Stephan Liozu Studies the Disconnect between Research and Practice of Value-Based Pricing Orientations

There are three common orientations for setting prices: cost-based, competition-based, or value-based. Academics have long extolled the virtues of value-based pricing, but practitioners continue to focus primarily on cost or competition based practices.  There is a major disconnect here.  Industrial pricing is a ‘problem of practice' desperate for the help of a practioner-scholar.

Enter Stephan Liozu (DM 2012).  Through his work with theWeatherhead DM program, Stephan is investigating why this disconnect between research and practice exists and what it means, and he's starting to get some answers.  Liouzu indicates that the adoption of value-based pricing is not as straightforward in practice as one might think.  A shift to value-based pricing is often challenging for organizations to implement, in part due to the limits of human interpretation.  Value-related issues are "difficult to define, conceptualize and measure" and the adoption of value-based pricing requires more than just a simple decision on the part of a manger, but often "requires an organizational transformation." 

Stephan was a keynote speaker for the Professional Pricing Society's Annual Pricing Conference in Chicago on May 7, 2010. His one-hour presentation "Pricing Orientation in Business Markets: Gap between Theory and Practice" focused on the problem of practice in the area of the adoption of value-based pricing in small and medium industrial firms. This work was based on his first-year work in the DM program.

According to Stephan, "I came in the program with some basic idea of what my research interest was. The first year of the program was a challenging and rich journey... The DM program is intellectually powerful and enriching from the get go. A year into the program, I realize how much I have accomplished with the support from great advisors and faculty. Presenting my first paper in Chicago in May 2010 as a practitioner scholar confirmed the novelty and relevance of my research project. This program has awakened my interest in academic research that is grounded in practice and interdisciplinary in nature."

Stephan is President & CEO of Ardex / W.W. Henry Company, a manufacturer of high performance building products. Stephan has masters degrees from Institut d'Administration des Entreprises and Cleveland State University, and has also completed Harvard Business School's General Management Training Program. He is a visiting professor with the Unversite Toulouse, where he teaches international business-to-business pricing strategies.

Joe Mandato's Insight into the Way Venture Capitalists Think about Opportunities

Joe Mandato (DM 2004) knows how to start-up, run, and sell medical device companies.  Over the last three decades he has served as CEO for a variety of healthcare companies, including Origin Medsystems, Guidant, Gynecare, and Ioptex Research.  He orchestrated the sale many of these startups to the likes of Eli Lilly, Johnson & Johnson and others.  He is currently the managing director of DeNovo Ventures, a venture capital firm that specializes in medical devices (http://www.denovovc.com/).

In 2009, Dr. Mandato was asked to deliver the prestigious Case-Coulter Distinguished Lecture (http://www.case.edu/events/coulter/coulter.html), and in this lecture he spelled out his thought process for determining whether a startup represents a good investment opportunity for his firm.  In this lecture he described how he analyzes key elements of a potential investment, including the business opportunity, management team,  market, intellectual property, regulatory factors, ROI, and the deal itself.  For example, Dr. Mandato argues that business opportunities that have the potential to disrupt the current situation, have some market validation, and are based on solid plans that reflect good thinking are most interesting to venture capitalists. Short time horizons and significant ROI are also very important.  He indicated that opportunities that legitimately offer returns of 3-5 times the investment (or more) are necessary for venture capital firms be interested. The full lecture can be found here:http://www.youtube.com/watch?v=dK6wdT1ib5Y.

Although Dr. Mandato enjoyed tremendous success before entering theWeatherhead DM program, he credits the program with expanding his thinking: "The impact on me was so dramatic in so many ways... the critical nature of what we did... it impacted me relative to the opportunities that came my way and gaveme the ability to look at things in a broader, more sweeping way."

In addition to his work with DeNovo Ventures, Dr. Joe Mandato, is also a lecturer with Stanford University and an adjunct professor with the University of San Francisco.  He also serves on a variety of boards, including The Institute of International Education, Save the Children, Axogen, Endogastric Solutions, Facet Solutions, Hansen Medical, iScience Interventional, InSound Medical, Kolis Scientific, Luminous Medical, M2 Medical and WaveTec Vision Systems, and Case Western Reserve University's Board of Trustees.

Stan Sloane’s SRA Awarded $1.5 Billion Contract from Department of Defense

Stan Sloane (DM 2003) became the president and CEO of SRA International, Inc., shortly after finishing the DM program.  Since then SRA has continued its leadership position in providing technologies and services that "solve complex problems" for a variety of clients across the globe, while making the list for ten consecutive years as one of Fortune magazine's "100 Best Companies to Work For." Most recently SRA announced a multi-award contract to provide technology and consulting services for the U.S. Special Operations Command - a contract that has an estimated value of up to $1.5 billion over the next five years.

Dr. Sloane is an expert in a variety of complex issues.  In particular, he is an outspoken advocate of strengthening U.S. Cybersecurity measures (for a video interview on the topic, see: DefenseNewsvideo).  Last year he penned a noteworthy opinion piece in BusinessWeek detailing challenges for the Obama administration's "Cybersecurity Czar" (see: BusinessWeek article). 

According to Dr. Sloane, the Weatherhead DM program helped sharpen the analytical skills that help him deal with complex problems.  He indicated that the program "made a fundamental change on my way of thinking - the applied research; the way you look at data; the way you analyze data is different.  Corporations often make decisions based on erroneous or inadequate or incomplete data. They do so because they don't have the depth of analytical thinking.  They give anecdotal data a cursory look and commit."

Dr. Stanton Sloane was an executive with Lockheed Martin Corporation before joining SRA. In addition to his Weatherhead DM degree, Dr. Sloane holds a bachelor's degree in Professional Studies (Aeronautics) from Barry University and a master's degree in Human Resources Management from Pepperdine University,

Todd Creasy and Mike Stull Identify Ways for Managers to Improve M&A Outcomes

Mergers and Acquisitions (M&As) are tough.  It seems they rarely realize their potential, and both the academic literature and business press are filled with stories of organizations that fail to achieve the returns they expected from M&As.  The academic literature has recently emphasized the way incongruent cultures of the two merging firms may be responsible for many common M&A problems.  If two companies have much different organizational cultures, then there may be problems.  The question then becomes - what can managers do about it? Actionable research into improving M&A outcomes on a cultural level is sparse.

Todd Creasy (DM 2007) and Mike Stull (DM 2005) have begun rectifying this situation with their study of employees and M&As in an article that was recently published in the Journal of General Management. Working with Case Western faculty Simon Peck, these two DM graduates surveyed employees that have recently experienced M&As in an effort to investigate how managers might improve their job satisfaction and their organizational citizenship in the wake of an M&A.  In addition to other findings, a key element of M&A success appears to involve the notion of "procedural justice." As Creasy, Stull, and Peck indicate:  "Management should make certain that decisions are fair and equitable to all parties, communicated overtly and honestly and are open to questions." According to their findings, procedural justice directly encourages corporate citizenship, and also encourages employees to identify with the newly merged organization and helps send a message to these employees that the newly merged organization is there to support them.

The article was based on Dr. Creasy's quantitative research he pursued in the third year of the DM program. Reflecting on the program, Dr. Creasy indicates that the DM program really equipped him with the tools to tackle such research: "The experience itself was wonderful... world-class education on how to really perform research, really consume research and make sense of it... Once you begin to read theories and understand them, you begin to look at situations through these lenses... it makes your thinking, your conversation, and your work so much more robust."

After completing the DM program, Dr. Todd Creasy (left above) hascontinued his consulting work and is now a full-time faculty member with the Western Kentucky University.  Dr. Michael Stull (right below) was Dr. Creasy's methods advisor in the DM program, and Dr. Stull is a member of California State University San Bernardino's faculty.

The article is titled "Understanding employee level dynamics within the merger and acquisition process," and was published in Volume 35 (Winter 2009-2010) of the Journal of General Management:http://www.braybrooke.co.uk/dynamic/viewarticle.php?articleid=181.

Reflections of a Graduating Doctor of Management

The Doctor of Management (DM) process begins with the recruiting and/or screening of experienced executives who have a diversity of interests in achieving an advanced education in the field of management.  The primary premise for the program curriculum is to close the gap between scholarly theory and practical management knowledge.  The program takes a very interesting approach toward bringing practicing executives into the world of scholarly research and then back again into practical applications.  Through monthly residencies of two-to-four days, DM candidates absorb scholarly knowledge in two directions: First through a series of seminars covering a diversity of subjects from the abstract (e.g., philosophy, ethics, culture and leadership compassion) to the factual (e.g., the industrial revolution, political influences, and economic indicators); and second, the candidates attend a separate series of seminars aimed at building from the ground up a working knowledge of theoretical foundations and research methodologies. 

Through the abstract to factual seminars, I learned several important lessons.  The program's selection of topical journal articles and books opened my eyes to an abundance of deep and broad scholarly thinking that goes well beyond any prior experiences.  With the tools available through the internet today, I found that almost any subject interest is searchable and accessible to anyone willing to pay for the access rights.  In simple terms,  even with a bachelors and two masters degrees under my belt, the availability of scholarly knowledge and theory that was made available to me was several orders of magnitude beyond anything I had previously experienced.  The ability to search and access the most advanced studies on any subject of interest is a learning experience that I will utilize the rest of my life.

From the program's research processes direction, I was driven to experience first-hand the challenges and methodological rigor associated with developing a research question, conceptual model, and developing and conducting both a qualitative and quantitative study applying survey instruments and structural equation modeling methods.  I can think of no better way of learning the challenges of developing scholarly works than by personally struggling through these methods and being held to rigorously high standards similar to other doctorate program.  Through this challenging learning experience, not only have I developed the basic skills to create scholarly work, but more importantly, the ability to discern good scholarly work from bad and to confidently challenge works deemed inferior. 

Overall, the DM program is all that I wanted and more.  The daily exposure to Case Western professors, who are some of the top scholars in their fields, was a phenomenal personal experience.  The interactions and discussions among professors and DM cohorts that occurred during each seminar was invaluable and leaves me at the conclusion of the program to want more.  As for recommendations for improvement, I am left wondering if the difficulties I experienced at selecting a subject, developing a conceptual model and identifying an appropriate advisor, couldn't have been better facilitated by the program directors.  In the end, I believe I would have made more timely progress if I had chosen a research subject in which I had extensive practical experience.  Because I did not choose wisely, I found myself behind those that were working in a field they already knew well- even without the theoretical foundations that they absorbed later in the process.  For someone who had absolutely no prior research experience, choosing an advisor and knowing how to use him or her was a frustrating experience that I believe could have been better facilitated by the faculty.  As I found out too late, the timely selection, acceptance, and understanding of the interactive processes associated with an advisor is critical to the timely completion of almost all of the necessary activities leading to program completion.  With all that said I am deeply grateful for all the help and professional conduct by program leaders and am completely satisfied with both the efforts demanded and results experienced.

Don E. Teague (DM 2010) has over 27 years of production operations experience leading employees in the design, manufacturing and logistics support of military and commercial aerospace products.  During his career, Mr. Teague has implemented best manufacturing practices, business processes, Lean initiatives and employee involvement teams across multiple production programs and manufacturing sites.   

DM 'Intentional Change' Group Building an Impressive Body of Work

The DM program is a source of important research. As most scholars know, research in a field builds when a series of studies develop new insights about a theme. DMs have done just that with a key element of my of Intentional Change Theory. As part of the theory, sustained, desired change occurs in individuals, dyads, teams, organizations, communities, countries and even globally when people emerge through a series of five discoveries. Using concepts from complexity theory, the key is the movement between two stranger attractors, the Positive and Negative Emotional Attractors.

The Positive Emotional Attractor (PEA) is functioning in the Parasympathetic Nervous System (PNS). In this state, people are cognitive, perceptually and emotionally open and at a level of their maximum functioning. It also allows for neurogenesis (growth of new neurons throughout adult hood).  In this state, the human body can rebuild itself-it is the only known antidote to the ravages of chronic stress. In contrast, when experiencing chronic stress, a person is embedded in the Sympathetic Nervous System (SNS) continuously and pulled into the Negative Emotional Attractor (NEA). In this state, a person is cognitive, perceptually and emotionally impaired, has a diminished immune functioning, and is generally exhausting their tissues and cells. The chronic stress is the buildup of almost perpetual annoying daily stress. Because of the emotional contagion emerging from mirror neurons and the speed of such neural processes, the mood and relationships of a leaders invoke either the PNS or the SNS in those around them, whether they know it or not.

Terry Brizz (DM 2003) showed that Catholic Pastor priests who showed more emotional and social intelligence (i.e., able to build better resonant relationships) created more parishioner satisfaction and mission effectiveness than others. They did not generate more Mass attendance or increased donations. Several years later, Ray Massa (DM 2008)showed that effective financial service executives built resonant relationship with their key staff as compared to dissonant relationships of their less effective peers. Then he showed that the emotional and social intelligence competencies they show (as seen by other around them) predicts effectiveness of their regions-and cognitive intelligence and personality traits did not.

Meanwhile, a key element of the PEA is a shared vision. In the NEA, in teams and organizations, vision either does not exist, is not shared, or is talked about less than goals, threats, and dangers. Byron Clayton (DM 2009) showed that mergers and acquisitions were more successful when there was a shared vision, and it was the most potent predictor of the success of these ventures. Then Kathy Overbeke (DM 2010)showed that daughter's who become successors in family businesses versus those that lose opportunities to equally or less effective brothers have a vision for the family business. A year later, Ed Mahon (DM 2010) showed that shared vision was a powerful predictor of job and organizational engagement in IT teams. And he showed that emotional intelligence amplified this effect. These studies have been presented at academic conferences and have either been published, accepted for publication, or are in the process of being rewritten for submission.

In studies underway, John Neff (DM 2010) is looking at shared vision as a key indicator of success of family businesses. Kathy Buse (DM 2011) is predicting that personal vision is key to retention of women in engineering careers. Meanwhile, Joann Quinn (DM 2012) is examining the degree of resonance as it effects leadership effectiveness in health care and Linda Pittenger (DM 2012) is looking at a similar dynamic but in IT. In each of their studies, they are seeking to show differences between outstanding individual contributors (physicians or programmers) and their managers.

Supporting, encouraging, and at times provoking each other, the DMs are building a literature that makes scholarly contributions AND has practical significance to leadership and organizational effectiveness.  We do it by getting folks to help each other and participate in study groups. The study groups are combinations of DM and PhD students working on understanding and studying related topics. All of the above people have been involved in the Intentional Change Study Group or it's forerunner, the Coaching Study Group. It is exciting for me to help and guide these doctoral students, and continue our relationship after they graduate. With them and through them, research is occurring that would not be done or would be done at glacial speeds.

Richard Boyatzis is a Professor in the Departments of Organizational Behavior, Psychology, and Cognitive Science, and is the H.R. Horvitz Chair of Family Business.  Professor Boyatzis has been a key leader of the DM program since its inception.