Research@Smith
MARCH 2010
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2
A crystal ball for
consumer spending
4
Better product
design
Special Marketing Issue
6
Word of mouth
marketing
T
his issue of Research@Smith highlights some
recent stellar work from our marketing department.
But the Smith School has bench strength in each of our
academic areas.
Dean’s
column
Research@Smith
VOL
One of the greatest strengths of the Smith School
is the quality of our faculty. If you consider research
productivity—the number of publications in top
journals—then our faculty is always ranked among
the best in the country by such publications as
Business Week and the Financial Times. They publish
research that influence the work of other academics
and that is used by practitioners and policy-makers.
NO
11 1
But their work also has impact out in the real world.
Smith faculty work directly with corporations as
Research@Smith summarizes research conducted by
the faculty of the Robert H. Smith School of Business
at the University of Maryland.
consultants and regularly speak to executives through our
Thought Leadership Speaker Series, held in downtown
Washington, D.C. and Baltimore. Smith’s Centers of
Excellence are also a nexus for theory and practice, as
Dean
organizations bring real-world, real-time problems to
G. Anandalingam
Smith faculty experts. In this issue you’ll learn more
about research that grew out of a project Professor P.K.
Director of Research
Kannan conducted with Black & Decker. Smith faculty
Michael Ball
have worked with every industry imaginable, and with
Editor
Rebecca Winner
federal, state and local governments and NGOs as well.
All this translates into impact—on academic disciplines
Contributing Writers
as well as on the workday world. That impact is the
Carrie Handwerker
hallmark of Smith faculty research. I encourage you to
Jessica Bauer
contact us if there are ways we can partner together.
Design
Lori Newman
Research@Smith is published three times a year
G. “Anand” Anandalingam
by the Robert H. Smith School of Business,
Dean, Robert H. Smith School of Business
University of Maryland; 3570 Van Munching Hall,
University of Maryland
College Park, MD 20742. www.rhsmith.umd.edu
We’d like to put Research@Smith directly into the
hands of academics, executives, policy-makers, and
others who are interested in learning about the latest
research conducted by Smith School faculty. To
request a copy of this publication or make an address
correction, contact Rebecca Winner via e-mail,
editor@rhsmith.umd.edu, or phone, 301.405.9465.
Visit the Smith Research Network:
www.rhsmith.umd.edu/smithresearch
Research@Smith
MARCH 2010
Customer Satisfaction to Forecast Spending VOL
NO
11 1
page 2
Research by Roland Rust
Customer satisfaction is a better predictor of future consumer
spending than any other factor.
Subjective Characteristics in Product Design page 4
Research by P.K. Kannan
Understanding how objective and subjective characteristics jointly influence
consumers’ purchasing decisions allows for better product design.
WOM vs. Traditional Marketing page 6
Research by Michael Trusov
Word of mouth marketing is more effective and has a longer
carryover effect than traditional marketing methods.
Spotlight on Marketing
page 8
Featured Researchers
Smith’s Center for Complexity in Business
page 10
ThoughtLeadership@Smith Speaker Series
Smith Attracts Top Marketing Talent
page 11
Executive Profile: Shane Shrader, Director of Internal Audit,
Hughes Network Systems
page 12
Customer
satisfaction to forecast
Customer satisfaction is a better
predictor of future consumer
spending than any other factor.
spending
E
conomists may have found their crystal
must have the ability to spend—the researchers had
ball. According to new research from Roland Rust,
to include adjustments for household debt-service
Distinguished University Professor of Marketing at
ratios in their model to account for the impact of
the University of Maryland’s Robert H. Smith School
the recent financial/housing crisis. Even with these
of Business, a major marketing variable—customer
considerations, the relationship between satisfaction
satisfaction – holds the key to what’s next for the
and future spending remained strong.
U.S. economy.
This is the first time the role of marketing has been
Rust and co-authors Claes Fornell of the University of
tied to predictions about the economy and the results
Michigan and Marnik Dekimpe of Tilburg University
are more than twice as accurate as any previous
in the Netherlands used data from the American
attempt to predict consumer spending. Using this
Customer Satisfaction Index to forecast future growth
model, an economist can forecast 35 percent of the
in consumer spending, a huge portion of the U.S.
change in consumer spending three months in the
GDP (70 percent by some estimates) and therefore an
future. By contrast, the closely followed Index of
accurate gauge of the overall health of the economy.
Consumer Sentiment explains only about 14 percent
of the one-quarter-ahead variation in the growth of
“We’re telling decision makers what’s going to
total real personal consumption expenditure. Other
happen to consumer spending,” Rust says.
models that used consumer credit and income to
“If consumer spending is likely to go up, business
predict future spending explain less than 10 percent.
decision-makers might spend more, hire more people,
build up production, advertise more, etc., if they
“We’re clearly saying that there are marketing-related
know they are heading into an attractive business
variables that can play a role in predicting what
environment. Policy-makers can use this to determine
aggregate consumption is going to do,” says Rust.
stimulus funding or interest rates cuts. Bottom line,
“It’s more of a predictive tool than anything else.
people can use this model to make smart decision
It’s not really that we’re telling people how to satisfy
about the allocation of resources.”
customers—or even that they should or shouldn’t. It’s
more after they’ve done it or not, here’s what’s going
The researchers show that change in overall customer
to happen.”
satisfaction has a significant impact on future
2
consumer spending: happy, satisfied customers will
Michigan’s Fornell has been collecting customer
increase their spending and in turn pull the economy
satisfaction data since 1994 when he published
up with their purse strings. But willing consumers also
the first quarterly American Customer Satisfaction
march 2010 : VOLUME 11 : NUMBER 1
Research by
Roland Rust
Index, an economic indicator based on modeling
Better understanding of consumer spending
customer experience with the quality of goods and
growth should result in companies making
service purchased in the United States. For this study,
the researchers analyzed the relationship between
the ACSI and discretionary consumer spending
better marketing plans and more accurate
sales forecasts, which in turn should lead to
by developing an econometric model using the
better decisions in all major areas of marketing,
index data along with data from the U.S. Bureau of
including product development, pricing,
Economic Analysis measuring discretionary consumer
promotion, distribution, capacity planning and
expenditures and real personal disposable income;
staffing decisions.
the Consumer Price Index from the Bureau of Labor
Statistics; the Index of Consumer Sentiment from the
companies making better marketing plans and more
University of Michigan; and the Debt Service Ration
accurate sales forecasts, which in turn should lead
and real consumer credit based on total consumer
to better decisions in all major areas of marketing,
credit outstanding from the Federal Reserve.
including product development, pricing, promotion,
distribution, capacity planning and staffing decisions.
“That was key element to have in our model,” Rust
says of the consumer debt element. “We tried to keep
“The Effect of Customer Satisfaction on Consumer
the model simple—have as few variables as possible—
Spending Growth,” was published in the February
but it turned out that without that variable we would
2010 issue the Journal of Marketing Research. For
have missed the past few years by quite a lot because
more information about this research, contact
of that variable becoming pretty important for a lot
rrust@rhsmith.umd.edu.
of people.”
Not only are the research findings important
for the economy in general, they also have big
implications for marketing. Better understanding
of consumer spending growth should result in
RESEARCH@SMITH
3
Award- inning
W
Subjective characteristics
in product
Understanding how objective and subjective
characteristics jointly influence consumers’ purchasing
decisions allows for better product design.
A
t the Smith School, collaboration across
design
development project of a new power tool. To see
functions and disciplines is common, but so is
if the model was valid across product categories,
collaboration with business practitioners, who bring
they conducted a second study in the toothbrush
real-world problems for real-world solutions. For
category. (To do so they surveyed Smith School
example, recent research by P.K. Kannan, Harvey
undergraduates. Good news—they brush their teeth!)
Sanders Associate Professor of Marketing, with coauthors Lan Luo, University of Southern California,
A consumer’s perception of a subjective characteristic
and Brian Ratchford, University of Texas-Dallas, could
like heaviness is dependent on a complex set of
change the way manufacturers design their products.
factors that varies from person to person. “When
I tell you the weight of a product, you and I both
Kannan had a long-term research relationship with
understand what that is,” says Kannan. “We can
tool manufacturer Black and Decker. In the process
measure weight, or memory capacity in a computer,
he discovered that it isn’t enough to just think
or power in amps. But even though weight is an
about a product’s objective features, such as price or
objective attribute, the feeling of heaviness is a
weight. When consumers buy products, they are also
subjective attribute, and those attributes influence a
considering subjective characteristics like comfort and
consumer’s decision to buy a product.”
effectiveness, which can’t be measured as easily.
The perception of a subjective characteristic like
Although companies consider subjective
heaviness is so difficult to measure because it varies
characteristics in the process of product design, no
from person to person, regardless of a tool’s objective
formal model existed to help designers account for
weight. A consumer with smaller or weaker hands
the impact of subjective characteristics. Kannan and
may perceive a tool as heavier than a person with
his co-authors developed a model that helps product
bigger or stronger hands.
designers understand the relationships between
objective attributes and subjective characteristics, and
One subjective characteristic may affect consumer
how both jointly influence consumers’ purchasing
perception in other ways as well. When people
decisions. This allows design engineers to gauge
hold it in their hands, if a tool feels heavy a person
more accurately how consumers will respond to a
may perceive that the tool is more powerful. So
product’s design.
the objective attribute of weight then affects the
perception of a tool’s effectiveness, its ability to do the
Kannan and his co-authors applied the model to
job for which it was designed.
data collected jointly with Black & Decker in the
4
march 2010 : VOLUME 11 : NUMBER 1
Research by
P.K. Kannan
The model uses data gathered from consumers
When people hold a tool in their hands, if it
who compare several customer-ready prototypes of
feels heavy a person may perceive that the tool
a potential new product design, and incorporates
their ratings with additional data on subjective
characteristics. The model views each prototype as
is more powerful. So the objective attribute of
weight then affects the perception of a tool’s
a specific combination of objective attributes like
effectiveness, its ability to do the job for which it
shape and weight (plus price). As the combinations of
was designed.
attributes vary consumers’ perceptions of the subject
characteristics—like perceived comfort and perceived
or screen sharpness; these characteristics could also
heaviness—change accordingly.
be modeled for potential new designs.
The expense of producing multiple prototypes has
This kind of diagnostic information is also important
always presented a barrier to their use in the design
for managers, allowing them to better position and
process, however. Kannan suggests that information
promote a new product properly in the marketplace.
about different characteristics could be garnered
from different models of products already on the
“Incorporating Subjective Characteristics in Product
market, or that virtual-reality representations
Design and Evaluations” was published in the Journal
could be considered as substitutes for physical
of Marketing Research. It was a finalist for the 2008
prototypes. That would make the model feasible
Paul Green Award and won the 2009 Don Lehmann
for practical application.
Award from the American Marketing Association.
The annual award honors the best dissertation-based
Kannan also believes that the model could be
article published in the Journal of Marketing Science
widened for use outside the small-tools industry
or Journal of Marketing Research in the previous two
across an entire range of consumer durables. Laptops
years. Co-author Lan Luo is a former Smith School
are judged on subjective characteristics of heaviness
PhD student. For more information, please contact
pkannan@rhsmith.umd.edu.
RESEARCH@SMITH
5
WOM vs.
traditional
Word of mouth marketing is more
effective and has a longer carryover effect
than traditional marketing methods.
marketing
T
he power of word-of-mouth marketing has never
observable. The social networking site setting
been more important or more cool. “Buzz” is the
considered in Trusov’s work offered an appealing
Holy Grail for many companies who wish that word
context in which to study word-of-mouth. Popular
about their product offerings would go viral. Few
sites such as Facebook or MySpace provide easy-to-
would argue that today’s consumer has the power
use tools for current users to invite others to join the
to influence their fellow consumers as never before.
network. The electronic recording of these outbound
But word-of-mouth advertising has been very difficult
referrals opens a new window into the effects of
to evaluate and quantify in a way that would allow
WOM, giving researchers an unobtrusive trace of this
marketers to establish how effective it really is.
often hard-to-study activity. When combined with
data that also tracks new member signups, it becomes
Michael Trusov, assistant professor of marketing,
possible to model the dynamic relationship between
with co-author Randolph E. Bucklin, University of
this form of word-of-mouth and the addition of new
California-Los Angeles, and Koen Pauwels, Ozyegin
members to the social networking site.
University, Istanbul, Turkey, examined the effect of
word-of-mouth (WOM) marketing on membership
Using a Vector Autoregression model, Trusov found
increases at a popular social networking site and
that WOM referrals have much stronger impact
compared it with the effectiveness of some traditional
on new customer signups compared to traditional
marketing techniques, such as event marketing and
marketing efforts, and that the effect of WOM lasts
media advertising.
longer than the effect of traditional marketing.
Doubling the amount of WOM increased new
WOM communication strategies are appealing
customer signups by 17 percent. When measured
because they combine the prospect of overcoming
over a long time period, the effect of WOM is 20
consumer resistance with significantly lower costs
times that of event marketing and 30 times that of
and fast delivery, says Trusov. Unfortunately, empirical
media appearances.
evidence is currently scant regarding the relative
effectiveness of WOM marketing in increasing firm
Part of the reason for the high long-term effect of
performance over time.
WOM relative to traditional marketing is that it has a
much longer carryover period. An increase in WOM
6
The key challenge is that while traditional
continues to affect new member sign-ups for three
marketing activities are relatively easy to quantify,
weeks, while traditional marketing effects last for three
social interactions are not, because they are rarely
to seven days. There seems to be a positive feedback
MARCH 2010 : VOLUME 11 : NUMBER 1
Research by
Michael Trusov
cycle with WOM: WOM leads to more new members
There seems to be a positive feedback cycle with
and more new members lead to more WOM—which
WOM: WOM leads to more new members and
then leads to more new members. Indeed, the longrun impact of WOM-referrals is akin to the “gift that
keeps on giving,” especially when compared to the
more new members lead to more WOM—which
then leads to more new members.
performance of traditional marketing activities.
how to allocate resources across different media,”
And WOM may enhance the effectiveness of
says Trusov. “And it is important for companies to ask
traditional marketing when that traditional marketing
themselves how much they’d be interested in paying
tool stimulates WOM—such as when a particularly
for each referral.”
funny television commercial becomes water cooler
conversation the following morning or prompts
“Effects of Word-of-Mouth versus Traditional
people to e-mail the YouTube link to their friends.
Marketing: Findings from an Internet Social
Networking Site,” was published in the Journal
This research offers managers a tool which can help
of Marketing. It was the runner-up for the 2009
to evaluate the extent to which financial incentives to
Marketing Science Institute/H. Paul Root Award and
existing customers might be used to stimulate WOM,
a finalist for the 2009 Harold H. Maynard Award.
says Trusov. The results obtained through a simulation
For more information about this research, contact
analysis suggest that social networking firms with
mtrusov@rhsmith.umd.edu.
a primary stream of revenues from online display
advertising might benefit from paying their customers
to spread the word about their site.
“This research will help companies more effectively
gauge the effectiveness of WOM and incorporate it
into their marketing strategy, so they can figure out
RESEARCH@SMITH
7
Spotlight
on
marketing
Marketing Impact Starts Here
The Smith School’s marketing department combines
Capitalizing on its faculty expertise in service, the
leading scholars who have had profound influence
marketing department has carved a unique niche
on the discipline with young scholars showing great
as a world leader in customer equity management
promise and potential for impact. Faculty explore
and service; it sponsors the Center for Excellence in
issues related to quantitative modeling, strategic
Service and its annual Frontiers in Service Conference
marketing, and consumer behavior and are leaders
as well as the Journal of Service Research. Two of
in the nascent field of applying complexity theory
the leaders of the Smith School’s new Center for
to business problems. A uniquely collaborative and
Complexity in Business, Executive Director Roland
cross-functional environment brings faculty together
Rust and Research Director William Rand, are part
to produce research published in the top journals in
of the marketing department. The Center for
marketing as well as in other fields.
Complexity in Business promotes the interdisciplinary
study of large groups of interacting, heterogeneous,
Smith’s marketing department has been the home
autonomous entities operating in dynamic, rich, and
of top marketing scholars for a number of years.
temporal environments.
Roland Rust, Distinguished University Professor and
David Bruce Smith Chair of Marketing, has won the
Innovations in the classroom have also brought
prestigious MSI-Paul Root award from the Journal
greater intellectual capital to the learning
of Marketing three times and is the holder of career
environment at Smith. Over the last few years, the
awards in advertising, services marketing, marketing
marketing department has focused its educational
research, and statistics. Michel Wedel, Pepsico
mission on data-driven decision making, encouraging
Professor of Consumer Science, recently received the
the development of such skills in all MBA courses.
American Marketing Association’s Gilbert A. Churchill
Students learn to integrate marketing theory and
Award for lifetime achievement in the academic study
analytical tools, applying analysis of real data to
of marketing research. Department chair P.K. Kannan,
make strategic decisions in a theoretically and
professor of marketing, is also a prolific researcher
analytically sound manner. In addition to extensive
whose partnerships with industry have resulted in
course offerings at the MBA and undergraduate
award-winning and influential research (read
levels, the department offers a vibrant PhD program,
about some of his recent research on pages 4-5
consistently placing students at top institutions.
of this issue).
8
MARCH 2010 : VOLUME 11 : NUMBER 1
Significant contributions and
Jie Zhang, associate professor of
Rust and Associate Professor
breakthrough research were
marketing and Harvey Sanders
Rebecca Hamilton’s paper
recognized with a shower of
Fellow of Retail Management, and
“Feature Fatigue: When Product
Michel Wedel, Pepsico Professor
Capabilities Become Too Much
of Consumer Science, published a
of a Good Thing,” (2005) was a
paper titled “The Effectiveness of
finalist for The O’Dell Award, given
Customized Promotions in Online
five years after publication to the
Roland Rust, the following faculty
and Offline Stores” (Journal of
paper published in the Journal of
were also honored:
Marketing Research April 2009). It
Marketing Research that has “made
accolades last semester. In addition
to the honors garnered by P.K.
Kannan, Michael Trusov and
was a finalist for the Paul Green
the most significant, long-term
Wendy Moe, associate professor
Award for the article published
contribution to marketing theory,
of marketing, received the 2010
in 2009 with the most potential
methodology, and/or practice.”
American Marketing Association
to contribute significantly to the
Their co-author Deborah Viana
(AMA) Erin Anderson Award for
practice of marketing research.
Thompson received her PhD from
an Emerging Female Marketing
the Smith School.
Scholar and Mentor. The award is
Roland Rust, Distinguished
given annually at the AMA Winter
University Professor, David
Rosellina Ferraro, assistant
Educators’ Conference to a female
Bruce Smith Chair in Marketing,
professor of marketing, received an
marketing professor who has made
Executive Director of Center
Honorable Mention for the 2009
significant research contributions
for Excellence in Service , and
Ferber Award for her paper “The
in terms of publications in leading
Executive Director of Center for
Power of Strangers: The Effect
journals and working papers under
Complexity in Business, won the
of Incidental Consumer-Brand
review as well as for teaching
2010 Sheth Foundation/Journal
Encounters on Brand Choice,”
and service contributions to her
of Marketing Award honoring the
with James R. Bettman, and
department. Moe’s research
article with the greatest long-term
Tanya L. Chartrand, given to the
interests include modeling online
impact for “Return on Marketing:
best interdisciplinary dissertation
consumer shopping behavior and
Using Customer Equity to Focus
article published in the latest
early sales forecasting. Her current
Marketing Strategy” (with Kay
volume of the Journal of Consumer
research focuses on technology-
Lemon and Valarie Zeithaml).
Research. The Robert Ferber Award
enabled measures of early
Valarie Zeithaml received her PhD
competition is held annually in
product success.
from the Smith School.
honor of one of the founders and
the second editor of the Journal of
Consumer Research.
RESEARCH@SMITH
9
Featured Researchers
models. She is particularly interested in
entering the mainstream of management
their applications in the Internet shopping
research as well. The center’s areas of
Michael Trusov, assistant professor of
environment. Her research has won the
focus will include applications of complex
marketing, received his PhD degree from
Procter & Gamble Marketing Innovation
systems methods, such as agent-based
the Anderson School of Management at
Research Award and has been sponsored
UCLA. He also holds a Master’s degree in
by the Marketing Science Institute.
Computer Science, a Master’s degree in
simulation, to analyze and solve problems
that arise when a large number of
entities—consumers, employees, traders,
firms, etc.—interact in ways that stretch
Business Administration, and is a winner of
Rebecca Hamilton, associate professor
MSI’s Alden Clayton Doctoral Dissertation
of marketing, received her PhD from the
Competition. Trusov’s research interests
Massachusetts Institute of Technology.
include Internet and E-Commerce, Discrete
Her research focuses on aspects of group
Choice Modeling, Eye-tracking and
decision making, such as the strategies
Data Mining.
people use to influence others’ choices and
In addition to research projects undertaken
the mental models people use to identify
with corporate partners, the center will
Roland Rust, Distinguished University
whether the process used to make a choice
also be active in educating business leaders
Professor, David Bruce Smith Chair in
was fair or unfair.
and students in the use of complex systems
the limits of traditional management tools
like game theory, operations research,
statistical analysis, controlled experiments,
qualitative methods, and the like.
methods to analyze and solve business
Marketing, executive director of Center
for Excellence in Service, and executive
Wendy Moe, associate professor of
director of Center for Complexity in
marketing, received her PhD from the
Business, received his PhD from the
University of Pennsylvania. She also holds
University of North Carolina-Chapel Hill.
an MBA from Georgetown University.
His research focuses on customer equity
Her research interests lie in modeling
and the services discipline.
online consumer shopping behavior
problems, including doctoral seminars,
MBA elective courses and group projects
with partner companies.
The center is interdisciplinary and draws
on the expertise of faculty across the Smith
School and the University of Maryland
and early sales forecasting. Some of her
from many departments and disciplines,
P.K. Kannan, chair of the marketing
previous work has focused on developing
including decision, operations and
department, received his PhD from Purdue
statistical methods and models for internet
information technologies; marketing; and
University. His current research focuses on
clickstream data. Her current research
computer science.
new product/service development, design
focuses on technology enabled measures
and pricing digital products and product
of early product success.
director Wolfgang Jank, associate professor
lines, marketing and product development
on the Internet, e-service, customer
relationship management (CRM), and
customer loyalty.
Michel Wedel, PepsiCo Professor of
Consumer Science, received his PhD
from the University of Wageningen,
Netherlands. His main research interest is
of decision, operations and information
Smith’s Center for
Complexity in Business
Professor, and executive director of
in Business (CCB) was launched in
the Center for Excellence in Service;
2008 to focus on the application of
complex systems research to business
problems. Complex systems consist of
many components exhibiting non-linear
interactions, whose behavior cannot be
further the understanding of consumer
adequately understood or predicted by
behavior and to improve marketing
simple global models or by analyzing
decision making.
the components in isolation. Examples
of complex systems include human
of marketing, received her PhD from
Northwestern University. Her research
applies econometric and statistical models
to study consumers’ purchase behavior
and response to various promotion
Rust, David Bruce Smith Chair in
Smith’s Center for Complexity
statistical and econometric methods to
Retail Management and associate professor
technologies; executive director Roland
Marketing, Distinguished University
in consumer science: the application of
Jie Zhang, Harvey Sanders Fellow of
The center’s leadership team includes
economies, the climate, societies of
cells and living things, including human
beings, as well as modern energy or
research director and assistant professor
of marketing William Rand; and principal
administrative officer Carrie Baran.
The center recently received its first grant,
a joint award from Google and the WPP
Group, Inc., the world’s second largest
communications service provider (and
producers of the popular e-Trade Baby
Banker television ads). The center will
examine the development of new content
networks on the Web. The proposal
telecommunication infrastructures.
was reviewed by a prestigious academic
Cheap computational power has allowed
California-Berkeley; Glen Urban, MIT; and
researchers and practitioners to successfully
apply complex systems methods to analyze
programs, and designs innovative decision
previously intractable problems in areas
support tools for marketers based on these
such as engineering, physics, biology, and
panel including Hal Varian, University of
John Quelch, Harvard.
For more information, contact
wjank@rhsmith.umd.edu.
sociology. Complexity methods are now
10
MARCH 2010 : VOLUME 11 : NUMBER 1
ThoughtLeadership@Smith
Be First With Big Ideas
The Smith School’s world-class faculty discuss their latest research on topics of broad interest and importance at the
ThoughtLeadership@Smith Speaker Series. Each presentation is followed by an opportunity to network with alumni and regional
business leaders at one of Smith’s convenient local campuses in Washington, D.C., or Baltimore, Md. Breakfast begins at 8 a.m.;
presentations begin at 8:30 a.m. and are followed by a Q&A period concluding at 10 a.m. Cost is $25 for the general public.
For more information or to register, visit www.rhsmith.umd.edu/thoughtleadership.
February 26, Washington, D.C.;
and May 7, Baltimore, Md.
Joyce E. A. Russell
Ralph J. Tyser
Distinguished Teaching Fellow
March 5, Baltimore, Md.
April 30, Washington, D.C.
J. Robert Baum
Associate Professor of Entrepreneurship
Clifford Rossi
Tyser Teaching Fellow and
Managing Director
Center for Financial Policy
Passion—and Confidence—in
Successful Entrepreneurs
Build Bench Strength by
Developing Your Employees
Who really has what it takes to take a
On-the-job experience can be a powerfully
napkin to financial success? “Passion plus
transformative tool for professional
confidence” appears to be key, according
growth—in fact, research indicates it may
to new research from Smith. Baum will
be the primary vehicle for learning critical
discuss personal, knowledge-based and
leadership skills. Toward that end, many
behavioral predictors of successful startups
companies groom their high-potential
based on an extensive, six-year study
managers through “stretch” assignments
of entrepreneurs.
new business startup from back-of-the-
and other developmental experiences.
Russell discusses the latest research,
uncovering who might benefit most from
these experiences and how best to
use them in your own organization to
build your bench strength and keep
high potential employees on the road
to success.
March 12, Washington, D.C.
April 9, Baltimore, Md.
Robert M. Sheehan, Jr.,
Author and Academic Director
Executive MBA Programs
Designing Mission-Driven
Organizations
Most people want their organizations to
be mission-driven, but do you have the
know-how and skills to make it happen?
Sheehan, author of a new book, Mission
Impact, shows how to craft a vision aligned
with your organization’s mission. Learn
how to design strategic goals that will
inspire your employees, create exceptional
value for all stakeholders and move your
organization toward maximum impact.
Smith Marketing Department
Attracts Top Talent
Risky Business: How Incentives,
Governance and Management
Impact Your Firm’s Risk Profile
Get an insider’s view of the financial
meltdown from the vantage point of a
chief risk officer for some of the largest
financial institutions in the country
(including CitiGroup and Countrywide
Bank). Rossi presents a tour of governance
issues, incentives for risk-taking and risk
management practices in the financial
services industry leading up to the crisis,
and recommendations for strengthening
risk management practices in
financial services.
Campus L oc at ions :
Washington, D.C.
Ronald Reagan Building & International
Trade Center
1300 Pennsylvania Avenue, N.W.
Federal Triangle Metro stop
Baltimore, Md.
Baltimore BioPark
University of Maryland-Baltimore
801 W. Baltimore St.
the University of Pennsylvania, has already
the Journal of Marketing Research with
published several papers in top journals on
her research on consumers’ hedonic
competitive marketing strategies, market
experiences and judgments. Finally, William
Smith’s marketing department has
entry and product diffusion. Tao Chen,
Rand, who joined the Smith School in
successfully recruited several active
who joined the Smith School in 2008
2008 after receiving his PhD from the
assistant professors over the past three
after receiving her PhD from Carnegie
University of Michigan, uses computational
years. Michael Trusov, who received his
Mellon University, has been successfully
modeling techniques like agent-base
PhD from UCLA’s Anderson School of
publishing papers on the dynamic effects
modeling in his research and currently
Management in 2007, studies Internet
of pricing and promotion strategies.
serves as the Research Director of the
social networks and online word of mouth
Anastasiya Pocheptsova, a 2008 graduate
Center for Complexity in Business.
and has received several awards and
of Yale University, has enlightened readers
mentions for his publications. Yogesh Joshi,
of the Journal of Consumer Research and
a 2007 graduate of the Wharton School at
RESEARCH@SMITH
11
Executive Profile:
Shane Shrader
Director of Internal Audit, Hughes Network Systems
The Smith S chool’ s e x e cut iv e educ at ion programs give exec ut iv es in th e workpla c e
ac c ess t o t hought lead ership f rom the superstars of Smi th labs and classrooms .
Shane Shrader has gone far in his
Shrader, a CPA and
career. He is the director of internal
certified internal
audit at Hughes Network Systems, LLC
auditor, says he learned
(HUGHES), a company that provides
a lot about models,
broadband satellite networks and
the drivers of the cost
services to governments, businesses
of capital, return on
and individual consumers. Shrader has
investment, and how
been with Hughes since August 2006
that affects investors.
and leads the internal audit group
He says that he
that is instrumental in ensuring the
imagined the course
team on keeping meetings shorter,
organization’s compliance with the
“was even more helpful for those who
on point, and making sure we
Sarbanes-Oxley Act of 2002, which
aren’t accountants by nature.”
come prepared.”
company boards, management and
Shrader says the class helped him
After the final session, Shrader and
public accounting firms to follow.
look and think about the big picture,
the other members of the class had
particularly in understanding
a lunch with senior executives to
Before working at Hughes, Shrader
risk assessment from a company
continue the discussion, something
did consulting and worked as a
perspective. “We discussed several
Shrader says “empowered us as a
public accountant for a few years,
factors—fraud, key drivers of
group to reexamine how we do
gaining an expertise in Sarbanes-
management manipulation, what
some of our day-to-day processes.”
Oxley compliance. He graduated from
investors want—and how we needed
He valued the input of other senior
Towson University and worked for a
to have controls around those areas.”
executives and appreciated the
created new standards for public
small accounting firm for about
eight years.
opportunity to hear their thought
Shrader had taken leadership courses
processes.
before, but never quite like the Smith
Recently, Shrader took part in the
School’s program. “In a breakout
“The class motivated me,” Shrader
leadership development program
session we were talking about how we
says. “What can I do better for my
that the Smith School developed for
could be more productive,” Shrader
company; what can I do better for my
Hughes. He was nominated by the
says. “A lot of folks said ‘We have
career; what can I do better for my
company and Hughes’ chief financial
meetings to have meetings.’ That
employees’ careers?”
officer to attend three classes: financial
was a major concern from a Hughes
acumen; beyond budget cuts; and
perspective. I realized I might have
To learn more about the Smith
leading for success.
fallen into that habit as well; that
School’s custom executive education
maybe I needed to work with my
programs, contact Greg Hanifee,
ghanifee@rhsmith.umd.edu.
12
MARCH 2010 : VOLUME 11 : NUMBER 1
University of Maryland
The University of Maryland, College Park, is one of the nation’s top 20 public research universities. In 2007,
the University of Maryland received approximately $407 million in sponsored research and outreach activities.
The university is located on a 1,250-acre suburban campus, eight miles outside Washington, D.C., and 35 miles
from Baltimore.
Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and
research. One of 13 colleges and schools at the University of Maryland, College Park, the Smith School offers
undergraduate, full-time and part-time MBA, executive MBA, MS, PhD, and executive education programs, as well
as outreach services to the corporate community. The school offers its degree, custom and certification programs
in learning locations on three continents—North America, Europe and Asia. More information about the Robert H.
Smith School of Business can be found at www.rhsmith.umd.edu.
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In this issue
Special Marketing Issue!
• A crystal ball for consumer spending
• Design products with consumers in mind
• Why word of mouth marketing works
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