Inside the Minds

Office of the Dean - header

Inside the Minds: Leading from the Side

A chapter by Alison Davis-Blake
Dean and Investors in Leadership Distinguished Chair in Organizational Behavior
Carlson School of Management

Leadership in a Business School
The role of the business school is to bring people together to create value for current students, alumni, and the business community. Deans are not involved in the actual front-line work of the school; they do not generally teach students, advise students, have large research programs, or create alumni events. Rather, they set an overarching idea about the school and its goals that serves to channel activities in a realistic and coherent manner. They then encourage and motivate people to create value for the institution and its constituents by implementing that overarching idea.

Deans of a business school work with two very different types of students. The business school, at least at the Carlson School of Management at the University of Minnesota, is one of the few schools on a campus that has a very large undergraduate population as well as a large and differentiated graduate population. These populations have different needs, are in different stages of life, pay different amounts for their educations, tap different kinds of resources to pay for their educations, and have different expectations of the school and its dean. As a result, the dean of a business school must think about serving those different audiences well. That consideration involves allocating faculty, time, and resources across the different constituents, all of which tend to be fairly demanding of the educational process.

Vision for the School
The fundamental purpose of the business school is threefold. Business schools create human capital like every unit on campus; in other words, business schools help people expand their skills and knowledge to become more productive and better compensated in the workforce. Second, business schools create social capital, which is the relationships people have that help them get work done in every arena and in business in particular.

The school’s outreach and alumni efforts focus on creating social capital by helping people make connections. And third, business schools create and disseminate intellectual capital by developing new knowledge and innovations. These three areas are quite distinct yet equally important, and they demand different skills. Deans must constantly think about developing all three kinds of capital.

Over the next few years, we have several critical goals. First, we must preserve and enhance our ability to create intellectual capital. We are currently facing the retirement of about a third of our faculty over the next five years, which offers us the opportunity for significant faculty renewal as well as for hiring faculty who take our research portfolio in new and important directions.

Second, we have a strong commitment to enhancing our undergraduate program, both through the creation of a new facility scheduled to open in 2008 and through significant enhancements to our curriculum and student services. When our undergraduate building is completed, we will have the premier facility in the country dedicated to undergraduate business education. We are committed to ensuring that our curriculum and student services are of the same standard.

A third goal is one that every business school dean struggles with: the multifaceted M.B.A. program. Unlike, say, a master’s degree in sociology, an M.B.A. is not a single entity. It is a full-time M.B.A., a weekend M.B.A., an evening M.B.A., an M.B.A. offered with international partners in locations around the globe, and often an online M.B.A. Balancing these various offerings, including size and investment in each, can be a challenge. Add in lifelong learning and executive education opportunities, and it becomes increasingly challenging to appropriately position the M.B.A. offerings in a marketplace that is increasingly fragmented.

Managing the School
The fundamental difference between managing a business school and managing most other businesses is the presence of faculty governance. No other industry has front-line professionals who make important decisions in the organization without some form of command and control. But in education, the critical decisions are subject to consent and vote of the faculty. As a result, deans do not govern from the top; they govern from the side, and they must work collaboratively with faculty to get things accomplished. This is a difficult concept for most practitioners of business to comprehend, even though the business environment itself has become more collaborative and inclusive throughout the past twenty years. Today’s chief executive officer talks much more about “influencing” than “controlling.” That’s always been the case in a university setting. However, at the end of the day, today’s chief executive officer can take critical actions without seeking formal consent from front-line professionals.

A second important difference between education and other fields is that while most business entities have multiple stakeholders, there is typically a very clear pecking order among those stakeholders. For example, shareholders are critical, bankers and other entities who grant credit and issue debt are critical, and employees are generally lower on the pecking order (whether that be right or wrong). The pecking order in a university is less clear; it is not possible to pick out a group of stakeholders as premier, nor would it be wise to try to do so.

Deans all have their own approach to achieving consensus and cooperation. In my college, I have organized various portfolios of activities (such as the master’s program, the undergraduate program, the faculty and research infrastructure including the doctoral program, and international partnerships and programs), and I work most closely with the heads of these portfolios. In addition, there are non-academic portfolios, including external relations (encompassing everything from development to corporate relations), technology infrastructure, facilities, and finance. The head of each of these portfolios is responsible for developing and implementing appropriate faculty consultation and governance processes for the portfolio. In some areas, such as curriculum development, those processes are complex and extensive. In other areas, such as operations, they are more streamlined and focused. I also have a special assistant who helps me organize my deanship and assists with strategic planning.

In addition, most business school deans work closely with their provost, or formal boss, as well as with other deans in the university. Most also work closely with the heads of central support units including technology, human resources, legal services, and student services. All of these central services offer experience and expertise from which sub-units within the business school can benefit.

In general, as deans consider their management style, they should be very honest with themselves about who they are, their strengths and limitations, and how they like to do business. The best way to successfully manage a business school deanship is to begin with self-knowledge and build a leadership and management style from that base. Emulate deans you admire, but do not try to be somebody else. For instance, a dean I admire greatly is very informal and manages by walking the halls and having impromptu conversations; by contrast, I manage best through meetings and by communicating in formal and organized settings using an agenda to help structure the conversation. Of course, the dean I admire has meetings, and I have impromptu conversations, but each of us leads with our strengths and organizes our day around the kind of interaction that helps us be most effective. Trying to copy someone else’s style would only hamstring my efforts. I’ll never forget the very wise counsel given to me by an outgoing department chair when I assumed his position several years ago: “I did this job my way, now you do it yours.” It was very freeing advice that I reflect on often.

Benchmarking
Different schools use different benchmarking systems, and most are affected by the particular history of the institution. At my university, the school has historically measured success by national rankings of the full-time M.B.A. program, primarily U.S. News & World Report and BusinessWeek rankings. While these rankings are useful—prospective students and recruiters use them routinely—they are generally not considered to be true measures of quality and academic success. However, I do think deans should recognize the impact of the rankings and try to influence through legitimate means the underlying metrics that feed those rankings. For instance, schools should make sure they have the best possible test scores.

Deans should not become confused and feel that national rankings are measurements of achieving goals. Rather, deans should outline goals for the school and measure achievements directly. For example, one of my school’s goals is to create human capital. We can measure this by looking at job placement statistics: how long does it take our students to get a job, how much do they get paid at their job, and how does their career accelerate after the first job upon graduation? Another goal for the school is creating intellectual capital, which is a little more difficult to measure. So, we look at the faculty’s publications in peer-reviewed journals (particularly the top journals), citations given, academic awards earned, and other indicators of academic excellence and impact.

Challenges for Deans
One challenge business school deans face is the number of constituents involved in day-to-day and long-term operations. Business school deans have a tremendous number of constituents—more, I believe, than deans of other academic units. In great part, this is due to the types of academic programs present at business schools and the diversity of external constituencies associated with the school. Consider the dean of a school of pharmacy; the external constituencies of such a school include pharmaceutical companies, pharmacies, and pharmacists. By contrast, anyone in business could be an external constituent of a business school, from the smallest entrepreneurs to the largest Fortune 500 companies in every possible industry. In addition, the diverse student body of the business school becomes diverse alumni and, indeed, often some of the wealthier alumni. Having many wealthy alumni means there are typically numerous, very diverse parties on campus who are interested in partnering with the business school.

The challenge associated with having such a large and diverse constituency is that someone is always going to be at odds with the dean. As a result, business school deans really must be able to develop a vision for a large, complex enterprise and focus on working toward that vision without getting bogged down in fighting across constituencies.

Faculty represents both a challenge and a source of strength for business school deans. While some deans come from outside the university, most are from the faculty. Most began their careers as assistant professors, sometimes within the university where they then serve as dean. While faculty members may be the most prickly and critical internal constituency, they have considerable latitude and power within the school. Deans should remember that the faculty are their peers and that awareness will aid in leading effectively from the side. Deans who try to work effectively with the faculty and develop appropriate processes for collaboration and consultation can face considerable opposition from faculty members that can hamper a dean’s ability to achieve critical objectives.

Keys to Success
Achieving success as a business school dean requires, first of all, tremendous physical, intellectual, and emotional stamina. Deans also need to maintain a sense of optimism because there is large potential for mishaps in such a complex enterprise. Also important is the ability to bring people together to collaborate and create value.

To keep their edge, business school deans need to realize that there are vast resources at the university outside the business school itself, including alumni. This realization is the flip side of balancing multiple constituencies; these same challenges can provide support and assistance when necessary.

Feedback from faculty, students, and other constituencies is also important to a successful deanship. Each of these groups represents stakeholders in the school, and each has valuable insights to offer. Some are easier to tap than others. Students, for instance, easily provide feedback through classroom interaction, academic advising, and career planning. It can be more difficult to get feedback from alumni, though regular alumni surveys and alumni events can create opportunities for alumni to provide insight and support to the dean.

Ironically, faculty members are one of the most difficult groups from which to obtain feedback. In general, the tenured faculty members are the ones who provide the greatest amount of feedback. Of the 100 tenured and tenure-track faculty members in my school, I hear regularly from three or four of them. If I want to know what others are thinking, I need to seek them out or create forums where we can interact effectively. Most faculty will not walk into my office and start up an unstructured conversation. While faculty satisfaction surveys can provide some limited insights into what faculty are thinking and feeling, I find there is no substitute for regular conversation with faculty members, one on one, in small groups, and in larger forums such as regular faculty retreats.

The most important thing a dean can do in interacting with every constituency, both inside and outside of the school, is to treat other people the way they want to be treated. Deans must show respect for other people, recognize their desire to contribute to the institution, and honor the good they do. Even if a dean is not in agreement with the particular way in which someone wants to do good, the dean must recognize and honor the nobility of that person’s intent.

The Future of Business School Deaning
Being dean of a business school has become a more responsible, complex, and risky undertaking than it was ten years ago because business schools require more money to operate and national rankings have become inordinately important. It is the role of the dean to raise both the necessary funds and the high-profile rankings. In addition, the business school product line (part-time, online, and traditional degrees) has become much more differentiated and complex. As a result, the average life span of a business school dean is not long. It is not uncommon for deans to leave their positions after only two or three years, which is too short a timeline to create significant accomplishments in an academic setting.

It is difficult to predict how these changes will continue to evolve. Hopefully, rankings will become less important and business schools will be free to focus on other parts of the school, which I believe will result in a more balanced approach to education.

Balancing the Intellectual and the Monetary
Business school deans cannot set out to weight intellectual growth against profitability. Intellectual growth is the engine of profitability, so if deans focus on fostering intellectual growth for both students and faculty, profitability will follow. Consider this: why do students choose to attend a research university rather than a less-expensive community college? They come here because they know they will learn cutting-edge information and be exposed to a world-class faculty. In short, intellectual growth is the engine that ultimately drives the tuition revenue source. Intellectual growth and profitability are fundamentally interconnected. Deans must invest in creating a research infrastructure to foster intellectual growth. At the same time, they must invest in a student support infrastructure to attract students. There is no conflict between these two interests.

Money, Money, Money
Most business schools gain the bulk of their revenue from tuition from degree-seeking students. The second biggest money-maker is fees from non-degree students in lifelong learning operations. State schools can count on some government support (although that amount is typically declining annually), but not all schools have that opportunity. In general, business schools do not gain income from indirect sources such as sports activities or overhead charges associated with large grants and contracts.

The most expensive elements of operating a business school are people, as in any other service business. This expense encompasses payroll as well as consultants and contractors. Most other expenses are fairly trivial. However, the second biggest expense is probably either technology or building design/construction and maintenance.

Tuition is determined by various concerns. Public research universities often face a variety of legal constraints on tuition. For example, sometimes the state legislature sets tuition rates. Beyond legal, regulatory, and policy constraints, there are really two factors that help set the price: local market conditions (i.e., tuition of competitor schools and what potential students are willing to pay) and the financial needs of the institution.

Endowment can also be an important source of revenue. Building a school’s endowment is essentially a matter of approaching people who have an interest in the school and sharing some of its goals and then asking for support in achieving those goals. These people could be company representatives or individuals. Typically, an endowment is invested centrally by a foundation. The principle itself stays in the endowment fund, but interest is generally available to the school for ongoing or special expenses.

Endowment funds are typically used for two key purposes: student scholarships and faculty enhancement. Buildings generally are their own development project, and tuition typically covers delivery of the academic program. Endowment funds can be used to hire faculty and staff, enhance the research infrastructure and doctoral program through the purchase of databases and advanced technology, establish research laboratories, and create endowed chairs to attract big-name faculty.

Fundraising
At a business school, fundraising is all about building relationships, which is time-intensive, especially in the area of major gift cultivation. This involves learning about what the individuals and companies see as their vision for making a difference and how they see education fitting into it. It means exploring ways in which the school’s goals and interests and their goals and interests coincide.

Business school trustees or advisory boards are another resource available to the dean for financial advice, though they do not have fiduciary responsibility. Trustees assist in building the financial position of the school through their own donations and by helping raise endowment funds. The regents of the university have overall fiduciary responsibility for the entire university, but that is at such an aggregate level that it does not affect detailed day-to-day decision-making in a specific academic unit such as a business school.

In the Marketplace
The reputation of a business school, within academic circles, is built on faculty publications: how much and how often they publish, where they publish, and the quality and novelty of the publications. Outside of academic circles, reputation is generally a very social phenomena fueled in part by the media and rankings. Evening and weekend M.B.A. students focus on the experiences of other people in their company or in peer companies that have attended the program. Undergraduate students often focus on their parents’ perspectives, which are often based on their own personal experience with the institution.

To position a business school within the marketplace, it is important to be highly interconnected with the local business community so that changes in the business world immediately enter the school. To this end, we have instituted four enterprises at the M.B.A. level with a focus on financial functions, marketing and branding, consulting, and new ventures. Each of these enterprises enters into paying contracts with businesses, which students fulfill through project work that is relevant to the company. For instance, if a business needs to re-launch a product, students can help brainstorm how the company should brand that product, how it should execute the launch, whether there is intellectual property involved, and how it should be commercialized. The enterprises allow students to work on actual problems businesses face. Students have real responsibility, real risk, and plenty of direction from professional directors and faculty. The success of our enterprises has earned the Carlson School a great deal of acclaim within the business community and among the students who participate in them. We are the cutting edge of integrative, experiential learning for M.B.A. students.

Future Trends
Technology plays an increasing role in the educational process, as it does everywhere else. It affects how faculty teaches. Faculty use PowerPoint rather than blackboards, not to mention more complex technology such as real-time simulations and streaming video. Technology also affects how students learn. The pervasive use of laptops changes what can occur in the classroom, not to mention online education. Technology also affects marketing communications efforts both internally and externally. Web sites are playing an increasing role in the prospective student’s assessment of a business school as well as in the faculty recruitment process. After all, your Web site is often your first impression to external audiences. Technology permeates every area of the organization and is, therefore, mission-critical. There are a number of security issues to be on top of, as well as significant expenditures to keep up with enterprise technologies.

As the business world keeps changing, business schools must keep their fingers on the pulse of business community changes. They can do this through maintaining close connections to the business community, alumni, and prospective students. And they must bring that information in front of decision-makers within the school to be sure it informs all major decisions. This approach does not mean schools must change their curriculum and educational strategy with every new trend, but when a school sees consistent information on important trends, it should consider fine-tuning its strategy. For example, it is increasingly important for business leadership to be able to work effectively across the private, public, and non-profit sectors to create solutions to complex problems (e.g., preparing for pandemics and managing risks associated with terrorist threats). We have begun developing both a research institute and new courses designed to help our students learn how to manage with integrity across sectors.