Professor of Business Ethics. He joined us for the evening via Skype because he was speaking at a conference in East France.

Paul Jarley:                         They’re joined by Rob Folger. Rob is considered the Father of Behavioral Ethics. He sits in an endowed position that was funded by our last guest.

Paul Jarley:                         Stan Horton. We caught up with Stan a couple of weeks after the event and added his insights into the conversation. Stan is an alum of the College and the President and CEO of Boardwalk Pipeline Partners. Stan was the only member of Enron’s top management team that was not indicted in the Enron scandal. He closed Enron. It is not a stretch to say that the biggest corporate ethical breach of the last century started a chain of events that led to a whole new way to study ethics and that that is happening at UCF.

Paul Jarley:                         My first question was for Scott Keith.

Paul Jarley:                         Could you explain why BB&T has had a long-term interest in ethics and what it hopes to get out of ethics education?

Scott Keith:                        To BB&T, the people, the values that we have is the culture of our organization. There are three non-negotiables in our organization: our vision, our mission and our values. We want to be the best financial institution possible but the only way that we do that is by living-out ten core value which we deem the ethics of BB&T. We have thirty seven thousand associates; we’re bringing new ones on all the time. We think it’s critical that we invest in the future of not only BB&T but the future of the markets that we serve. To do that, we have the opportunity to team up with wonderful institutions like UCF’s College of Business. For us to be able to partner with Marshall and have a course speaking to young-minded, young professionals with bright futures about ethics and the importance of that in business is helping us live out our mission. It’s critical to our culture long-term. We want to hire folks that live that way because they’ll fit within our organization.

Paul Jarley:                         Stan, tell me a little bit about your motivation for giving the gift that led to the Ethics Chair.

Stan Horton:                      On that, it’s pretty easy. I was with Enron. I was on the Enron Executive Committee when the company went bankrupt. I was the only member of the Enron Executive Committee that stayed during the bankruptcy and I just witnessed firsthand how a company can implode just due to poor ethics. I saw good people do bad things that I didn’t really know if they knew they were doing bad things at the time. But, some of them compounded themselves and after you look back for while you realized that it was the culture of the company and that culture did not stress or recognize strong ethical behavior. When you don’t do that, over time, the culture deteriorates and what happened to Enron, happens.

Paul Jarley:                         I’m going to turn to Rob. Rob, you’re considered one of the founders of behavioral ethics. I’d like you to talk a little bit about how behavioral ethics maybe differs from traditional ethical approaches and training.

Rob Folger:                         Sure, let me say, first of all, thanks to Stan because part of what behavioral ethics is today is because of him, is because of his support. Ethics, for me, or in business schools, for example, it was dominated by philosophers and so ethics was about ethical philosophy.

Paul Jarley:                         Aristotle, right, if we want to go all the way back?

Rob Folger:                         And so, the advent of behavioral ethics was the advent of doing research on what people do and why they do it rather than telling them what they should do. The kinds of things that Scott, for example, wants to be able to promote, how do you promote it? What motivates people besides the inspiration of the leadership of a company when they’re in the trenches?

Paul Jarley:                         Marshal, do you think its fair to say that behavioral ethics is the study of how and why good people do bad things?

Marshall Schminke:        A lot of people would agree that that’s a pretty reasonable place to start. But, I think we go beyond that as well because it is interesting to try to understand why good people do bad things. But it’s also interesting to figure out why bad people do bad things and good people do good things. Right? My big epiphany came; I spent eight years a an academic fellow with the Ethics and Compliance Initiative. They’re a group of about sixty or so Chief Ethics Officers from Fortune 50 level firms and people from the SEC and VA and that sort of thing. You don’t have to spend very many years with a group like that to figure out what they’re interested in is what levers do we pull to get the sorts of behaviors and the sort of commitment that we need to see among our ninety thousand employees.

Paul Jarley:                         How about you Rob? Would you agree with that?

Rob Folger:                         Oh, yeah. Oh, absolutely, I think that the experience of people in business many times is they don’t always know the levers to pull the buttons to push in a positive, promotive way.

Paul Jarley:                         Merrell, you have degrees in two areas which have had a long history of ethical codes of behavior, and training people to abide by those ethical codes of behavior, and so talk a little bit about what’s been the traditional approach in accounting and in legal areas to questions of ethics and what you think might be the value of behavioral ethics, or not.

Merrell Bailey:                  Well to quote Marshall, my epiphany was realizing that two different professions, because I’m licensed as a CPA and also as an attorney, can have different ethical standards that are completely diametrically opposed. I don’t think most professions realize that they have different ethical standards. So the ethical standard for a CPA is, for auditors, they’re supposed to keep everyone informed and share information on an equal playing field. And attorneys, we have to advocate for one person and forget all the rest. I’ve got this information, I’m going to use this information and I’m not sharing it and, in fact, it would be a breach of my duty if I did share it. So, I think that’s part of the tension of CPA’s working with attorneys because the CPA is like, “Well if we all would work together and you gave up this we, and I gave up that, we’d all have a really great solution” and the attorney is like, “Screw you. I’ve got my client and I want all of the pie”.

Merrell Bailey:                  Every single profession that I deal with has a different ethical standard.

Paul Jarley:                         Hmm. What would behavioral ethics have to say about that gentleman? About resolving those conflicts where ethical standards vary?

Rob Folger:                         Ah, it’s interesting you’d bring that up. There’s a topic that is one of our core topics. It’s called Role Morality and it’s about the conflict of different standards in our… the different hats that we wear. The technical definition of the term is when you would do something in a given role, like at work, that you wouldn’t otherwise do outside.

Paul Jarley:                         Can you give us an example? Have you every had a situation where the accountant ethics in you conflicted with the lawyer ethics in you?

Merrell Bailey:                  It primarily would have to do with negotiating a contract where I was representing two out of three partners. We had all the information as CPA’s. We knew all the financials. But I was actually representing these two as an attorney and the other attorney was not a CPA, that was representing the third party, and he didn’t understand the numbers. He just rolled over on something that was so, on a CPA level, was such an easy thing that he should have held his ground. But as an attorney, I was like, “Yeah, well we’ll just… okay” then I moved right on. ‘Cause it was in the best interest of my clients and I was representing them as an attorney so I had a duty to do that.

Paul Jarley:                         Mm-hmm (affirmative)

Paul Jarley:                         Scott, what do you see as the main ethical dilemmas in your world and how do you try to address those?

Scott Keith:                        They vary based on the constituents that we’re talking about. Generally, when we lend money out, fundamentally we want to know two questions: Can you pay us back and will you pay us back? We identified ethical challenges in our client selection during the last major recession where we had individuals that could pay us back for a period of time but chose not to. When we have our client selection and engage with our clients we want to understand, I’ll say their ethical motivations. We want them to be like-minded to us and with us. But, they also have to trust us. They share personal information with us, business information with us. We have to be confidential in our professional endeavors with them. And that trust, generally, is built over a long period of time. We’ve been around since 1872. We’re proud of the fact that we have become a trustworthy organization, but we have to earn that every day. And the other constituent are our associates, so when I think about our support for the teaching and the encouraging of ethics in business through the university, and the students that are able to go through that. They’re learning a piece of what we hope when they look to apply to our financial institution, that they see it matches up with our culture.

Scott Keith:                        So it’s important that we hire individuals that are going to support the cultural way we go about business. It’s really important that when do that, that we then let them be who they are, and watching them do good and right things every day transparently, even when we have to admit when we’re wrong, is encouraging and good.

Scott Keith:                        When we miss that, when we make a mistake, we wanna be honest and open about it.

Rob Folger:                         Paul, I wanna jump in here just for a second.

Scott Keith:                        Sure.

Rob Folger:                         It’s interesting that you would mention being honest and admitting your mistakes because just the other day I was asked by a reporter to talk about the fraud case involved Sea World where precisely what they didn’t do was to get out in front of it and admit what they done and so the CEO lost his job. SCC filed a case. And he had to pay a financial fee as well.

Paul Jarley:                         Stan, tell me if I got this right. I remember you telling me that [Ken Lay 00:12:16] had come back from being Chairman of the board to being CEO. And he picked up a rock and he thought oh my god I need to fix this. What he didn’t know at the time, if I remember your story right, was that we legally required to report it right then.

Stan Horton:                      Yeah. That was my belief, and knowing Ken Lay, he was the son of a Baptist preacher. I first met him back in the early 70s when I went to work for Florida Gas, and he was a man that if you looked at and knew you would stray, he had a very strong ethic, and I believe that, in my own belief, I don’t think Ken understood what was happening at Enron. A lot of the day to day stuff he had given over to others.

Stan Horton:                      And then when Mr. Skilling left Enron and Ken came back as CEO, it’s my belief that he didn’t really know what had gone on in some of the financial structuring that later proved to be illegal, but as he found out about them, you have an obligation under security laws to report those.

Stan Horton:                      But if you’re someone that has your entire persona tied up in a company, your financial net worth tied up in a company, who you are as a person defined by all of that, there is a tremendous incentive to not disclose that and try to fix it, especially if you’re someone that had a history of an entire lifetime of being able to fix things.

Merrell Bailey:                  To me, I look at the Arthur Anderson portion of that and it, to me, breaks down to two different employees, not knowing where the line was or being so tired they forgot. So the lawyer said to Arthur Anderson delete the documents, spread the documents. And the auditor did it. It was not illegal in the long run. They found out it was not illegal but it was unethical on both sides to have deleted those documents.

Merrell Bailey:                  I would not have done it and what I tell CPA’s and young attorneys coming up is you need to know that line, and you need to go into an engagement knowing where the line is and you need to never forget where it is, because you’re gonna get tired and you’re gonna have people pushing you and you’re trying to please people, but you have to know where to hold the line.

Scott Keith:                        Oh I think that’s where a culture of an organization comes in.

Merrell Bailey:                  Yeah.

Scott Keith:                        If you feel like you can’t raise your hand or identify an error or mistake or an egregious act that’s going on then it likely can continue and I think a large organization, small organizations, they have to, from a leadership perspective, foster a culture of being willing and comfortable transparently identifying and understanding that.

Paul Jarley:                         Stan?

Stan Horton:                      I always challenge my Human Resource department to come up with ways and I must admit, I’m not sure that we’ve totally done it. How do we incentivize ethical behavior? Most compensation in a corporation is built around achieving financial goals. Net income goals, cash flow goals, balance sheet goals. How do I take that and marry it with the culture that you wanna build in an organization and I believe that culture, the foundation of it, has to built on a strong ethical as I tell our new hires, I just want you to do the right thing, every time. Just do the right thing every time.

Paul Jarley:                         Marshall, I’ve heard three different kinds of variables here that might influence whether people act in an ethical manner or less than ethical manner. The first one, fatigue. Maybe personal situational issues. Secondly, would be culture of an organization. And the third would be incentives. And maybe misaligned incentive.

Paul Jarley:                         Do you have any sense from a behavioral ethics standpoint, which of those three category of things is likely to dominate?

Marshall Schminke:        Well, you sort of hit something close to me because I’m an ethics culture researcher. That’s kind of on me.

Scott Keith:                        Give us a softball buddy.

Marshall Schminke:        So of course I think [crosstalk 00:16:24]. And one of the reasons, and it’s not that incentives don’t matter because clearly they do, and people not thinking enough moves ahead is that first step toward doing the perp walk. Most of these guys that you end up seeing doing the perp walk, they’re not people who woke up six months ago and decided to engage in broad based unethical practices towards their clients or employees or whatever.

Marshall Schminke:        Some do, clearly. But the lion share of those folks basically made a bad decision that they didn’t really think through far enough and then woke up the next morning and they saw they dug a little hole and they think they’re doing their best at filling that little hole, and next thing you know there’s another line gets crossed, and next thing you know we’re doing 10 years in Duluth Federal Prison Camp.

Marshall Schminke:        I’m a guy who’s committed a lot of years now to studying ethical cultures and ethical climates and what makes those tick, and that’s the one that I end up circling back to.

Marshall Schminke:        Some of the big projects that we did while I was with the ERC, one of the most surprising things that we found out of that, that when it comes to what really drives the average workers decisions on a day in and day out basis, was that it’s those first line supervisors, where all of the action is.

Marshall Schminke:        As far as the average employee is concerned, that immediate supervisor is the organization, and the kind of standards that that first line supervisor sets has a bigger impact than top management, colleagues, all of those combined, and that’s a culture thing, right. I mean, culture happens rights down at the work unit level.

Paul Jarley:                         Rob?

Rob Folger:                         I also wanna add a favorable word to economists, behavioral economists in particular, and the notion of nudges may not always have the best ethical flavor, but there definitely are cues, triggers, in situations that can make a difference. Positively and negatively. As well the structure of the situation.

Rob Folger:                         I mean, sometimes we put employees in situations that don’t incentivize them so much to cheat as encourage the need to use a work around, to stretch the rules, and that’s another one of the many issues.

Rob Folger:                         I don’t always try to pin it down to one particular thing.

Paul Jarley:                         Mm-hmm (affirmative). Could you give me an example of that, of a situation where there’s that nudge?

Rob Folger:                         Well, I’ll give you one that’s a positive nudge.

Paul Jarley:                         Okay.

Rob Folger:                         And that is if we encourage people to make a commitment up front. I mean, something … I know this sounds simple, but having people have people sign something. Turns out, we find from research, that if they sign first, an honor pledge for our students, for example.

Scott Keith:                        Take the oath. Right. Sure.

Rob Folger:                         Yeah. Rather than at the end. That’s a very simple little thing that makes a difference.

Rob Folger:                         But another one is if people have a chance to cheat, but before they do that, if you ask them to recall as many of they can of the 10 commandments, they don’t cheat as much. It doesn’t matter if they can actually remember them or not.

Scott Keith:                        It’s just the priming effect, is what you’re telling me.

Rob Folger:                         Exactly.

Scott Keith:                        You know, Paul, in our organization, every year we re-certify our acknowledgement and understanding and commitment to the Code of Ethics that we have, and that we think it’s very important, that it is foundational to the culture that we strive to live out every day.

Scott Keith:                        And so, some of the most important individuals in our organization are tellers. So we put structure in place to make sure that we don’t inadvertently create a scenario where in the wrong moment at the wrong time, a good person may consider doing the wrong thing.

Scott Keith:                        There’s a reason why tellers need to balance their drawer every single day, and it’s because it’s our depositors money that we’re taking care of and it’s a trust thing and it’s also, these are great professionals with hopefully long careers. We want them to do it with a confidence that there’s not something that might trip up.

Scott Keith:                        So I think structure in many roles within many organizations should help alleviate some of the potential of possible cues that might lead you into doing something that you otherwise wouldn’t want to do.

Paul Jarley:                         [Meryl 00:20:43], do accountants and lawyers regularly get training on ethics and ethical decisions here in the state of Florida and what’s that like? If you could improve it in a way, how would you do it?

Merrell Bailey:                  Both attorneys and CPA’s get trained in ethics and in fact, for the CPA exam and for the bar exam, there’s a separate portion for each just on ethics. There’s some room for improvement with the Florida Institute of CPAs for their ethics training, because right now it pretty much consists of someone who has a certain amount of experience, who is currently licensed, reading from the book.

Merrell Bailey:                  It is the least entertaining or memorable experience of your life and you have to sit there for a couple hours a year.

Merrell Bailey:                  If they would bring in some talented or younger, not necessarily younger in age, but younger in experience teachers, they would have a better outcome.

Scott Keith:                        But that isn’t that different, and I don’t mean to make light of this, but that approach isn’t that different from reading from a religious text. If I understand behavioral ethics, one of the lessons of behavioral ethics would be yeah, that’s probably not gonna work out all that well.

Scott Keith:                        Is that fair to say Marshall?

Marshall Schminke:        Yeah. I mean, I think the training issues a really tricky one because most corporate training has really been focused a lot on the failures we have in ethical decision making, but you don’t learn ethics the same way … I mean you don’t learn how to swing a golf club or play a piano by reading a book. Ethics is something that you do and I think that’s one of the ways that those involved in behavioral ethics really take a different perspective on this. That really has a strong implication for the way that we set up ethics training programs.

Marshall Schminke:        The other component is that it’s not just all about making ethical decision. You can know the right thing to do and still be shut down in, sort of face a road block in whether or not you carry through on that based on whether you care at all about the person on the other end of that action. If they’re not morally relevant to you, then you can know all day long what the right decision is, but you’re not going to carry through.

Marshall Schminke:        And the final piece I think that turns out to be really important in corporate settings is people have to believe that even if they know the right thing to do, and they are about the customers or the community or whoever it is that’s on the receiving end, that they have the ability to actually execute on that. There are lots of folks who would really like to be the ones to stand up and say this stops now, but if they don’t think they’re in a position to actually make [inaudible 00:23:16] impact on things, they’re not going to carry through on what they think the right thing to do is.

Rob Folger:                         A couple of footnotes on what Marshall said. One, a marketing plug and the other an anecdote. The marketing plug is for Marshall and his wife who wrote a terrific paper on the idea of road blocks that get in the way of people acting ethically. This anecdote is about not learning from a book. I went through an ethics training program, sponsored by a large organization. We went to their campus. Their training campus and we had all sort of authorities speak to us. The company that sponsored that was Arthur-Andersen.

Paul Jarley:                         One of the things we really value in the college is engagement and bringing practitioners and researchers together. When I ask my practitioners, “What’s the biggest problem you would like to see faculty do research on in ethics that would help you out?”

Merrell Bailey:                  I think it comes with having the backbone to say no. Most people don’t know that it’s okay to say no, or their hesitant to say no and they’ve been put in a situation where they’re expected to say yes to doing something that they may know is wrong.

Paul Jarley:                         Scott.

Scott Keith:                        Yeah, I think a little hitting on actually the paper that Marshall co-wrote with his wife, if we had the ability at BBWT with our leadership institute, we dive into a lot of the biases that our teammates have and we study that. And our leaders spend a week at managing leadership dynamics to understand themselves and how they interact with each other. And we try to understand where we get in our own way. And so in getting in our own way, can we connect those dots to understand just to the point when unethical behavior is in front of us, when there is a cue, are we identifying the biases of those that might be shut down from saying it and being able to, as an organization, clarify that we want them to step up in that situation. To raise their hand. And obviously from an organizational perspective, more insight as to how do we continue to strive to have a culture of accepting and encouraging that? And making sure that there’s no harm or concern for someone that identifies that.

Merrell Bailey:                  But how would a teller know that he or she is allowed to say no. How would you be able to train a teller to say, it’s okay to tell a client no and we will back you up and you won’t lose your job and you won’t lose your health insurance and-

Scott Keith:                        Even if you’re wrong.

Merrell Bailey:                  Even if you’re wrong.

Paul Jarley:                         Stan, do you have any policies or procedures in place for people who want to report unethical behavior?

Stan Horton:                      Yes we do. First of all, we have a hotline that people can call and report anonymously. Those calls do not go to me, they go straight to our General Counsel. You can remain unnamed, but we need enough information that we can research and verify whether the accusation is correct or not. Or you can go directly to the CEO if you want to, or you can go through Human Resources.

Paul Jarley:                         Have you tried to measure the number of ethical lapses that you have in your organization each year?

Stan Horton:                      Only by looking at … If you say ethical lapses, I guess the answer to that would be no. Because I’m not quite sure how to do that. We can measure incidents that we’ve had, we can measure our safety record against the industry, but some of those things aren’t really ethical lapses, some of those things are just things that happened that … Equipment failure, things like that. So I haven’t been able to figure out total ethical lapses.

Paul Jarley:                         Okay, time for our faculty to give back. If you had one or two key insights of behavioral ethics that you would want to make sure that a practitioner knew, that you thought was useful, that would add value to their day, what do you got Marshall?

Marshall Schminke:        I talked about a couple of those here tonight. Let’s focus on first line supervisors, those folks just get completely ignored. They don’t get the attention anywhere near the impact they have on the organization. So that’s something that really has to be key. I mentioned another one previously, about it’s gotta be more the training and the programs and such have to be something at work beyond just compliance. It’s gotta go beyond that and it’s gotta go beyond just thinking your way through ethical problems. You have to understand how to sort of put yourself in the shoes of the folks across the table from you and make sure, and we talked about this a little bit earlier, make sure that the folks have this understanding that when they decide to be the one to stand up, somebody’s got their back.

Marshall Schminke:        Make a little bit of a pivot on those two fronts in terms of the kind of training that gets done. These are quantifiable, measurable outcomes. But one of the things that I came away from with the ERC group, a lot of those firms were high-tech, manufacturing, defense contractors and such. These guys measure everything. And they could make a pivot on a piece of training technology for 90,000 employees over a weekend and six months later they were able to demonstrate in terms of quantifiable outcomes related to things like amount of pressure that employees were feeling. The likelihood that they would pick up a phone and actually report wrong doing. All these things that they really wanted to see. Those are quantifiable outcomes.

Marshall Schminke:        And so as part of the training program, we’ve gotta have really solid, quantified baselines on those things. And then as you start to pull levers, you see relatively quick improvements, or at least changes. You’ll know what’s working and what’s not for you. And lots of companies I don’t think give adequate attention to that sort of quantifying and measuring aspect of ethics. They think it’s a little fuzzier than that, but in the aggregate, you can really just watch the needles move on these things if you’re careful about how you measure things up front and then continue to do that regularly as part of your employee survey.

Paul Jarley:                         Rob?

Rob Folger:                         We need to be more cognizant of human frailties. It’s not just people who are evil and malicious who do the bad stuff. That gets all the attention, that gets all the news. But the simple concept of the slippery slope. They’re edging toward the line, the edge of the line. So that’s one thing I’d say. And the other one, to piggy back on that is that common sense can be a lot of it. But common sense is not always common practice. And we need to teach people how to put into practice some of the things that they already know.

Paul Jarley:                         Is there anything that you learned tonight that you thought was useful that was worth pursing? Merrill?

Merrell Bailey:                  I think behavior ethics is a thing, because the more people that understand that there are morals or ethics and where the lines are and they have the right to say no, the better off the society would be.

Paul Jarley:                         Scott?

Scott Keith:                        Yes, I absolutely think behavioral ethics is a thing. So I vote yes on that. I see it everyday in the associates that I get to work with and I think that you can see it around in society. I really do. I do think that there needs to be continued cooperation with academia and businesses so that we can evolve and become better. And I love the idea of how do we continue to partner to get there. I think that’s really important.

Paul Jarley:                         Stan, do you think your money’s been well spent?

Stan Horton:                      Yes I do. And when I looked up the definition of a “thing” it’s that it was an action or an activity or a thought and I think ethical behavior is an action. I think you choose to be ethical or not. I think it’s an activity. I think it’s a thought process that people utilize. So yeah, if I didn’t think that they were onto something, I would probably come talk to you.

Paul Jarley:                         It’s my podcast, so I get to go last. Marshall and Rob don’t get a vote. They’ve devoted a good portion of their lives to studying behavioral ethics. One of the people in the audience called behavioral ethics old wine in new bottles. Ironically, she had worked for Arthur-Andersen and Ron left a bad taste in her mouth. I suspect that she thought bad people who want to do bad things will find a way. That said, the key insight from behavioral ethics is that ethics is not squishy. It’s measurable. Prone to both positive and negative influences. And needs to be practiced everyday if it’s to remain resilient. It isn’t something that you just train people to do on Thursday. First line supervisors carry a lot of the burden here and they need the support of higher-ups to ensure that things are done the right way, rather than the expedient way.

Paul Jarley:                         Is behavioral ethics a panacea? Of course not. But it certainly beats people reading from a book. Companies willing to partner with researchers can uncover actionable insights to improve ethical behavior. It really is a thing. What do you think?

Paul Jarley:         Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show. Special thanks to my producer, Josh Miranda. And the whole team at the office of Outreach and Engagement here at the UCF College of Business. And thank you for listening. Until next time, charge on.

The post Is Behavioral Ethics Really a Thing? appeared first on Barry S. Miller College of Business.

Paul Jarley:                         It makes you believe there’s no such thing as truth.

Grant Heston:                   There’s a lot of things labeled fake news that people just don’t like.

Paul Jarley:                         It’s a popular Halloween costume.

Rick Brunson:                    There are companies selling fake news costumes. You can dress up in a fake news … It’s plastered with newspaper pages and it has red fake across the front … Yeah. $54.95 online.

Paul Jarley:                         And combined with data analytics, it can be, well, clickalicious.

Cindy Barth:                       There are certain things that we know all we have to do is put these keywords in a headline, and we’re going to have what we call a clickalicious day because everybody in town is going to be going, bang, bang, bang, bang, bang on that story. We know that.

Rick Brunson:                    Where, oh where have you gone, Walter Cronkite?

Walter Cronkite:              That’s the way it is. Friday, March 6th 1981.

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:                         Let’s talk a little bit about how the world is changing in really broad strokes. When we were hunter gatherers and we started to plant crops, land was the most valuable thing and the people who were the richest and the most powerful owned the most land. And then machines were invented, and the Industrial Revolution happened and market economies occurred. In that, who owned the most machines became the most powerful people. Today, the most valuable asset is information. It’s data. And the most powerful people in the future are going to be the people who control the most data, and they can use that data either to help inform you or they can manipulate you with that data.

Paul Jarley:                         This gets us to the topic of fake news and whether fake news is really a thing or not. Is this something that 10 years from now we’ll kind of laugh about and move on from, or will it be a part of our daily lives? And if it is, how do we determine what’s fake from what’s real out there? That’s certainly something that my students need to know how to do, or we’re all doomed. So, I brought together a panel of experts to talk a little bit about fake news, what it is, and whether it’s really a thing or not. So I’m going to allow my guests to kind of introduce themselves. I’ll start with Grant.

Grant Heston:                   Sure. Thank you, Paul. I’m Grant Heston. I’m our Vice President for Communications in Marketing and Chief of Staff at the University of Central Florida. I got my undergraduate degree in journalism from a university about 90 minutes north of here, a little bit smaller than us. Football team is not quite as good. And so I live and breath with this every single day.

Cindy Barth:                       Hi, I’m Cindy Barth. I’m Editor of Orlando Business Journal. I am a UCF graduate. My degree is in journalism with a minor in political science.

Rick Brunson:                    Morning, everybody. My name is Rick Brunson and I’m an Associate Instructor of Journalism at the University of Central Florida where I’m also a proud alum. Got my degree there in 1984 and became a reporter and editor for the next 30 years and have been really privileged to return to the university where I learned about journalism and I teach it there now. Glad to be with you.

Paul Jarley:                         Thank you all for joining us this morning. Rick, since you’re the academic in the group and academics love definitions, let’s start there. What is fake news?

Rick Brunson:                    If you start with the word fake, it means counterfeit, which means there’s something real to judge it against. If you start from that point, then there’s hope because there is something real to judge it against. The thing about the term fake news, it’s become very elastic in the last couple of years. We used to think of fake news as that news or information that was intentionally falsified and based on untruths with the intent to deceive the public. Now that term has been elasticized in the American mindset to also encompass things such as editorial decision making that is crafted with the intent to deceive or mislead, and it’s also become politicized where fake news is the news that I don’t necessarily agree with. And so it’s a very mushy, mashed up … I did notice this morning that next week is Halloween, and there are companies selling fake news costumes. You can …

Paul Jarley:                         Then you know it’s a thing, right?

Rick Brunson:                    There you go. You can dress up in a fake news … It’s plastered with newspaper pages and it has red fake across the front. Yeah. $54.95 online, so, yeah. There you go.

Paul Jarley:                         Fake news is expensive. Cindy, would you agree on that definition? Do you have anything to add?

Cindy Barth:                       I would. I think the most dangerous thing is just that everyone has kind of their own definition of fake news sometimes, and for me in journalism, fake news would be something that is just completely not based on any fact at all. But for many people, as Rick shared, if they don’t agree with something that you write, all of a sudden it’s fake news. And it’s a very easy thing to just throw around nowadays because you hear it used so often. So to me, that’s a very alarming trend, is just how quickly we immediately turn to calling stuff fake news without really thinking it through.

Paul Jarley:                         Grant, where did fake news come from? Should we blame Facebook?

Grant Heston:                   Goodness gracious, you would ask me that question. I think fake news has been with us forever. It’s just the medium has changed right now and it seems easier to share and be duped by fake news than it was 100 years ago when you had newspapers and the beginnings of broad, really mass communications. But no. I think it’s been with us for a long time, and to your question to the start, I think it’s going to be with us into the future and that’s why understanding it, recognizing it, and coming up with ways to combat it is more important now than probably it’s ever been.

Paul Jarley:                         So what motivates it? What problem is it solving?

Cindy Barth:                       It’s basically reinforcing what you already believe in many cases. I think a lot of times I see things in people’s Facebook feed where they will post something and someone will immediately debunk it and say this is fake. Here’s the site. Go check this. But it still remains in their sight because it’s something that they’re already convinced in their mind that they believe and it’s correct, and so that’s the difficult thing. How do we get back to a point where we will be people who are curious enough to actually figure out is this real or not rather than just believing it right off the top of our head.

Paul Jarley:                         But is it fair to say that fake news is meant to provoke, that it’s meant to elicit an emotional reaction and perhaps a behavior that follows that? Is that where it comes from?

Grant Heston:                   I think it’s meant to influence. It’s meant to try to either reinforce your point of view, or often times just get you to give up. The truth is knowable. We can find the truth, and I often think the point of fake news is to try to blur those lines just to say, you know what? We’ll never know the truth about this, will we? And that’s a dangerous place to be.

Rick Brunson:                    In the last election cycle which we’ve now parsed and studied and there have been criminal indictments from the Criminal Justice Department in terms of Russian and other offshore troll companies and troll farms that deliberately put fake news stories in social media with the intent to disrupt our election process and to so discord among Americans so that we fight about hot red button issues like immigration and other things, and it’s meant to disrupt democracy, frankly, when it comes from offshore overseas, I think.

Paul Jarley:                         And data analytic techniques allow me to amplify that now, right, because I know what you click on and I can continue to feed you more of that to make it seem like it’s even more important and happening more often than you might otherwise think and reinforce what you think about that going forward.

Grant Heston:                   No. I agree. I think we are becoming very much creatures of our own bubbles, of our social media, of our own reading habits. I’ve heard Rick say this before. If you subscribe to the New York Times, that’s great. Subscribe to the Wall Street Journal too. If you watch CNN and MSNBC, tune into Fox News as well. Expand your world view, and maybe you won’t agree with everything, but you’ll get a different perspective. You’ll see how other people are being informed and that makes you better able to understand the world around you.

Paul Jarley:                         So has fake news influenced real news? I’m picking up on something Grant said there a minute ago. If you watch CNN and you watch Fox News, it’s hard to believe they live in the same world. Whatever your politics are, it doesn’t really matter. It’s just really hard, and I wonder if some of that is a reaction to what’s going on in social media and perhaps fake news, generally. What do you think, Cindy?

Cindy Barth:                       I think there has been a definite change, particularly in broadcast news. I remember when I was little growing up in the Walter Cronkite days, and Walter would just tell you the news and it was pretty much up to you to figure out what you thought about it. I’m sure he had very strong opinions on a lot of things, but at that point you didn’t express that as part of your news coverage. We blurred the lines a little bit over time where we’ve become a bit little out front sometimes with where we stand on issues, and I think that has created a little bit of the confusion as well. I don’t think that any news organization sets out to try to be influenced by it because we all have the same standards where we must report factually, we must present both sides, we must have all of that in our coverage, whatever it is that we’re writing or broadcasting. But I think it has made it a very interesting arena now for news.

Paul Jarley:                         Would you agree with that, Rick? What are you thinking?

Rick Brunson:                    I would, and I think it’s caused a lot of news organizations to look at their own editorial processes … Shore them up. The struggle has been to keep your eye on the ball as a journalist and try to stay true to your ethics and your values when we’re in an environment where you’re constantly attacked rhetorically and in some cases physically. I had an alum in my Monday night journalism class who just got back from covering hurricanes Michael and Florence. He works for the Associative Press. He’s a videographer. And while he was on a flooded public street up in North Carolina filming people as they were evacuating their homes in boats and loading their belongings and goods and their pets to get out of harm’s way, a man came up to him and screamed at him and said, you’re fake news. We don’t want you here. Knocked his camera over and punched the guy in the face. He showed us video of this.

Rick Brunson:                    What was interesting to me was that he did not include that incident in his reporting. I think I would have, but he didn’t. Instead he chose to focus on a North Carolina man who was using his own personal watercraft to get his 88 year old mother out of her house. Rhetoric has become incendiary and it can lead to real punches being thrown, so I’m concerned for some of my colleagues who are out there in the field who are under constant …

Rick Brunson:                    The barrage of, you’re the enemy of the people, you’re fake news. Most people are not going to act on that, but a small subset of people, like this man in North Carolina can, will and do. That’s not only an attack against the individual journalist, but I think that’s an attack against all of us who think that a free vigorous press is crucial and essential to a democracy.

Grant Heston:                   It’s the first amendment, right?

Rick Brunson:                    Exactly. For a reason.

Grant Heston:                   Okay, the first amendment. The very first one.

Paul Jarley:                         So I think when people think about fake news, they naturally go to politics, but I run a business school. Is there fake news in business, Cindy?

Cindy Barth:                       Of course there is!

Paul Jarley:                         What’s it like and what’s it’s purpose?

Cindy Barth:                       Well I think sometimes we find when we get news from companies and stuff sometimes, let’s say you’re a public company and you really had a core performance like here. So you want to highlight this instead. So you make sure that you’re highlighting this and you’re hoping that we’re not thorough enough to actually look at the entire report and see what you actually did over all. Sometimes it can be as simple as that.

Cindy Barth:                       Sometimes even it’s cases where the business can become the victim of fake news. Look what happened in 2016 with the Pepsi company when word linked out that they said, “Yeah, we don’t want any Trump support’s business.” Okay, the CEO never said that, somebody just manufactured that and then all of a sudden you have people protesting, boycotting, doing this kind of thing against a business that actually didn’t have any involvement in what was said. So I think it can work both sides of it.

Paul Jarley:                         How about in University settings, Grant? Is there fake news? Do you have to deal with fake news?

Grant Heston:                   I don’t know if I’d call it fake news. Again, I worked as a reporter, I have my undergraduate in journalism, so I have the utmost respect for it. I might call it more lazy news sometimes. Reporters will come and say, “hey’ we’re doing a story about XYZ, we need a quote from you about it.” And we’ll say, “Well, have you looked at this? Have you looked at this? Have you looked at … ” “Well, no, I just need a quote from you. Can you just give me a quote for this story that’s already written and done.”

Grant Heston:                   And so, that’s just more lazy and I think media companies are just in really tough times right now. I think that’s just a symptom of it. We probably deal more with lazy news than we do fake news, thankfully.

Paul Jarley:                         Even in college athletics, would you say that? So is Danny engaging in fake news right now in his campaign to get us into the college football playoffs?

Grant Heston:                   Paul I thought we were friends. There would be no athletics questions on this podcast. No I-

Paul Jarley:                         I’m still mad at Danny for called esports not a sport and they’re not athletes.

Grant Heston:                   No, I think that’s … We’re doing what organizations that are proud of their accomplishments do, which is say, “Look at what we’ve done. Look at the facts.” So if someone says, “Well you guys aren’t really scheduling power five teams.” Well, we played Stanford, North Carolina, Georgia Tech, Pitt, Michigan, Ohio State, all within the last five years. Those are the facts. So let’s have a conversation based on the facts and based on outcomes and then see where that takes us, not the perceptions of institutions from 15, 20, 50, 100 years ago.

Paul Jarley:                         Wow. Just so you know, everything in our podcast eventually comes back to the UCF National Championship football team. That’s really why I [crosstalk 00:16:34].

Grant Heston:                   I like it, I like that for sure.

Paul Jarley:                         I try to get that into as many of the podcasts as I can… So if fake news is real, how do we combat it?

Cindy Barth:                       I think you have to get to the point where you want to make sure that you do your own investigation of things. I mean, there’s lots of places where you can check to see if something is real or not. You can check Politifact. You can check a lot of these types of sites where you can take a look, make sure that what you’re reading actually is factual. I think you also have to look to see, who else is reporting this?

Cindy Barth:                       Sometimes you’ll get something kind of in a vacuum that just suddenly appears out of nowhere. If nobody else is reporting it, that should be a red flag almost immediately.

Paul Jarley:                         Can I push back, just a little Cindy? I don’t think your strategy is wrong, but I’m going to actually go back to something Grant just said a minute ago. I’m lazy. You know what? I’ve got a ton of information. The last thing I need is more information. I might be short on meaning, but I’m not really short on information.

Cindy Barth:                       Yeah, and that’s why fake news is making such headway right now, because we won’t push back. People are lazy and won’t look at it. You can try to argue with folks and say, “Hey, let me point you to where you can actually find this.” And they still may chose not to actually do that.

Paul Jarley:                         Well, Rick, I hope our colleagues over at Nicholas’ school are thinking about this a little bit. You got a few things you want [crosstalk 00:18:05]?

Rick Brunson:                    Yeah, we think about it a lot. In my own classes, I teach my students about the different between skepticism and cynicism. Skepticism is intellectually rigorous. When you chose not to take something at face value, but then you take the next step to investigate it for yourself and check it out for yourself. You’re not being lazy.

Rick Brunson:                    Cynicism is lazy. Cynicism dismissed out of hand any information that’s being presented to you because you just automatically assume that the source that it’s coming from lies. So you don’t make any effort to investigate for yourself and your brain turns to mush. You’re a happy little cynic. You’re self satisfied because you think you know because you assume that things are not true because a person is lying. Right? That’s lazy. It doesn’t make for good citizens. Good citizens are skeptical, just like a good journalist should be skeptical, but not cynical.

Rick Brunson:                    I think to Grant’s point, where we get in trouble in journalism is when we let our skepticism turn into cynicism. Then when the story is already predetermined and you’re coming to Grant for a quote to fill in a gap because you already got the story in your mind because you already assume certain preconditions about things or people, that’s people a cynical journalist or a cynical reporter. That’s not healthy for democracy either. So good, rigorous skepticism.

Rick Brunson:                    I tell people, look for news organizations that have rigorous systems internally of authentication. The [Austric 00:26:03] Journal for one, I’m getting ready to leave here today, go back to the campus and I’ve got 25 students sitting down for the Dow Jones News Fund Exam for their national internship program. Dow Jones is the slowest notification on my feed. When something breaks, I hear from six other companies before I hear from the Wall Street Journal. They’re slower. I don’t care because they have six levels of fact checking and authentication before they put something out. Because they do that, I trust their information more than somebody whose headline is coming across my screen first.

Rick Brunson:                    Look for and support with real money, a subscription, or if it’s NPR and PBS a gift or donation, support sources of information that have good rigorous internal mechanisms of fact checking before they put information out. So that was my advertisement on that.

Paul Jarley:                         So I’m reading a book right now called 21 Rules for the 21st Century. There’s a chapter on fake news. I’m a big believe in simple rules. The simple rule that was offered there is that if you’re not paying for your media, you probably shouldn’t trust it. Is that fair?

Grant Heston:                   I think that’s very fair. I mean, journalism and reporting, it’s a profession. You go through training and you go through rigorous work. Just like if you were going to go to a doctor, you want to make sure they know what they’re doing, they practice it, they had recommendations, you should do the same thing for your news sources. Make sure you go to places that are trusted, that have processes like Rick said, in place, that can put up guards against fake news getting into the stream.

Paul Jarley:                         None of you mentioned regulation or legal action as a potential solution to the fake news problem. Why?

Rick Brunson:                    Well, it’s on the minds of certain Americans. IPSOS just did a poll where the good news was that 85% of Americans believe idealistically in the concept that a free press is essential to a democracy. So 85, that’s the good news. There’s a critical mass of people who still believe that a free press is important and crucial to a democracy. But 26% of Americans in that same poll said that the president should have the power and ability to shut down news organizations that “do bad things.” So, one in four american are ready to toss out the constitution to give the president the ability to shut down news organizations that do bad things whatever that means. There’s people ready to agree with changing libel laws and things like that to make it easier to shut down press organizations that they don’t like or think are doing harm to the country.

Paul Jarley:                         But you’d rather have the fake news out there than to give government the power to do that?

Rick Brunson:                    Absolutely.

Paul Jarley:                         [crosstalk 00:22:59] argument.

Rick Brunson:                    Absolutely.

Grant Heston:                   I think it’s an incredibly slippery slope and I think fake news, demonstrably false news is one thing but I think the point is that we’ve made so far this morning that there’s a lot of things labeled fake news that people just don’t like. You know, you’ll see somebody on a Monday say, “That media outlet, that’s fake news! That story’s fake news.” On Friday there’s a different story comes out, says, “Hey! Look how great I’m doing. You read it in such and such.” So it’s really content driven, not the fact that it’s unreliable source.

Cindy Barth:                       Many times, I think you’ll also see actual fake news sites, you’ll never see a correction on anything that they do.That’s going to be missing. But you know, if you’re a legitimate news organization, if you make an error, and yes, we all make errors from time to time, you correct it and you correct it in a very visible way so that everybody understands what the error was, what was corrected. Sometimes with the fake news stuff, it’s just out there, just kind of free floats forever and people continue to share it, but you’ll never see anything mentioned about anything be corrected in it.

Paul Jarley:                         So you think traditional news media has become more opinion driven and perhaps more polarized because of fake news? It’s so crowded out there, to stand out. I assume you were all taught that you wanted to report the news, not be the news. But I might make the contention today, if you aren’t the news, or if you aren’t the trusted source of news that are giving somebody a take, your future is probably not very bright in the business. Is that fair to put that on fake news?

Rick Brunson:                    I don’t know about fake news. I think opinion started creeping into the news columns before Donald Trump came along. It’s been leeching into the news columns for years. I don’t think that’s a good thing. I think people see it and they smell it. Among good smart, reasonable people that I converse with who are highly skeptical of journalism and the news business, that’s always the first thing that they mention, that they see and smell too much opinion in articles that are supposed to be straight news. I don’t think that’s … I think that’s bad for us going forward. We’ve got to find a way to …

Rick Brunson:                    But to your point, Paul, people also seem to want news with an edge, news with a voice, news that-

Paul Jarley:                         Or with meaning right? I get all kinds of information.

Rick Brunson:                    News organizations get conflicted about this because we get mixed messages from consumers about what they really want.

Paul Jarley:                         And you do [crosstalk 00:25:46] signals in fairness.

Rick Brunson:                    Yes, right.

Grant Heston:                   I think it’s too about what people want versus what they need. You know? I think maybe one of the things that have hurt media companies over the years has been being able to track page views. You need to report on what’s happening at city hall that may or may not get a lot of page views. It’s pretty easy to report on things that will attract page views. We all know what those types of stories are. Those are easier to do, they require less work, they require a less sophisticated, maybe an entry level person can do that as opposed to somebody that’s been there 25 years.

Grant Heston:                   I think that’s driven a lot of what we’ve seen as well. I guess, maybe I’d ask a question, if I could Paul-

Paul Jarley:                         Yeah, of course.

Grant Heston:                   -To Cindy and Rick. Do you think news organizations are passive sort of bystanders to this happening or are things happening that they’re contributing to this epidemic?

Cindy Barth:                       I think the whole introduction of being able to see in real time what’s actually happening with this story is really frightening sometimes because, I’ll be honest with you, there are certain things that we know, all we have to do is put these key words in a headline and we’re going to have what we call a “Clickalicious” day because everybody in town is going to be going, bang, bang, bang, bang, bang on that story. We know that.

Cindy Barth:                       So with that becomes the responsibility of, is this actually news that you should report or are you just trying to get clicks? It’s something that we measure every day, honestly. There are certain stories, as you say, you should report and you must report, because they’re important. People need to know that. Will they get the page views? The clicks? No, probably not but you still need to report it because people expect you to report it. So it is kind of a conundrum. If you’re not careful you can error one side or the other pretty quickly.

Rick Brunson:                    Yeah, a big part of this, and we’re in the college of business, a big part of this is that the business of news has been radically disrupted by digital. Radically disrupted. What you used to be able to count on in terms of revenue from subscriptions, it is gone. The advertising market has been chopped up. Lilly Tomlin used to say, “It’s not called ‘show art,’ it’s called ‘show business’.” Right?

Rick Brunson:                    It’s the same thing with the news. News companies are there to make money. And because the business model has been seriously disrupted, news companies are having to scramble to chase more eye balls on their content because that’s where the advertising dollars these days in digital come from. There is the temptation to spend more of your resources on things that maybe aren’t that important or substantive, but will generate traffic and it’s not good.

Rick Brunson:                    People having to make the decision of, yeah, we need to give the broccoli, but maybe we need a little cheese on the bro colli to make it more appetizing.

Paul Jarley:                         Honestly Rick, when you were mentioning the polling data before about how many people support the free press, I hesitated on the word “free” and maybe what they were telling us there. Why should I pay for news when I can get it for free? And how that’s kind of impacting kind of what’s going on.

Cindy Barth:                       It does because you know, when you put some kind of a paywall block on a story, I will always invariably at some point during the day, if it’s a really popular topic that you know people want to read, will invariably get emails of people complaining, “Well, I can’t access this? Why can’t I access this?” It’s like, “Because you’re not a subscriber.” “Well, I don’t want to subscribe, I just want to see this story. Can you just let me see it for free?” “No.”

Paul Jarley:                         But that’s a less clickalicious day.

Cindy Barth:                       Yeah.

Grant Heston:                   I’ve got to tell a story about clickalicious from a UCF perspective.

Paul Jarley:                         That’s totally getting into the cheese [crosstalk 00:29:52].

Grant Heston:                   Right. We-

Paul Jarley:                         You’re in the lead, Rick.

Grant Heston:                   At UCF are always amazed how often UCT appears in headlines, where the connection is very tenuous at best.

Paul Jarley:                         Somewhere in Europe, right?

Grant Heston:                   Right, like a former UCF student, it was semester eight years ago that a former UCF student, but our favorite was we’re waiting for the headlines of Rollin’s college student arrested on Rollin’s college campus near UCF.

Grant Heston:                   I think it goes because we know that you have 280 thousand alum who live around central Florida so you’re going to have people who click on that kind of thing.

Paul Jarley:                         So that gets us to the question, so what do students need to know about fake news? That’s the business I’m in, right? How do we help prepare them for that? Or discern that.

Rick Brunson:                    Go ahead, please Cindy.

Cindy Barth:                       I think it goes back to the same thing of really what we all need to be conscious of, and that’s not just taking things at face value, first look. It’s really incumbent on all of us to do a little bit more research, be a little more thorough in what we think that we’re reading and make sure that it’s actually real, because I’m not sure that we’re ever going to get rid of fake news at this point. It’s just such an easy thing to throw around. But I think that we have to begin training people and kind instilling in them the understanding that it’s really important that you know that what you’re reading is actually factual. You don’t want to be helping spread something that’s not proved. You don’t want to be just relying on something that’s not true.

Paul Jarley:                         Rick, what do you think?

Rick Brunson:                    This whole thing, well, the business that we’re in at UCF is critical thinking no matter what our discipline is. It’s turning out citizens who are good critical thinkers. This whole enterprise of America is built on the idea and a crucial nature of informed citizens. Madison, Jefferson, all those guys, their biggest fear was a dummy with the vote. It really was. They put education in place, they put the first amendment in place. You have to have informed citizens. You have to have facts before you can have meaningful debate.

Rick Brunson:                    Who gathers those facts? Primarily journalists, but all of us, as citizens, as consumers, owe it to ourselves, and this is going to sound corny and cheesy, but we owe it to our country, we owe it to our communities to inform ourselves with good solid information and intel that’s actionable. We’re coming up on midterm elections and we’re going to be voting about a whole host of things including amendments, we’re constantly dealing with the constitution in Florida. You have to have good, solid information upon which to exercise your voice as a citizen.

Rick Brunson:                    It’s important that you be able to think critically, that you be able to weigh different sources of information, look at their sourcing, look at how recent they are, how primary are the source documents or the expertise of the people being interviewed? Do they know what they’re talking about? What’s the intellectual basis of what this news article or story on television that you’re reading, what is it based on and is that solidly sourced information?

Rick Brunson:                    It comes down to being critical, can vigorously skeptical about what you’re reading without becoming Cynical and not reading anything. I’m worried about the person whose just thrown their hands up and given up and been like, “I’m not going to read anything and just look at cat names all day.” That person scares me more than anything.

Paul Jarley:                         Grant?

Grant Heston:                   I think specifically the business students, I think of the interdisciplinary work, like the college of medicine does with the Rosen College of Hospitality Management, or the college of business does with engineering. Wouldn’t it be interesting to see if the Nicholson School and the college of business could work on, how do you monetize real news? How do you overhaul a business model that really isn’t working?

Grant Heston:                   I remember, I came to the Sentinel in 2000. We just gave everything away for free. That’s hard to pull that back. You’re used to getting something for free, it’s going to be hard to get people to pay for it. It’d be interesting to see, is there a different type of model that’s fit for the 21st century that brings value to the news gathering and the expertise that journalists have, but also elevates it clearly above all the rest of the noise and the nonsense that’s out there.

Paul Jarley:                         It’s my podcast, so I get to go last. Distorting or inventing the truth is not new. It’s been around well before the printing press. It has been part of the arsenal of totalitarian regimes for a long time. What is new is that today anyone can be a reporter who creates and disseminates real as well as fake news far and wide. Even more dangerous is the marriage of fake news with data analytics. Not everyone has access to such metrics, but those who do can target their falsehoods to people who are most receptive to their message and most likely to disseminate it widely through their networks.

Paul Jarley:                         It’s impossible for any of us to check every fact, we all come to rely on certain sources that have earned our trust. Perhaps the best weapon we have against fake news is to question any story or source of data that just confirms what we think we already know.

Paul Jarley:                         It is increasingly likely that you are targeting to receive that information by an algorithm that understands your biases well better than you do. Fake news will continue to be a thing so long as it’s effective and motivates people to do what the fake news reporter wants you to do. In a democracy founded on a free press, it’s not going away any time soon. Reader or viewer, beware. What’s your take?

Paul Jarley:                         Check us out online and share your thoughts at business.ucf.edu/podcast

Paul Jarley:                         You can also find extended interviews with our guests and notes from the show. Special thanks to my producer Josh Miranda and whole team at the Office of Outreach and Engagement here at the UCF college of business. And thank you for listening!

Paul Jarley:                         Until next time, charge on.

The post Is Fake News Really a Thing? appeared first on Barry S. Miller College of Business.

Paul Jarley:                       Green Acres was a popular TV show when I was a kid. Simple plot line. Wall Street attorney forces socialite wife to give up New York and move to the farm. Cultures class, chaos ensues, but now it seems the tables have turned. Chickens are leaving farms in favor of urban backyards. Some inner city chickens even have Facebook pages. What’s going on here? Are backyard chickens a thing? If so, why, and more importantly how can we stop them? 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:                       My wife and I lead complicated lives. Careers and homes in two different states, five children spread across four time zones, our club’s soccer schedule that takes Suzanne and sometimes meets towns far and wide, my work related travel, and our love of experiencing new places. Honestly, there are days I’m not sure where I am when I first wake up. One morning a few years ago, I was home in Lexington when I heard this. Suzanne was raised on a farm, but I was pretty sure we weren’t at her parents’ place. When she woke, I asked her about hearing that rooster crowing. She smiled and told me that the neighbors have installed a chicken coop, and that we were getting farm fresh eggs as part of the deal. “Much healthier and better tasting than store bought eggs,” she stated with authority. Everybody knows eggs come in two rows in nice little cartons that sell for a few bucks at the grocery store. If you want to go crazy, you can buy the free range chicken variety, pay a dollar more, feel morally superior, and cook an extra one because they’re puny.

Paul Jarley:                       No one in their right mind believes it makes any economic sense to raise chickens at home. Besides, they’re dirty, smelly creatures. There’s a reason most of us stay away from the harsh realities of the food chain. I cracked a few eggs, scrambled them, and took a few bites. Different, not obviously better, I thought. Not a thing. Just a few hippies. This thing will be gone very soon. It turns out, I may have been wrong.

Kelly Dowling:                 Hi, chick chicks.

Paul Jarley:                       This whole chicken in the backyard thing has got some legs. The government has even released a series of studies on it. The best data on chicken migration to the cities comes from a 2013 study by the US Department of Agriculture. They looked at urban chicken issues in LA, Miami, Denver, and New York City. A few takeaways. More than half a percent of single family homes in these urban areas have backyard chickens. That’s a lot of chicken. Second, overall more than 40% of people in these cities were in favor of allowing chickens in their communities. That’s a lot of chicken support, and third, nearly 4% of households without chickens said they plan to have them in the next five years. Now, lots of people tell you they intend to do something and never follow through, but let’s take that last nugget as evidence that urban chickens are on the rise. The USDA did. To understand why people do this, I wanted to get into the mind of an urban chicken owner. Someone who is harboring those dirty birds.

Kelly Dowling:                 Really, I think of it as the pet that makes you breakfast.

Paul Jarley:                       That’s Kelly Dowling. Kelly has her MBA from UCF. She is wonderfully quirky, and she was my development officer. These days, she’s assistant dean for development at Stony Brook’s College of Engineering, and most importantly she is a novice urban chicken owner.

Kelly Dowling:                 I have not done the chicken math as yet, but I can tell you so far I’ve had these chicks and I bought these chicks at four days old. I’ve got the feed, the brooder, the chicken run, the chicken coop. I bought a chicken playground set for them to jump up around on. I have built a little chicken sanctuary, and so far I’m all in about $1,700 dollars.

Paul Jarley:                       Chicken playground. Since Kelly is a novice chicken owner, we’re going to use the resources of UCF to help her out. I’ll do the chicken math for Kelly. Kelly has six chickens. Egg production varies a bit by breed, but to keep the math simple, let’s say these chickens lay 500 eggs over their lifetime. Not a bad estimate. That means those six chickens will produce 3,000 eggs. She’s in $1,700 dollars. A little of that is variable cost, mainly chicken feed. So, let’s say that her fixed costs are $1,600 dollars. That means just the fixed cost of an egg for Kelly, 53 cents. That translates into $6.40 a dozen. Comparison, Publix $2.49. Whole Foods, $4.99. Now in fairness to Kelly, she may be able to spread her fixed costs over more than a couple of years. That’s about the average length chickens are regular egg producers, but if you consider that there still are more variable costs, it’s not an economic bargain. Don’t believe me, believe a real economist. Now, Mark Dickie is a professor in our economics department. As he explains, the industrial egg complex is built to minimize costs and Kelly’s six little chickens, well they just can’t really complete.

Mark Dickie:                    So, the industrial egg complex has many, many chickens. They’ve got everything automated. They’ve got everything down to the last cent measured, and they’re going to do it more efficiently. She probably has happier chickens than the industrial egg complex, but doubtful that she’s gonna get the eggs more cheaply.

Paul Jarley:                       In fairness to Kelly, she mainly wants to enjoy them as pets. It’s how you end up spending $1,600 dollars on a chicken mansion, but what I really want to know is, do they love you back?

Kelly Dowling:                 One of them seems to at least enjoy my company. The other five run screaming every time I come into the coop.

Paul Jarley:                       And then there’s the biggest question facing any pet owner. When you go on vacation, what do you do with your chickens? Do you send them to a chicken pound where they hang out with other chickens? What do you do?

Kelly Dowling:                 I have two extended feeders so my chickens can live in their coop and in their run for a week without any problem for food and water. I also have a battery powered door opener and closer, so every night that door to their coop closes automatically. Every morning, it opens automatically. So, I have them on automatic pilot. Everything is easy peasy for me.

Paul Jarley:                       Chickens seem a lot like cats. Disinterested in love, but low maintenance.

Kelly Dowling:                 So, I hope that I like to eat the eggs of my chickens. I hope that I like it. I’m not entirely sure because a tiny bit of me is a little grossed out by this, but I feed them really well.

Paul Jarley:                       I told you she’s wonderfully quirky. Let’s help Kelly out here.

Jonathan Hasford:          Anything that we invest time, and effort, and energy into we feel more attached to, we feel more bonded towards and so we like it better.

Paul Jarley:                       That’s Johnathan Hasford, assistant professor in our marketing department. Johnathan thinks Kelly is gonna like those eggs just fine.

Jonathan Hasford:          There’s literature and marketing research on co-production of value and stuff like that, and so-

Paul Jarley:                       Talk to me about that.

Jonathan Hasford:          Yeah, I mean companies from the time they start to innovate a new product, the benefits are immense. They can bring in consumers and have the consumer feel like they’re a co-producer in whatever this idea, service, object, thing is that’s being developed and so it could just be the fact of co-production in a sense of, “I feel like now I’m contributing more to the food that I produce.”

Paul Jarley:                       So, she’s going to love the eggs, but can she really raise the chickens?

Kelly Dowling:                 You know me. I was born in Detroit, so I didn’t come by this naturally.

Paul Jarley:                       No, you’re not really prepared for this.

Kelly Dowling:                 That’s absolutely correct. It took me a year to get it together. I took a backyard chicken class, I bought several books, I told everybody I know I was gonna get chicken. I sought a lot of advice from people, and then after about a year I felt comfortable in starting.

Paul Jarley:                       But Kelly seems to have prepared well for the challenges that lie ahead.

Ron Piccolo:                     And then only once that’s done does someone like Kelly have confidence in her ability to raise chickens.

Paul Jarley:                       That’s Ron Piccolo, chair of our management department and an expert in how people build confidence when facing new challenges. Ron has only one piece of advice for Kelly; maybe she should join an urban chicken support group.

Ron Piccolo:                     My reaction is if someone’s making an effort to raise chickens, which is a rather unique circumstance, they’re gonna look for validation of that effort from other people who are doing the same thing. People like to be different, but not all that different, and so she’ll want to do something distinctive and get support and validation from others who are doing similar things.

Paul Jarley:                       But not everyone has prepared like Kelly, and winging it can lead to a rarely talked about issue: chicken abandonment.

Kelly Dowling:                 This is an issue, and there are many Facebook pages for re-homing chickens and roosters.

Paul Jarley:                       It doesn’t always end well though, people. Cover the kids’ ears.

Kelly Dowling:                 [inaudible 00:09:18] are people that will let them just run out into the yard and a raccoon, or a hawk, or an osprey will pick up that chicken. Remember, chickens are on the bottom of the food chain not just for us as humans, but for the entire animal kingdom. So, if we don’t want them anymore all you really have to do is let them out in the yard and another animal-

Paul Jarley:                       Yeah, you get the idea. Roosters crowing, chicken abandonment, predators lurking behind the bush, kids wanting to play in the chicken coop. Makes you wonder, what do your neighbors think? Has anybody had any concerns about their property values falling or chickens that are getting in their backyard, or [crosstalk 00:10:02].

Kelly Dowling:                 Doubtful. I have to tell you, besides the predators my number one concern is what the neighbors think. I have not gone around my neighborhood and had the chicken talk.

Paul Jarley:                       So, we had the chicken talk for Kelly. We went to her former mayor Ken Bradley to ask him about the types of complaints people raise about urban chickens.

Ken Bradley:                    I’m not aware of any complaints. I’m aware of residents being concerned when we were looking at our ordinances, and I know the City of Orlando went first. Oviedo had done some things.

Paul Jarley:                       Oviedo is chicken heaven, by the way.

Ken Bradley:                    You know, Winter Park, this is one area where Winter Park didn’t necessarily want to be at the forefront of. We wanted to see what other municipalities and others would do, and for the most part I’m not aware of any complaint.

Paul Jarley:                       Winter Park has been a little chicken about legalizing chickens, but rogue chicken operations don’t seem to be a problem either, and Kelly has good reasons for wanting those birds. Do you distrust the food supply?

Kelly Dowling:                 Absolutely.

Paul Jarley:                       Give me your top three hesitations.

Kelly Dowling:                 Chemical additives and preservatives, the freshness, and ultimately the experience of the animals in the food supply.

Paul Jarley:                       Johnathan backs Kelly up here.

Jonathan Hasford:          The grocery store does …eggs sometimes will take thirty days from the time the egg is hatched [crosstalk 00:11:26].

Paul Jarley:                       And I know from my days at an unnamed, large Midwestern university that when you walked past the poultry research building, it sounded like this, but I think the real reason that a lot of people raise urban chickens is this.

Kelly Dowling:                 So I feel in control of what they’re eating, and so I feel in control of what I’m eating.

Paul Jarley:                       I blame FUD marketing for people’s insecurity around the food supply. Listen to Johnathan Hasford talk about fear, uncertainty, and doubt in food marketing.

Jonathan Hasford:          In food, I think that when it comes to health one of the biggest motivators that people can use is fear and anxiety we’ve seen in over the years when it comes with what you eat might be causing cancer or something, and so I think it’s an easy thing to play on people’s fears and then offer them a route to fixing that. It’s a great way to motivate people’s behavior if you can pull it off effectively.

Paul Jarley:                       One last insight into the mind of Kelly Dowling. I don’t know what to do about this. Are you gonna have your own Facebook page for your chickens? Have you considered that?

Kelly Dowling:                 Not only have I considered it, I don’t know if you’ve ever watched chickens, it’s really [crosstalk 00:12:39].

Paul Jarley:                       No, don’t got the time.

Kelly Dowling:                 It’s calming, and it’s relaxing. There’s something about watching chickens peck, and scratch, and peep that is just harmonious, and so I thought I’m gonna put some chicken cams up and people can sign into my chicken cams and watch my chickens.

Paul Jarley:                       Can Kelly’s chickens be social media stars? We asked Doctor Carolyn Massiah of our marketing department to take a look at Kelly’s chickens and give us her assessment.

Carolyn Massiah:            This would actually be Facebook worthy.

Paul Jarley:                       Carolyn takes this conversation in a bit of an unexpected direction.

Carolyn Massiah:            This would probably end up being a mid-workday break for individuals to escape from the office you’re in to nature, and be able to watch it. I’ll tell you, it’s a form of meditation that people aren’t having to put the effort into calm themselves for meditation, to talk themselves through, to isolate themselves in a quiet area.

Paul Jarley:                       Believe it or not, Carolyn goes on to suggest a multi-platform approach.

Carolyn Massiah:            Actually, what would probably be really neat is they had their own Twitter so that then … yeah, that would really build that all together. You’d have the complete brand then. The Facebook, the Twitter feed, and Snapchat. Share the names and have them form relationships. Next thing you know, people are buying t-shits.

Paul Jarley:                       You can tell why Carolyn is in marketing. She goes on to talk about the lessons for students in urban chickens.

Carolyn Massiah:            First of all, they can learn that no matter the technology that they know, particularly here in the United States we see a shift to simplicity, particularly at home and in extracurricular activities, and so that might actually be the new frontier of products, is actually in simplicity not technology. The other thing that we can learn or our marketing students can learn as they go forward is, literally anything can become a product. So, even simplicity.

Paul Jarley:                       Yeah. I’ve lost control of this whole podcast, and probably the argument around urban chickens, but for the record, are urban chickens a thing? From Kelly Dowling.

Kelly Dowling:                 As more and more people become concerned over what they’re eating, the backyard chicken movement will continue to grow because of the control issue.

Paul Jarley:                       It gets worse. From Johnathan Hasford.

Jonathan Hasford:          Oh, sure. Whether it’s because it’s just a hobby and things that you like to do, or whether you’re trying to retain a part of yourself if you used to live in the country and now you’ve had to move into the city for work-

Paul Jarley:                       She’s from Detroit, Johnathan.

Jonathan Hasford:          Or just as it becomes more efficient, people might use it to save money.

Paul Jarley:                       They’re not saving money.

Jonathan Hasford:          As this grows, companies devoting R&D and technological development to help people do this in their own backyard more efficiently and cost effectively.

Paul Jarley:                       I’m thinking of firing him. Finally, a voice of reason… from Ron Piccolo.

Ron Piccolo:                     I say it’s a passing fancy. I suppose people finding ways to be different and looking for healthier ways to eat that’s against these prevailing culture, that’s not gonna go away, but raising chickens is just one example of that.

Paul Jarley:                       There’s a reason why he’s a department chair, people. From Mark Dickie.

Mark Dickie:                    I’m glad they’re not a thing next to my backyard.

Paul Jarley:                       From College of Business Hall of Fame member, Mayor Ken Bradley.

Ken Bradley:                    I don’t think it’s gonna go away. I have a cousin that has backyard chickens in Seminole County, and they love it. It’s a great addition to their family.

Paul Jarley:                       From Carolyn Massiah.

Carolyn Massiah:            I think they’re gonna say the more we saturate ourselves with technology everywhere else, the simplicity we look for, and its immediate access to simplicity either through a social media like Facebook or Twitter, or stepping out into your backyard and experiencing it. It looks like an idea ready to hatch.

Paul Jarley:        It’s my podcast, so I get to go last. Simplicity and control are powerful motivators. Oliver Douglas moved his wife from New York City to Hooterville in search of that simplicity and clean living. Trouble was, he was a terrible farmer and his life was anything but simple. In fact, it was chaos. I’m afraid there are many more Oliver Douglases in the world than there are Kelly Dowlings. The urban chicken movement might be comprised of more than just a few hippies, but I don’t think store bought eggs are going away any time soon. What’s your take? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show. Special thanks to my producer, Josh Miranda, and the whole team at the Office of Outreach & Engagement here at the UCF College of Business, and thank you for listening. Until next time, charge on.

The post Are Backyard Chickens Really a Thing? appeared first on Barry S. Miller College of Business.

Voice:                                “If you build it, he will come.”

Terence Mann:                “He will come, Ray. He will most definitely come.”

Paul Jarley:                       That’s my favorite line from Field of Dreams. But, what if you can’t build it?

Jesse Wolfe:                     It came out to a $700,000, almost a million dollar, order. And they needed them to be about $10 a cart and I could not figure out how to get them below $25 a cart.

Paul Jarley:                       Or, what if they don’t come?

Cameron Ford:                The Google Glass, people started using it out in public and stuff like that, and quickly were scorned as being what were described as Glass-holes. My understanding is they pulled from the market.

Paul Jarley:                       Lean start up offers a different approach, but is it really a thing? Or, is it just academics hyping the scientific method?

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:                       This is how significant businesses started back in the day.

Michael Pape:                 What we were, I’ll just say, required to do as an entrepreneur with VCs with trying to get, maybe, economic development funds.

Paul Jarley:                       Yup.

Michael Pape:                 And this was in the biotech space.

Paul Jarley:                       That’s Dr. Michael Pape, Professor of Practice here in the College of Business, and Director of our UpStarts program.

Michael Pape:                 So it was a tech-oriented business that I’ve been involved in, was write the business plan, and I have sat down, myself and with my teams, of writing the 40 to 60 page business plan. The fat startup, if I may define it that way, had you do that. Venture capitalists would request it, and they would want to make sure that you saw the plan from beginning to end.

Paul Jarley:                       Then a funny thing happened starting in the early 1990s. Universities started to develop entrepreneurship programs. They did this partly to serve their economic development missions, partly because donors loved to give money to this cause and partly because more and more students became interested in entrepreneurship as a career path.

Paul Jarley:                       In the early 1990s, ideals spun out of Stanford, with an emphasis on design thinking. Another decade passed and Berkeley started developing what has come to be known as lean start up. It had a coming out party in 2011, with the publication of Eric Riles book by the same name. But, are universities and business schools really the place to launch business startups?

Paul Jarley:                       I had my doubts. We excel at getting rule followers great jobs in companies who are looking for functional talent. We really aren’t geared up to help people who want to color outside the lines, pursue their crazy dreams, even when people say they’re wrong. That said, a quarter of my students say they want to start a business, and students seem to love the lean startup methodology. Cameron Ford, Director of our Center for Entrepreneurial Leadership, has a pretty obvious reason why.

Cameron Ford:                Our students love the lean approach because, of course, they don’t have any resources. So-

Paul Jarley:                       Simply put, they’re broke. But what exactly is lean startup, and what are its challenges?

Jesse Wolfe:                     That’s how I started my business.

Paul Jarley:                       We’re going to take you on a journey with this guy.

Jesse Wolfe:                     Lean startup, bootstrapping 101. That’s where great businesses, in my opinion, come from because people that start off with too much funding usually have an issue staying on course. When your back’s against the wall is when I feel you think the fastest, the brightest, the quickest and you become the most resourceful. When you have too much money you tend to get lackadaisical in my opinion.

Paul Jarley:                       That, my friends, is Jesse Wolfe, CEO and founder of O’Dang Hummus, and quite frankly a soundbite machine.

Jesse Wolfe:                     We run a very successful, thriving business and people are like, “Oh where’s the Lamborghini?”. I’m like, “Someone else’s hands because I’m dumping all my money back into the business”.

Paul Jarley:                       Now let’s follow Jesse’s startup story. A startup isn’t the same as a company. Back to Cameron Ford.

Cameron Ford:                It’s not a miniature version of a company, it’s actually a vehicle, for remaining humble, viewing all of your ideas as hypotheses and going out and collecting data to validate or invalidate these things and move forward-

Paul Jarley:                       It’s a product development process more than a-

Cameron Ford:                I would say it’s more of an uncertainty reduction process. Because it’s not just about the product, it’s also about relationships. So it’s kinda three elements to building a company. You gotta have conceptual kinda stuff put together, you’ve gotta have social stuff put together, people right and you actually have to invest material resources.

Paul Jarley:                       Interestingly, Jesse got started in exactly the way Mike Pape described except he didn’t have investors.

Jesse Wolfe:                     I had a business planning writing class with professor Michael O’Donnell. He told us we had to come up with a business plan idea and I didn’t want to be a part of a team that wrote for another bar concept. So, I had this idea after I had my wisdom teeth pulled out for a Ben and Jerry’s style Hummus company. And when I started writing the business plan for it, I realized there was this massive gap in that market. It was almost billion dollar category and there was one big contender really monopolizing it. And it was really primed for competition to come in.

Paul Jarley:                       Jesse had a plan but no product. So he got busy with the help of his grandmother.

Jesse Wolfe:                     I actually started O’Dang Hummus with about a hundred and fifty bucks. My grandmother gave me a food processor, so that was the freebie. And the rest of it was honestly just ingredients and some labels from like a little local printer that hooked me up.

Paul Jarley:                       Jesse had created what we call a minimum viable product or MVP. Cameron Ford says, it’s really important to have a prototype.

Cameron Ford:                Because you give them something tangible, I always like to tell people a picture’s worth a thousand words. A prototype is worth a thousand pictures. You get something that people can literally see and put their hands on that’s very tactile. That often will enhance the conversation and imagining process for a lot.

Paul Jarley:                       You could do more than just touch Jesse’s prototype. You could taste it. And it was yummy.

Jesse Wolfe:                     And that was the basis you know, it got me in front of people getting a taste testing and samples. And then when it came time to really launch the product and start selling it, I entered the UCF Business competition called ‘The Joust’.

Paul Jarley:                       Rather than seek out a network of advisors that could help Jess grow his business, he went straight for the financial kill. In retrospect Jesse realizes this may have been the biggest he made.

Jesse Wolfe:                     Not getting more people around me quicker in that space was a bit of a hindrance.

Donna Mackenzie:         I think starting a new business is sort of like waiting into the ocean with waves crashing around you and birds pulling you this way and that.

Paul Jarley:                       Donna Mackenzie is executive director of Starter Studio. She thinks Jesse waited way too long.

Paul Jarley:                       How early does that need to start? That mentorship and guidance.

Donna Mackenzie:         Day one.

Paul Jarley:                       Jesse didn’t win ‘The Joust’ and the big money that came with it. In fact, he finished third.

Jesse Wolfe:                     I took third place in that. And I’m proud of that.

Paul Jarley:                       That’s always the path to success in ‘The Joust’. Always finishing third!

Jesse Wolfe:                     Third place is the winning spot. It’s not first, it’s not second, it’s third.

Paul Jarley:                       The money is in third.

Jesse Wolfe:                     The money’s in the third. Yup.

Paul Jarley:                       You lost to women who wanted to pee in a cup.

Jesse Wolfe:                     Yeah, that’s [crosstalk 00:06:57] I lost to a female urination cup so that’s one of my greatest prides thus far at UCF. But yeah, I took that prize money it was about four thousand dollars. And again, I launched now our multi-million dollar business with $4,150.

Paul Jarley:                       But in fairness of that day, because I remember that day really well.

Jesse Wolfe:                     So do I.

Paul Jarley:                       I can imagine you do. I don’t think anybody there believed you didn’t have a killer product. I think they thought you couldn’t make any money at it.

Jesse Wolfe:                     Yeah, agreed.

Paul Jarley:                       Understand that Jesse isn’t the kind of guy who takes no for an answer. He decided to double down instead. Next stop, the real shark tank.

Jesse Wolfe:                     Hello Sharks! My name is Jesse Wolfe. I’m a UCF student from Orlando, Florida and my company is O’Dang Hummus. Today we’re seeking $50,000 for 10% equity stake in my hummus empire.

Paul Jarley:                       Jesse got his offer from the sharks but they took way too long with their due diligence. In the meantime, Publix came knocking. What’s surprising here, is they didn’t want Jesse’s traditional hummus, they wanted his hummus based salad dressing. So he signed a deal, found a packager and had to scale up production without sacrificing quality.

Jesse Wolfe:                     We’re doing truckloads of chickpeas at a time right now but it’s the same exact quality and consistency. As a matter of fact, we’re still using-

Paul Jarley:                       As what came out of your blender right? That’s the tough part right?

Jesse Wolfe:                     Same blender. The toughest thing I’ve had to bridge.

Paul Jarley:                       Problem was, Publix didn’t know what to do with it.

Paul Jarley:                       They didn’t know where to put that product.

Jesse Wolfe:                     Exactly. Exactly.

Paul Jarley:                       So where I would always find it is near the deli, kind of by where the rest of the hummus was but not really.

Jesse Wolfe:                     Not really it was by like, the gourmet mustards and stuff. I’m like alright this is random.

Paul Jarley:                       And I knew right away, I thought “Oh that’s a problem.”

Jesse Wolfe:                     Yeah it was a huge problem. And we called it a sauce. We let people convince us to call it a sauce. It was so jacked up. Yeah, and again but it was such a good learning lesson because we re pivoted to what, I mean it’s always been a dressing. So we relabeled it a dressing, we fixed the formulation, we listened to our fans and we delivered a product that’s bar none phenomenal.

Paul Jarley:                       Since that time, Jesse has had more than his fair share of struggles.

Jesse Wolfe:                     Never giving up. There’s so many times that I look back and thought we were dead and I stepped one more step.

Paul Jarley:                       He’s fixed his mentoring deficiencies.

Jesse Wolfe:                     But where I’m at today, I have very strategic, very specific mentors that are in the food space, that know packaging, that know consumer product goods. These are people that are really helping me thrive in my space. Not all mentors are created equal.

Paul Jarley:                       And he doesn’t panic the way that he used to.

Jesse Wolfe:                     Don’t burn everything down around me, you know trying to freak out. I just step back and I go “Here it is.” Right, we have another problem. Instead of panicking and pointing fingers at whose fault it is, what’s the solution.

Paul Jarley:                       And he is definitely a man who knows his value proposition. Listen to his pitch to Costco.

Jesse Wolfe:                     So, you know what I did is I walked in and I put a plate of salad down. A really beautiful salad. And I said, “Here’s one salad.” and I put a second plate down, I said “Here’s another salad.” And I took a bottle of canola oil that you cook with and I poured it all over top of this lettuce and I took a bottle of water and I poured it all over top of this lettuce. And then I took about a cup and a half of sugar and I poured it on top that salad. And then I took mine and I put chickpeas, beautiful fresh cooked chickpeas, I put fresh squeezed lemon juice on it, put it on the side and I put beautiful extra-virgin olive oil. And I put a fork right between the two plates. And I said, “Now, I want to ask you which salad would you like to eat?”

Jesse Wolfe:                     Our food system in America is broken. We’re the only salad dressing in the United States to gain national distribution being 100% plant based. Priced completely competitive to the big guys. We’re not a $10 salad dressing. We’re in Wal-Mart at $3.79.

Paul Jarley:                       No doubt about it, Jesse is a wonderful UCF success story. But is he typical? Does lean start up work everywhere? Or do other kinds of companies face other kinds of challenges?

Carol Ann Dykes Logue: There are companies that failing fast is better for them, I say sometimes it is.

Paul Jarley:                       Carol Ann Dykes Logue is site manager for the UCF incubator program. She stresses the difficulty a lot of the high tech companies have in implementing the lean start up approach.

Carol Ann Dykes Logue: It’s very difficult to apply the lean start up methodology many times. I’m working with very leading edge technology and innovation companies where the first question really is, “Can we make the technology work?”

Paul Jarley:                       That takes money, sometimes lots of it. Then there’s the challenge of getting technologically oriented minds to focus on the value added to the customer. Here’s a recent conversation with one of her clients.

Carol Ann Dykes Logue: And I kept asking him, “Tell me what you think. What’s the benefit of this technology that you are in the process of developing?” Throw something at me that was really a technical capability, I would come back to “Why should I care about that? How’s it gonna help me?” Tell me how it’s gonna help me.

Carol Ann Dykes Logue: A lot of times I use analogies and turn the tables on them and ask them “Alright, share with me a recent buying experience that you’ve had. Tell me what went through your head.” And they can pretty clearly tell you that and then they go, “Ohhhh, I see now.” Yeah I didn’t really care how it does what it does necessarily, I care that it does what I need done.

Paul Jarley:                       For students, finding the right people to talk to can be challenging when they wanna validate their ideas. Back to Cameron Ford.

Cameron Ford:                Well I think in the early part of the process we’re working on with most students. I think for them it’s very intimidating to think about going out and talking to a bunch of people about their idea. They just don’t know that many people that can connect them to the kinda folks that it would be relevant to speak to. It’s one thing if they’re talking about “Hey I’d like to open up a food truck that’ll pull up here on campus and serve sandwiches to students.” Well then you can go around campus and talk to students right, that’s who you’re trying to sell it to. But if you’re trying to do something that might help the elderly or something like that, you need to go out and talk to 50 or 60 people. Where are you gonna find those folks? How are you gonna conduct those interviews? That part of the process can be pretty daunting if you’re a student trying to go and really do the lean start up process really the way it’s supposed to be done.

Paul Jarley:                       Even when you find the right people to talk to, Donna Mackenzie says that the discovery process can lead to conflicting information. And it can be hard to sort out without experienced mentors.

Donna Mackenzie:         Oh that’s the tricky part. You know, you get so much feedback and it’s sometimes hard to discern whether this is the right direction or that’s the right direction. Just giving them the tools but not giving them the guidance and the mentorship to kind of sort through all of that. I think that’s really where you get that analysis by paralysis and it’s hard to get unstuck from there.

Paul Jarley:                       And if you skip this step, things can get ugly.

Cameron Ford:                Don’t start organizing your resources and your people before you get your story straight. Because if you do that, you’re going to cause a lot of harm. A lot of things aren’t gonna work out, you’re gonna burn a lot of bridges.

Paul Jarley:                       People lose confidence in you.

Cameron Ford:                Right.

Paul Jarley:                       And according to Mike Pape, there’s a lot more to creating a company than the lean start up process contemplates.

Michael Pape:                 An investor’s going to ask you, you want $400,000 what are you gonna spend that on? Well, you have to justify the use of funds and-

Paul Jarley:                       Ping pong tables probably aren’t it.

Michael Pape:                 Yeah, aren’t gonna be it right. Exactly. And a big salary is not going to go [crosstalk 00:14:42] Yeah there’s something to that.

Paul Jarley:                       So, you need to have a strong, long term financial plan.

Michael Pape:                 So with financial modeling the first thing you need to do is you have to establish what are and what I call and try to convey, value generating milestones. Not just milestones but value generating. To accomplish each of those milestones and they’d be value generating because they can create an influction let’s say. The value for the company, they can move the needle per say.

Paul Jarley:                       The hockey stick.

Michael Pape:                 The hockey stick. But then there’s a cost associated with hitting each of those milestones. And the investor wants to know how much it will cost to hit that milestone which is the basis for your budget.

Paul Jarley:                       Right.

Michael Pape:                 Which you then transfer to a spreadsheet which is your pro form a budget which is your financial model. And if that cash balance gets below zero and is red, I ask do you have a company?

Paul Jarley:                       No.

Paul Jarley:                       It’s time to call the question. “Is lean start up really a thing?” from Donna Mackenzie.

Donna Mackenzie:         Yes. It’s really a thing and I think it’s really a thing because it gives you a framework from which to build out of uncertainty because building a business is full of uncertainty.

Paul Jarley:                       From Michael Pape.

Michael Pape:                 I think lean start up is a thing where you can be nimble and adjust to the pace of change.

Paul Jarley:                       From Cameron Ford.

Cameron Ford:                Yes, it’s a thing. It’s made people understand how to evolve their ideas into fitness.

Paul Jarley:                       From Carol Ann Dykes Logue.

Carol Ann Dykes Logue: Sometimes it is. There are companies that failing fast is better for them.

Paul Jarley:                       From that hummus king, Jesse Wolfe.

Jesse Wolfe:                     100% yes I do.

Paul Jarley:                       It’s my podcast, so I get to go last. Reducing uncertainty by employing hypothesis testing in the scientific method is hugely appealing to academics. It’s how we think. But any good, thoughtful researcher knows the limits of such work. Especially when you’re trying to understand how people behave. It’s why having experienced mentors is so important in start ups. It can augment science with experience and increase the likelihood of success. If I were looking for a school to help me start a business, I would want to know much more about their network of experienced mentors then their grasp of frameworks like lean start up.

Paul Jarley:                       Management research can be kind of trendy. And something will eventually replace lean start up as the darling theory of the day. But building a strong network of advisors that can help navigate you through uncertainty is never going to go out of style. What do you think? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extensive interviews with our guests and notes from the show.

Paul Jarley:        Special thanks to my producer, Josh Miranda. And the whole team at the office of Outreach and Engagement here at UCF College of Business. And thank you for listening. Until next time, charge on.

The post Is Lean Startup Really a Thing? appeared first on Barry S. Miller College of Business.

Paul Jarley:                         Today’s biggest viral sensation isn’t a cat playing a piano or the Annoying Orange. It’s an 18 year UCF college student staring at a camera. Seriously, can this really be a thing? 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:                         So how can a college freshman staring blankly into space get more likes on social media than the UCF national championship football team? Erik Kohler is the stadium voice of UCF football.

Erik Kohler:                        Well, what’s funny is, I’m up there in the production box of the sights and sounds of the stadium, and we go through the camera shots like we’re doing like a fan of the game or marketing promotions and such. And we came across the crazy students section and everyone was going crazy and all of a sudden, the camera caught Anthony Allan, that just had this dead stare face. I think his nickname is Frozen Face. And the camera caught it and I could hear our camera guy says, hey, go back to that kid. And sure enough everybody started looking at video board, everybody just became enamored that he didn’t blink, it was just kind of like a blank face, or a frozen face, I should say, and then it took off like wildfire.

Paul Jarley:                         This didn’t stop at the first game. It continued last week.

Erik Kohler:                        We had it, where there was cutouts of his face, right. The fans were moving it and then the TV camera perfectly zoomed through all those faces that were fake, or the fat heads and there was real Anthony right in the middle, and that was hilarious.

Paul Jarley:                         Marissa, one of our UCF College of Business ambassadors was in the stands at the time.

Marissa:                               I think I definitely thought creepy at first. But because everybody started laughing, then it became more funny. His social media went a little bit viral, he got a ton of followers from that. So …

Paul Jarley:                         I was at the game last week, it was awesome, to understand what happened, I went to Nick Riggle. How are you doing my friend?

Nick Riggle:                        I’m great. I’m great.

Paul Jarley:                         Nick holds a PhD in philosophy from NYU. He was our guest speaker at Welcome to the Majors a couple of years ago, and he’s written a book called, On Being Awesome: A Unified Theory of How Not to Suck. Nick and I sat down to talk about social openings.

Nick Riggle:                        A social opening is an opportunity, it’s a kind of …. It happens when an individual expresses him or herself in a way that gets other people to express themselves, often by like breaking the norms or breaking out of your social roles or doing what’s unexpected or surprising.

Paul Jarley:                         Is our staring man, is that a social opening?

Nick Riggle:                        And so I think the staring guy actually does this, and I think it’s brilliant. But what’s special about this one is that it seems to me to be a social opening between the audience member and the cameraman, and maybe the producers as well. But it’s one that is so weird and fun that it resonates throughout the rest of the crowd. And so they’re kind of engaging at one remove.

Paul Jarley:                         A philosopher can explain to me the ethics of awesomeness. But to understand why this went viral, well now I need my marketing faculty.

Yael Zemack-Rugar:        A big piece of when things go viral in an internet world is about connecting.

Paul Jarley:                         Yael Zemack-Rugar is an assistant professor in our Marketing Department. She goes on to note that sporting events are particularly prone to situations that lead to viral social media.

Yael Zemack-Rugar:        Where does that happen more than sports? People define their entire being based on the sports teams that they love and hate. So if we’re gonna connect, if we’re gonna get this, this is us feel, it’s gonna be at a sporting event.

Carolyn Massiah:             There’s a community of college students who want to feel like they are unique and one.

Paul Jarley:                         That’s Carolyn Massiah from our UCF Marketing Department. She goes on to stress authenticity and the fact that people want to stand out from the crowd.

Carolyn Massiah:             I think if it resonates with the target market, if it resonates with a certain segment, if it’s like that could be me too, I think it’ll go viral. He gets to be unique in a crowd, just by being himself.

Paul Jarley:                         But how long can this continue? Nick Riggle has one take. One of the questions, I had was how long can a social opening last? Do you have any sense of that?

Nick Riggle:                        So I think it’ll last in that context, as long as people are still enthusiastic about it, as long as it’s still reverberating throughout the crowd like that, and the producer and the audience and Anthony are having fun doing it. One thing I was thinking was it might be kind of like the high five, where the high five started out as part of the community building function of a baseball team, of the LA Dodgers in the 70s. And it might be kind of fun to see the stare happen outside of the stadium.

Paul Jarley:                         It is by the way. Anthony’s taken his show on the road. He’s visited his trigonometry class. But seriously people, if this is a thing, somebody’s got to make money at it. We’re a business school after all. Back to Yael.

Yael Zemack-Rugar:        You can do ads, you can merchandise or you can sponsor; this doesn’t seem to apply here.

Paul Jarley:                         Well he has the big heads of himself, out there staring.

Yael Zemack-Rugar:        Yeah, well maybe there’s hope.

Paul Jarley:                         I don’t know if he’s selling those or not, yeah.

Yael Zemack-Rugar:        And then, the other dimension is if he accrues enough followers on his social media to become an opinion leader, then people will start paying him for that.

Paul Jarley:                         So he got more likes on his Instagram than the UCF National Championship team did.

Yael Zemack-Rugar:        Okay so if he can leverage that to actual influence, that is ongoing …

Paul Jarley:                         Then he could be a thing.

Yael Zemack-Rugar:        Have there been other 18 years old with no discernible skill that have been able to do this. The answer is yes.

Paul Jarley:                         Our friends at Rock ‘Em Apparel have an angle on this. They’ve made five special pairs of socks with Anthony’s face on it. Not sure they’re really gonna do a run of 5,000. They’re kind of hedging their bets. But Carolyn Massiah has an ingenious idea for Anthony. Think Halloween people.

Carolyn Massiah:             You know what, I would maybe put a bank on someone on the UCF campus having his face as their Halloween costume.

Paul Jarley:                         Oh now there’s a whole new element… [crosstalk 00:06:17]

Carolyn Massiah:             Yeah, but after, I think it’ll trickle off.

Paul Jarley:                         So Carolyn Massiah has called the question here: Is this kid really a thing? Our student ambassador notes, the football team sure seems to think so. You mentioned that you tutor some of the football team.

Marissa:                               Yes.

Paul Jarley:                         What do the players think?

Marissa:                               I mean, there all saw the kid. I know that when I went on his Instagram, cause his picture went viral, I saw there were several comments from football players, saying you’re our guy, man. You’re so cool, yada, yada. Things like that. And all the football players definitely saw him on the screen.

Paul Jarley:                         From Erik.

Erik Kohler:                        I think if you have socks, you’ve made it, yeah.

Paul Jarley:                         From Nick.

Nick Riggle:                        Ah it’s a good question.

Paul Jarley:                         Eh, he’s a philosopher. From Yael.

Yael Zemack-Rugar:        Yeah, he’s an engineering student. He has a good day job.

Paul Jarley:                         Hopefully. It’s my podcast so I get to go last. Anthony offered a social opening, the cameraman was game, he was authentic, it was awesome. Right time, right place, bam, viral. I don’t see this becoming the high five, but Halloween night on campus, well that just might involve a lot of staring. Keep studying Anthony, you have a great story to tell your kids someday. But your future belongs to engineering. Or if that doesn’t work out, you can always walk down the hall to the College of Business.

Paul Jarley:                         In the meantime, go Knights. Stare on.

Paul Jarley:                         What’s your take? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show. Special thanks to my producer, Josh Miranda, and the whole team at the office of Outreach and Engagement here at the UCF College of Business. And thank you for listening. Until next time, charge on.

The post Is The UCF Stare-Down Kid Really a Thing? appeared first on Barry S. Miller College of Business.

Paul Jarley:                         Some say they’re the result of failed parenting strategies. Others say they’re addicted to their phones, narcissistic, and entitled. The Western Michigan Whitecaps celebrated them by giving the first thousand people to come watch the team’s baseball game a participation trophy.

Whitecaps Fan:                 Oh, you know, we just really want a participation trophy.

Whitecaps Fan 2:             Yeah.

Whitecaps Fan:                 It’s been a long week of hard work and-

Whitecaps Fan 2:             We really earned it.

Whitecaps Fan:                 I feel like we really deserve something.

Paul Jarley:                         They job hop, have no loyalty, and want to have an impact, yet their greatest invention just might be selfie. Consultants everywhere just can’t stop talking about them. Millennials want you to think they’re special, but maybe, just maybe, they’re just like the rest of us.

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?” On to our show.

Paul Jarley:                         Like all data-driven decision makers, I’m sensitive to the differences in my staff’s dispositions when assigning them tasks. A few examples. Tiffany is an Aries like me. Anyone that knows Tiff recognizes that she needs to be in a leadership position to satisfy her need for control.

Tiffany Hughes:                I believe I’m tough. I believe I can negotiate extremely well.

Paul Jarley:                         But if Tiff is an Aries, she’s also cold-hearted, reckless, and ruthless.

Tiffany Hughes:                Oh, my heavens, no. I hope not.

Paul Jarley:                         And then there’s the Aries’ legendary ability to deliver bad news.

Tiffany Hughes:                Every day I try to look for the sunshine.

Paul Jarley:                         Yeah, not her. My Associate Dean of Learning, Foard Jones, is a Libra. Like all Libras, he’s extremely intellectual and needs a job that is mentally stimulating. Libras are excellent networkers and take a look at every aspect of the job before completing it. But if Foard’s a Libra, that should also mean he’s resentful, overindulgent, spiteful, indecisive, and gullible.

Foard Jones:                      At times, but most of the times, no. [laughs]

Paul Jarley:                         That doesn’t sound like Foard. Libras sound more like Catbert, the evil HR manager from Gilbert. Good thing I took Foard out of that role. That sounds ridiculous, doesn’t it? No one in their right mind would assign people jobs based on their astrological sign. I don’t know a single reputable management consultant that argues we need to tailor our company HR policies and people’s roles to their birth month. But I do know a ton that say we should vary these same policies based on people’s birth year.

Paul Jarley:                         They say things like this.

Bob Danna:                         One of the things that we’ve teased out is that diversity and flexibility are the key to loyalty. The younger workers, the younger of the millennials feel that they are unprepared for industry 4.0.

Paul Jarley:                         Bob Danna sits on my Dean’s Advisory Board. He’s a retired managing director at Deloitte. Bob has spent much of his career studying people in the workplace. We’ll hear much more from him a bit later.

Paul Jarley:                         For the record, there are seven living generations in America today. But practically speaking, just four are currently in the workplace. Baby boomers were born between 1946 and 1964. Generation X-ers were born between 1965 and 1979. Millennials were born between 1980 and 1994. And Generation Z, people who were born between 1995 and 2012. Right now, the millennials are the ones making the news. The boomers are retiring. Nobody ever thinks about Generation X. And Generation Z is really just getting to adulthood.

Paul Jarley:                         So, if you wanna position yourself as a management consultant who is in the know about generations and make money doing it, you focus on millennials. They’re a very large group entering the primes of their career. But are they really different, or is all this generational advice what Sheldon Cooper might call-

Shelden Cooper:              Just as I suspected, nothing but hokum.

Paul Jarley:                         To find out, I started at the source, millennials themselves.

Jean Paul Enriquez:        My name is Jean Paul Enriquez, and I’m a junior in the College of Business.

Amaireny Lantigua:         I’m Amaireny Lantigua. I’m a junior.

Austen Horton:                 My name’s Austen Horten.

Paul Jarley:                         I didn’t have to go far to get their take.

Jean Paul Enriquez:        Well, the first thing I gotta say is that we definitely always use our phones. We’re attached to technology like never before. Something else is, apparently, we are … we feel like we’re entitled to a lot of things. We’re entitled to more than what we deserve. The last thing is, we lack social intelligence compared to other generations.

Amaireny Lantigua:         When I think about the things that sets millennials apart, would be the technology, as well. Another different thing that sets generations apart will be the culture and what each generation … current events in each generation were.

Austen Horton:                 We’re impatient, confused, and challenged. Rather than entitled, I think impatient’s a better word because a lot of millennials, they just want things done fast. It’s not like they feel they deserve it, it’s just they feel they deserve it quicker.

Paul Jarley:                         Attached to technology, entitled or impatient, socially awkward in face to face situations, confused, challenged, and lost.

YouTube Clip:                     Adulting is hard.

Paul Jarley:                         Good lord. How did they get this way? Professor Libby Mustaine is chair of the UCF sociology department.

Libby Mustaine:               So, I think there are some differences in values.

Paul Jarley:                         She stresses the importance of early life experiences.

Libby Mustaine:               There are historical things that happened. Period effects, if you will, that actually do impact the way people grow up and the way people respond to the experiences that they’ve had. I think a couple of really important things that have happened with millennials is technology. We are so … Think about when we were growing up. I was telling my kids the other day, I was like, “Here you are walking around with a smartphone, all of your friends have one. When I was your age, I had a phone that was tacked to the wall, and if I wanted any privacy at all, I had to hope the cord was long enough and I could go around the corner and talk on the phone.” And then, inevitably, my sister would come and interrupt me and say, “I need time on the phone.” Today, we have nothing like that. We just call each other on our own little personal thing.

Paul Jarley:                         And then, there’s Google.

Libby Mustaine:               You can find out information wherever, whenever, whatever, today. All of that is so impactful, I think, on a generation.

Paul Jarley:                         Bob sees things a little differently. He believes long run industry and technology cycles create pairs of generations that tend to repeat themselves over time.

Bob Danna:                         I think that we’re on a major cycle that’s probably 40 or 50 years in length, including the technology cycle. If you think of the technology revolution that was going on in the 70s, the boomers really drove a big portion of that, and now, looking at the industry 4.0, all of the automation, and connectivity, and A.I., and cognitive technologies, and robotics, that the millennials will drive and are starting to drive, there’s some real parallels to that. The smaller generations that followed both, the X-ers and now the Z’s, probably gonna generally fall in behind those major generations. But it’s not only kind of a generational element, but the cycle is probably more like a 40 or 50 year cycle than just a generational cycle, a single generational cycle.

Paul Jarley:                         Baby boomers and millennials share characteristics because they kicked off technology cycles, while Generation X-ers and Z’s are similar because they closed out these cycles.

Bob Danna:                         I think there’s a number of defining features for both of those groups that actually parallel quite interestingly the characteristics that were associated with both the boomers and the Gen X’s. I’ll just go through them really quickly. Millennials were seen as optimistic. Gen Z are now starting to be seen as realistic. And think about boomers and X’s as I’m going through here, as well.

Paul Jarley:                         We’re going to give you some common contrasts between boomers and X-ers along the way so you can compare. Nothing scientific. Boomers, optimistic. X-ers, pragmatic.

Bob Danna:                         Millennials, collaborative. The Gen Z, independent.

Paul Jarley:                         Boomers, consensus. X-ers, independent.

Bob Danna:                         Millennials, digital pioneers. Gen Z, digital natives.

Paul Jarley:                         Boomers, early IT adopters. X-ers, digital immigrants.

Bob Danna:                         When it comes to millennials, they’re very public. We’re seeing on the Gen Z, they’re becoming more private.

Paul Jarley:                         I got nothing here. Bob’s right. Some of his contrasts have obvious parallels between boomers and X-ers. But others, well, they just don’t seem to fit. For example, social media didn’t exist in the baby boomer, Generation X era, so the privacy contrast that seemed to differentiate millennials from Z-ers just doesn’t apply to the two earlier generations. Makes you wonder, are all these labels really accurate? Libby Mustaine points to some limitations of this research.

Libby Mustaine:               What are the millennials like? And we come up with some list of characteristics. Some of them are a little bit stereotypical, because we don’t all have all of them, you know? I think there’s definitely limitations, because society does not do a complete 180 every 25 years. And I think a lot of times with generations the differences with the generation is … are the younger people. And as you get older, you begin to lose, perhaps, some of your uniquenesses.

Paul Jarley:                         These differences might fade pretty quickly. Bill Steiger, head of our Professional Selling Program, sees no real differences across generations of college students and what they want in a career.

Bill Steiger:                         I just studied the 2,000 business students here at UCF with regard to what are their expectations for their first job? What are they looking for? What’s important to them? What I found is, some of the basis for my study was a questionnaire used ten years ago with Gen X-ers. And guess what? Four of the top five things that were most important were exactly the same.

Bill Steiger:                         Number one was the job itself. In other words, a meaningful job. Number two was a defined career path. Number three was supervision. Number four was comp. It was the only extrinsic motivator in the top five. And the other one was … the fifth one was personal development.

Paul Jarley:                         So, supervision was about feedback? Is that what you’re-

Bill Steiger:                         A defined feedback loop. And in business, the days of the annual performance appraisal are over. They’re done. Nobody in their right mind, even with boomers, wants an annual performance appraisal.

Paul Jarley:                         The serious empirical work on generations is far from conclusive. Listen to Dr. Chris Leo from our Integrated Business Program.

Chris Leo:                            There’s a lot of conflict with this. So you’ve got one researcher by the name of Dr. Jean Twenge who’s written a book called The Me Generation and sold over a hundred thousand copies, and she purports that her research supports that there are generational or cohort differences.

Paul Jarley:                         Which generation does she think is the me generation?

Chris Leo:                            That would be the millennial generation.

Paul Jarley:                         So, it’s really interesting to note that the original me generation were the baby boomers.

Chris Leo:                            And this is the other problem, is how do you define the millennials versus Gen Y, versus Gen X? There are a lot of different authors and researchers that have different definitions. Some Pew research says that millennials start from 1981. Other researchers say 1970. So there’s no agreement among researchers as to how do we clearly define these generational cohorts.

Chris Leo:                            In the other camp, you’ve got a researcher by the name of David Costanza, who’s at George Washington University, who says look, there’s no empirically sound research that is able to pull out time effects and age effects versus just looking at the generational cohort.

Paul Jarley:                         If the research on generational differences is so shaky, why do people keep wanting to talk about it? Bill Steiger offers one explanation.

Bill Steiger:                         It’s fun to talk about. I think that’s one of the reasons why it’s evident in popular press. And it, in fact, provides some basis to explain what is inexplicable, which is the way that people behave.

Paul Jarley:                         Chris Leo says maybe it’s the almighty dollar.

Chris Leo:                            This is big business. There are generational consultants. There’s … I mean, the author that I mentioned, she sold 115,000 copies of her book.

Paul Jarley:                         Nobody in the College of Business is against making a buck. But both Chris and Bill agree that basing your HR policies on generational differences is a very dangerous thing to do.

Bill Steiger:                         I think any situation where you make an assumption based upon how the other person is going to react, if you make that assumption before you ask questions, you listen, you are going to find yourself in some deep water, because people don’t behave the way that, fundamentally, they always behave within a generation.

Paul Jarley:                         Chris explains this concern in greater detail.

Chris Leo:                            I think that it leads us to stereotyping. We cannot assume that a person who was born in 1981, that may have these stereotypical characteristics, to be like another person or to be different from a person who was born as a Gen X-er. So, we would say that … a common stereotype is, well, you know the millennial generations are more tech savvy. Well, I mean, that’s not to say that a Gen X-er may not be as tech savvy. You never look at the average and then apply that average to the individual. That’s dangerous.

Paul Jarley:                         Great. If this is all hokum, what do I tell my millennials, all of whom believe they’re part of a special generation destined for greatness?

Chris Leo:                            Well, I mean … I think we’re … I think every generation is great. I think every generation is special. Everyone is unique. But, the recipe for success doesn’t change. Whether you’re in this generation or that generation, it’s hard work, and it’s persistence, and it’s taking risks, smart risks, and persisting in the face of failure.

Paul Jarley:                         Chris, by the way, is a millennial.

Bill Steiger:                         I would guess that last year’s undefeated UCF football team, Scott Frost didn’t tell every player that they were special. Everybody had a role. That role varies. And within context of when you were born, you have a role. Whether you’re special or not really is determined by you.

Paul Jarley:                         Yes. Everything at UCF eventually does come back to our National Championship football team. Both Bill and Chris might poo poo generational research, but they both believe in period effects. And as Bob Danna notes, the times, they are a changing.

Bob Danna:                         The younger workers, the younger of the millennials, feel that they are unprepared for industry 4.0. They expect the companies they’re working for actually to help them prepare for industry 4.0. So, what happens after everything that can be automated is automated? Everything that’s turned over to AI and cognitive technologies has been turned over to AI and cognitive technologies. Everything that’s self-service is self-service. What’s left for them? How are they gonna now contribute in an organization? They feel unprepared to answer that question.

Paul Jarley:                         If you’re a boomer or an X-er, you probably think you’re gonna be able to retire before this wave really hits. But if you’re a millennial starting the middle of your career, this scares you to death. And frankly, it keeps deans like me up at night. How do we prepare students for this great unknown? It’s time to call the question. So, do you think millennials are a thing? From Libby Mustaine.

Libby Mustaine:               Yes, I do.

Paul Jarley:                         From Bob Danna.

Bob Danna:                         I’m a big believer that there are generational differences.

Paul Jarley:                         From Chris Leo.

Chris Leo:                            We like using labels.

Paul Jarley:                         From Bill Steiger.

Bill Steiger:                         No, I don’t think they’re a useful thing.

Paul Jarley:                         It’s my podcast, so I get to go last. Boomers started the IT revolution. Millennials launched the digital age. These two generations have had the huge impact on our world. But that doesn’t mean that they’re all wired the same way. Gross generalizations are dangerous, and some things are timeless. A good job is one of them. And as far as millennials wanting things too fast, well, that sounds a lot like that old guy who tells kids to get off of his lawn. Sorry, millennials, you’re not special, and you’re not really a thing.

Tiffany Hughes:                Oh, heavens, I hope we didn’t hurt anybody’s feelings.

Paul Jarley:                         What’s your take? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests, and notes from the show.

Paul Jarley:                         Special thanks to my producer, Josh Miranda, and the whole team at the Office of Outreach and Engagement here at the UCF College of Business. And thank you for listening. Until next time, charge on.

The post Are Millennials Really a Thing? appeared first on Barry S. Miller College of Business.