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One reason why Ely Dahan left his corporate career to become a business professor was to answer a question that had been troubling him for years.
“A lot of companies were coming up with products that they had put effort and money into but that weren’t panning out, and that bothered me,” he explains. “I just couldn’t understand how a company could spend millions of dollars on a product that had no chance of success.”
Prof Dahan (pictured below) – assistant professor of marketing at UCLA Anderson School of Management in the US – decided to explore this issue when he moved into academia. Yet his experience as a business practitioner remains a powerful guiding force in his academic research and his teaching.
His past business experience is varied and includes working in the computer industry as national product manager for WR Grace and NEC Information Systems. In 1984 he founded the Entré Computer Centre of Baltimore, a computer networking company that was acquired in 1993. Today, he consults to companies in the pharmaceuticals, consumer and durable goods industries. As a professor, he focuses his teaching and research on new product development, web-based market research, the economics of cost reduction and mass customisation.
Prof Dahan also looks at what he sees as the other main strand of product development: how ideas are generated. “That process is not purely based on market research,” he says. “A lot of it is based on creativity and on understanding the constraints of the company, the technology and the marketplace.”
What really fascinates Prof Dahan, however, is how the very human elements of business decision-making can cause a company to take a wrong turn, particularly as a result of the “false consensus” phenomenon – the tendency of most people to project their way of thinking on to others.
He is now working on a testing method that aggregates the collective choices of crowds to assess the quality and excitement around new product ideas. “You ask people what other people are going to say and reward them on how accurate they are,” he explains. “[It] will tell you what a survey would tell you, but it’s quicker, cheaper and more fun because there are prizes.”
Prof Dahan confesses he was once naïve about what was required of an academic. While studying for his MBA at Harvard Business School, he took a career development course involving psychological tests, that predicted his future accurately as an entrepreneur and academic.
“I wrote a life plan saying I’d be an entrepreneur in technology and then would migrate to academia,” he says. “But three decades ago, my vision of being a professor was that at the end of an executive career you’d put on a tweed jacket with leather arm patches and you just show up.”
The reality surprised Prof Dahan, particularly the emphasis on appearing in academic journals.
“It is very important to publish papers that wow your fellow professors in terms of their technical proficiency and their intellectual ambition – rather than just practical business decisions.”
A further change was the move into an environment where the business world tendency to be vocal about achievements is not always appreciated. “It was a culture shock. In academia, you’re supposed to be humble and not take too much credit for anything,” he says. “In business . . . you’re in competition and you have to proclaim your merits.”
Prof Dahan recognises the value of intellectual rigour. “It might seem that the ideal [business school] teacher is someone who has lived [business] and can convey their experience. I definitely value this,” he says. “But [corporate practitioners] do not perform the other key function that most business schools value, which is cutting-edge research.”
What set Prof Dahan on the path to becoming an academic was acquiring a PhD in operations, information and technology at Stanford Graduate School of Business.
“Now I walk a fine line between both worlds,” he says. “I let my business experience influence the determination of what problem is interesting and I let my academic training influence the methodology and approach that will cut muster with everyone.”
This is the second in a four-part series on entrepreneurial professors to watch. For other professors to watch, go to www.ft.com/bschool