Behavioral economist and Professor of Marketing Baba Shiv works with entrepreneurs on how to build a risk-tolerant mindset. A mindset, Shiv believes, that is crucial in times of crisis.

While we take a break and prepare for season two of If/Then, we're sharing an episode of Grit & Growth, a podcast from our partners at Stanford Seed. Here, Baba explains two types of mindsets: a fear of failure or a risk-averse mindset (type one) and a fear of missing out on opportunities mindset (type two).

“What the rational brain is good at is simply being rational ... it lists what the emotional brain has already decided to do. If you’re stuck in a risk-averse mindset, the rational brain will come in and say, 'These are the reasons why you should not innovate’ Whereas if you’re in a type two mindset, the rational brain will come in and say, 'Here are the reasons why you should take some chances.'”

And Shiv believes that taking chances, especially when your competitors are being more timid, is how leaders and companies can succeed. Shiv has seen firsthand that entrepreneurs from emerging economies are particularly innovative: “They’re facing constraints all the time and as a result are more resourceful, not in spite of their situations, but because of them.”

Shiv is the Sanwa Bank, Limited, Professor of Marketing at Stanford Graduate School of Business

Top Takeaways

1. Sleep. Without it, you’re more likely to wake up feeling risk-averse ... the antithesis to innovation.
2. Calm your mind and the rest will follow — develop a meditation, yoga, or tai chi practice to make your breath and brain more resilient to stress.
3. Pay attention to your heart—actually your heart rate variability — so you know if it’s a good time to make an important decision.
4. Innovation = creativity, multiplied by execution, divided by constraints. Don’t forget to think about your constraints in the design process.
5. Focus on building your collaborative advantage (not just competitive advantage) by developing meaningful connections with suppliers, customers, partners, even competitors. You’ll make more progress with relationships based on trust than just transactions.
6. Instill an innovative mindset throughout your company — survival is going to come from teamwork.

• On Grit & Growth, meet intrepid entrepreneurs from Africa and South Asia, hear their stories of trial and triumph, and gain insights and guidance from Stanford University faculty and global business experts on how to transform today’s challenges into tomorrow’s opportunities.
• Baba Shiv on If/Then Season One, "More Than a Feeling: The Keys to Making the Right Choice"

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It can be tempting to think one thing causes another because they happen in succession, but there’s a lot to unwrap in the idea of causality. This week, If/Then is featuring an episode from the podcast All Else Equal: Making Better Decisions. Listen as hosts and finance professors Jonathan Berk and Jules van Binsbergen explain the difference between correlation and causality, and examine cases where it is tempting to assume one thing caused another. Their guest for this episode, Guido Imbens, is a professor of Economics at Stanford Graduate School of Business, and was awarded the Nobel Prize in 2021.

All Else Equal: Making Better Decisions Podcast is a production of Stanford GSB and is produced by University FM. It is hosted by Jonathan Berk, The A.P. Giannini Professor of Finance at Stanford GSB, and Jules van Binsbergen, The Nippon Life Professor in Finance, Professor of Finance, at The Wharton School. Each episode provides insight into how to make better decisions.

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To wrap up the first season of If/Then: Business, Leadership, Society, we invited Senior Associate Dean Jesper B. Sørensen into the studio to talk about the importance of research at Stanford Graduate School of Business. He shares insights on what motivates faculty to study what they do and how it impacts practitioners across industries.

“One of the challenges of being a great researcher is that you need to move away again from this kind of day-to-day reality.… I think a gift that a lot of our faculty have is to be able to both live in that very abstract kind of world and then make it relatable to somebody who’s not living in that world,” Sørensen says.

“Sometimes putting fundamental insights into practice is really hard. One of the hallmarks of research is trying to isolate particular mechanisms through various kinds of control. Scientists live in the world where it’s a vacuum, and so we just watch the leaf fall and we can then time it and then tell you what the answer is,” Sørensen says. “And managers live in a world where the wind is blowing and there’s all these kinds of forces getting in the way.”

In his conversation with podcast host Kevin Cool, Sørensen also shares his thoughts on three episodes from If/Then’s first season.

If/Then is a podcast from Stanford Graduate School of Business that examines research findings that can help us navigate the complex issues we face in business, leadership, and society. Each episode features an interview with a Stanford GSB faculty member.

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While our team starts working on our second season, we'll still be sharing insights, bonus content, behind-the-scenes audio, and "class takeaways" from Stanford Graduate School of Business faculty throughout the summer. Stay Tuned!

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Getting to elect our leaders is certainly a privilege. Yet, even in a representative democracy, the choice that citizens have is often only as good as the candidates they have to choose from. That’s why Professor Andrew B. Hall, The Davies Family Professor of Political Economy, wonders: How do we get society’s best and brightest to participate in politics?

As a political economist at Stanford Graduate School of Business and the Stanford School of Humanities and Sciences, Hall has spent years studying what motivates people to engage in the democratic process. On this episode of If/Then: Business, Leadership, Society, he shares his insights on how we can create a system that attracts a more diverse and qualified pool of candidates to run for public office and encourages greater voter participation at the local, state, and national levels.

Key Takeaways:

• Engagement starts with incentives: Whether encouraging better candidates to run for public office or driving higher voter turnout, Hall says our democratic system must incentivize citizens to actively take part in the process.
• What's at stake?: People are more likely to participate in democratic processes when they understand how the outcome directly affects them. Hall cites how homeowners are more likely to vote on local zoning issues that impact their property values.
• Adapting new technologies thoughtfully: As new technologies emerge, Hall says it's crucial to consider how they can be harnessed to improve democratic participation and address the challenges facing our political system.

More Resources

• Andrew B. Hall, The Davies Family Professor of Political Economy
• What Kinds of Incentives Encourage Participation in Democracy? Evidence from a Massive Online Governance Experiment
• Stanford GSB Insights:
• Inside a Government Where People Are Paid to Vote
• If You Lived Here, You Might Be a Voter By Now

If/Then is a podcast from Stanford Graduate School of Business that examines research findings that can help us navigate the complex issues we face in business, leadership, and society.

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If we want to get fair outcomes, then we need to build fairness into algorithms.

Whether you’re looking for a job, a house, or a romantic partner, there’s an app for that. But as people increasingly turn to digital platforms in search of opportunity, Daniela Saban says it’s time we took a critical look at the role of algorithms, the invisible matchmakers operating behind our screens.

Saban is an Associate Professor of Operations, Information & Technology at Stanford Graduate School of Business whose research interests lie at the intersection of operations, economics, and computer science. With algorithms significantly influencing who gets matched with opportunities, she advocates for building “equity into the algorithm.”

In this episode of If/Then: Business, Leadership, Society, Saban explores how properly designed algorithms can improve the fairness and effectiveness of matching processes. If we want algorithms to work for good, then we need to make conscious choices about how we design them.

Key Takeaways:

• Algorithms shape online experiences and real-world outcomes: On dating apps, volunteer matching services, and job websites, algorithms play a crucial role in matching people with opportunities. While these matchups are facilitated in the digital domain, they impact real people in the real world.

• Algorithms are not neutral: Algorithms reflect the values and priorities of their designers and have the power to either perpetuate or mitigate inequities.

• Thoughtful algorithm design can improve outcomes for all: Saban's research demonstrates that algorithms can be optimized to create more balanced and successful matching experiences. By consciously choosing to prioritize fairness and equity in algorithm design, we can create systems that work for the good of all users.

More Resources:

• Daniela Saban, Stanford GSB faculty profile
• Stanford GSB Insights, "Cupid’s Code: Tweaking an Algorithm Can Alter the Course of Finding Love Online"
• "Improving Match Rates in Dating Markets Through Assortment Optimization" as published in Manufacturing & Service Operations Management

If/Then is a podcast from Stanford Graduate School of Business that examines research findings that can help us navigate the complex issues we face in business, leadership, and society. Each episode features an interview with a Stanford GSB faculty member.

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Unless you’re a CPA or own a large business, it might be hard to see the relevance of accounting. While it’s true that the average person doesn’t necessarily need to be able to read a corporate balance sheet, Professor Ed deHaan says a deeper understanding of accounting — a greater fluency in the “language of business” — can help everyone get a grip on their finances and make more empowered decisions for their lives.

deHaan is a professor of accounting at Stanford Graduate School of Business. In this episode of If/Then: Business, Leadership, Society, he explores why accounting principles are crucial given money's centrality across personal and professional domains, and how by proactively fostering financial literacy, we can empower a generation of informed consumers and leaders equipped to harness money as a force for good.

Key Takeaways:

• Financial education should start early: deHaan advocates for teaching middle and high school students fundamental money management skills like understanding credit, interest, and risk. By equipping youth with financial knowledge before they face major decisions, we can set them up for long-term success and empowerment.

• Approach financial choices rationally: deHaan encourages individuals to cultivate an "economic lens" when making money decisions. This means objectively weighing not just immediate costs, but opportunity costs and long-term trade-offs too. In evaluating what to do with your money, he suggests asking: Would you advise a family member to do the same thing with theirs?

• Financial institutions have a systematic advantage: deHaan warns that financial service providers, like casinos, inherently have the upper hand over consumers. Lack of transparency and human biases like overconfidence often lead to predictable wealth transfers from individuals to financial institutions. Combatting this requires proactive financial education, regulatory protections, and individuals staying vigilant and informed.

More Resources:

• Ed deHaan, faculty profile
• "On a Mission to Teach the World the Basics of Personal Finance"
• "The Hidden Costs of Clicking the “Buy Now, Pay Later” Button"
• "Retail Investors Are Making Simple — Yet Costly — Mistakes When Trading Corporate Bonds"

If/Then is a podcast from Stanford Graduate School of Business that examines research findings that can help us navigate the complex issues we face in business, leadership, and society. Each episode features an interview with a Stanford GSB faculty member.

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If we create good institutions, then we can live up to our good intentions.

Knowing and articulating our values is essential. But when the metaphorical Siren’s song fills the air, is knowing our values enough to ensure that we live by them?

According to Ken Shotts, a professor of political economy at Stanford Graduate School of Business, having stated values is just expressing aims not necessarily actualizing them through concrete policies and practices. “We need those binding institutions to help us live up to those intentions,” Shotts says.

From incentive structures within organizations to regulatory bodies, laws, and civic organizations in society at large, Shotts explains how carefully designed institutions can ensure that we don’t just espouse good intentions, but that we actually live up to them.

Key Takeaways:

• Good intentions aren’t enough: While defining our values is essential, we need binding institutions to ensure those values are upheld at the personal level, organizational level, and in society at large.

• Keeping businesses on track: At an organizational level, key "institutions" include tangible incentive structures like compensation, promotion criteria, monitoring processes, and cultural norms around praiseworthy and unacceptable behavior.

• Keeping society on track: On a broader scale, societal institutions like regulations, laws, and civic groups provide crucial checks and balances to channel business activities toward positive societal impact beyond just profits.

More Resources:

• Ken Shotts is The David S. and Ann M. Barlow Professor of Political Economy.
• Ken Shotts, Stanford GSB Voices profile
• Leading With Values, by Ken Shotts and Neil Malhotra
• Ken Shotts on Think Fast, Talk Smart – Leadership and Ethics: How to Communicate Your Core Values

If/Then is a podcast from Stanford Graduate School of Business that examines research findings that can help us navigate the complex issues we face in business, leadership, and society. Each episode features an interview with a Stanford GSB faculty member.

Find out more about If/Then.

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