Business schools not only need to sensitize their current students to the full range of their future responsibilities, but they should work with practicing professionals on their continuing education...
Paul Danos is dean of the Tuck School of Business at Dartmouth.
For the past three years, employment statistics have hit an all-time high here at Tuck. At top business schools across the country, these statistics usually reflect business optimism—at least in the sectors that hire our graduates. The stock market, too, during a four-year period, has been quite positive. Again, this can normally be viewed as a reflection of forward-looking optimism.
But most economic prognosticators see a continuing dull economy indeed, and the last 12 months of macro-economic data reinforce their gloom. I believe that businesses are hiring young leaders from top MBA programs because of an optimism based on real business prospects and capabilities. These include the desire to build and expand, along with the notion that there will be increased political and policy hostility and deadlock.
This presidential campaign provides a stark contrast on the business-friendliness scale with perceived end points in terms of regulatory and tax burdens being far apart. Uncertainty in the prospects for the government's level of business-friendliness blunts planning for growth, and even though business leaders individually see great prospects, they are held back by the real possibility of more oppressive government policies.
Co-author Paul Danos is dean of the Tuck School of Business at Dartmouth College
There was a time when a student could graduate from business school with the basic MBA tool kit and knowledge about a single industry or job function and be reasonably confident that he or she was well positioned to launch a career. But now, with the constant stream of data, news and opinions that needs to be sorted through, having a depth of knowledge is no longer enough. Today, mastery of business requires the ability to filter and synthesize information from multiple sources in order to make effective business decisions.
In the mid-1990′s, when use of the Internet was growing by leaps and bounds at colleges, many business school faculty noticed a shift in the way information was being gathered and processed. Students, for the first time, had access to high-speed Internet connections and a wealth of information that made the computer lab an extension of the library. Textbooks, which for generations served as the definitive study reference, became just one of a vast array of information sources.
In hindsight, we can now see that a large-scale adaptation was taking place. When faced with information overload, students—and businesses—became more nimble at sourcing, sorting, analyzing and applying data to solve problems. Eventually, business schools caught on, in large part because the market (employers) told them that their graduates needed to come equipped with more agile information integration skills. Our schools, The Tuck School at Dartmouth and the University of San Diego’s School of Business, are among many programs that revised curricula and innovated to address these issues.
Business schools also recognize that their screening of candidates needs to adapt to reflect these changes. It is no longer enough just to test for quantitative, verbal, and writing skills; schools realize that they also need to understand how well applicants synthesize information to solve problems.
We are pleased to see that the Graduate Management Admissions Council has worked with business schools to change the way these new skills are measured. The Council surveyed 740 business school faculty members and identified specific questions that reveal how well students can use different data sources to analyze information and identify relationships to solve interrelated problems.
The result: On June 5, graduate business schools will welcome the Next Generation Graduate Management Admissions Test (GMAT) with a new section called Integrated Reasoning. The older version of the test, which includes two 75-minute sections—one quantitative and one verbal, had two separately scored 30-minute essay questions. One of these essays will be replaced by the Integrated Reasoning section. The Graduate Management Admissions Council will report Integrated Reasoning scores separately on a one-to-eight scale that, like the essay question, will not be included in the total GMAT score.
Schools, like students and businesses, are constantly adapting to the proliferation of information. When considering a large number of applicants for a limited number of seats, we too must sort through mounds of data to try to determine which candidates are the best fit. We...
...Tuck's Research-to-Practice Seminars arose three years ago out of Tuck's most recent strategic review process, Tuck 2012. "One of the themes of that review was to increase students' access to the thinking and knowledge of faculty," says senior associate dean Bob Hansen. "We were looking for ways to get students close to the research that faculty do when they are not in the classroom."
As with most business schools, the majority of high-level faculty research is largely invisible to students. While Tuck has long provided students with opportunities to assist in research-related activities and take part in independent studies, their reach has been limited. At the same time, says Hansen, actually doing research may not be the best way to expose students to the way research is done and how it is applied in a practical sense—especially for the majority of MBA students who will put their education into practice once they graduate. "Our students are not going out to do this kind of research," says Hansen. "That's why we came up with this format."
"If there is one thing the business world has learned over the past few years, it's that we may have taken a few too many things for granted."
"We wanted a way for our faculty to share with students not only best practices but also their approach to creating knowledge," adds Dean Paul Danos. "One should continuously inform the other. At Tuck, our research faculty teach a high percentage of courses, and we just wanted one more dimension to keep the research-and-teaching linkage together."'...
Dean Paul Danos is the author, US News & World Report, February 24, 2012
Paul Danos is dean of the Tuck School of Business at Dartmouth.
There have been innumerable references to ethical lapses among MBA degree holders during the financial crisis of the last few years and understandably so. I believe that what irks many people in retrospect is the fact that the rewards and punishments of the major players did not seem to be commensurate with their roles in the fiasco. Some attribute the disaster to unbridled greed run amok among the financiers, and others put the responsibility on flawed public policy or inadequate regulatory oversight.
No matter who is ultimately to blame, lessons for anyone who purports to be educating leaders abound, and because so many of the bankers involved had MBA degrees, business schools must analyze the whole series of causes and effects, and try to draw conclusions about appropriate modifications to their own programs.
In light of the financial meltdown, I believe that MBA programs would better prepare their students if they could answer "yes" to the following three questions:
1. Are students exposed to the fundamentals of ethics and to cases of ethics violations from the real world? I would guess that most top schools give such exposure, and many schools have made ethics and social responsibility required coverage. This approach would address some of the issues around the appropriateness of reward structures and the morality issues related to the growing disparity in compensation within and across major organizations.
When I view the economic prospects through my business school lens, I am encouraged, as opposed to the pessimism engendered by the reading of most professional economists' forecasts. If one believes in rational employment markets, last summer's strong demand for top MBA graduates should be an occasion for optimism. Last summer 97 percent of Tuck's 2011 graduates had firm employment offers within three months of graduation and total compensation increased 7 percent over 2010. As an indication of next summer's demand 85 percent of the class of 2012 had job offers coming from their 2011 summer internships...
Oct. 11 (Bloomberg) -- Paul Danos, dean of the Tuck School of Business at Dartmouth College, talks about the demand for positions at the school, the quality of Tuck applicants and the success of graduates. Tonight at 7 p.m. New York time, Bloomberg Television and the Washington Post, in partnership with WBIN-TV and host Dartmouth College, will present the first debate of the 2012 campaign focused exclusively on the economy. Charlie Rose moderates. He'll be joined by Washington Post political correspondent Karen Tumulty and Bloomberg White House correspondent Julianna Goldman. Danos speaks on Bloomberg Television's "InBusiness with Margaret Brennan."
In a packed Leede Arena at the Tuck Investiture Ceremony, Immelt told the MBA candidates to think globally, have the courage to make difficult decisions, be problem solvers, connect with people, and understand context...
external focus, imagination and creativity, decisiveness, clear thinking
Article of The Darmouth, July 15, 2011
The Tuck School of Business has joined with four business schools from around the world to create a collaborative aimed at examining current business issues that affect society, such as healthcare, corporate management and sustainable development, according to Tuck dean Paul Danos...
VIEWPOINT: Paul Danos is Dean of Tuck School of Business at Dartmouth. Here he explains why ethics and responsibility are key to great leadership and how they can be enhanced and developed...
One of the most valuable assets of a top-ranked business school is its alumni network. It’s a major consideration by applicants in choosing an MBA program, and it’s a significant sign of a school’s true brand strength in the marketplace.
But it’s also something that is hard to measure. There is no available metric that will let you know how often the alumni network at a school gets current students internships or jobs. There is no measurement to find out how often an alum returns the call of a student for advice, mentorship, or networking.
There is, however, one very telling number to judge the strength of a school’s alumni network: the percentage of alumni who give money to a school every year. As Paul Danos, dean of Dartmouth’s Tuck School of Business, puts it, a school’s annual alumni giving rate is “a long-term satisfaction index.”
Alumni wouldn’t be handing over money to a school especially if they felt no affinity toward the institution or were unsatisfied with the MBA experience they received. So high alumni giving rates might well be the single best proxy to assess both the satisfaction of MBAs with an institution as well as the ultimate value of the network a graduate inherits at commencement.
Which business schools do exceptionally well on this index? Year in and year out, the Tuck School beats every other institution in the world when it comes to annual alumni giving. Last year, for example, some 67% of Tuck’s 8,976 living MBAs wrote checks to the school. That is an extraordinary level of support at a time when the average rate of giving for a top-20 business school is roughly 20%.
“That is like the four-minute mile,” boasts Danos. “The appreciation for Tuck grows as our graduates go out and speak to others about their experiences. That long-term satisfaction has to be high given the unheard of rate of giving. I do think it’s a long-term endorsement of the general way we educate.”
This year, Tuck will reach a new milestone, eclipsing the highest participation rate in its history. With a May 31st deadline approaching for its annual giving campaign, more than 68% of its alums have already send in their checks, beating the 67.5% peak reached in 2008. Danos is hopeful that the school might very well hit 70% this year.
And after Tuck? It’s Yale University’s School of Management, which last year saw 46% of its MBA alums reach into their pockets to donate money to the school; the University of Virginia’s Darden School, the beneficiary of a 43% alumni giving rate last year, and the Stanford Graduate School of Business, which reported a 41% participation rate by MBA alums....
Paul Danos, dean of Dartmouth’s Tuck School of Business for the past 16 years, can’t seem to get enough. The longest-serving B-school dean of any top-20 school has signed up for his fifth four-year term.
Jokes Danos: “I’m getting into the Guinness Book of Records, going on 16 plus four. Time flies.”
In an era when the average tenure of a B-school dean is less than five years, the 65-year-old Danos has astutely led Tuck not merely through a time of dramatic change at the school, but also through numerous market booms and busts, fads and trends, and serious criticism of the degree and the people who have it.
It is easy to underestimate the impact of an individual on an institution, particularly a dean whose impracticable job has accurately been described as one of “herding cats.” Yet over the past 16 years, Danos has welcomed to the school and ultimately sent into the world more than 40 percent of Tuck’s nearly 9,000 living alumni. He has recruited and hired roughly 85% of the school’s 50 professors. Danos also has raised more than $250 million to help foot the bill for, among other things, a 50% increase in the size of the faculty and vast improvements in the school’s facilities so that half of Tuck’s 11 connected buildings are either new or completely renovated.
PRESERVING TUCK’S CLOSE-KNIT CULTURE OF AFFECTION AND COLLABORATION
Yet, he also has been able to preserve and build upon Tuck’s unique close-knit culture of affection and collaboration...
May 13 (Washing Post with Bloomberg) -- Paul Danos, dean of the Tuck School of Business at Darmouth College, talks about his tenure at the school and the placement and success of Tuck graduates. Danos was reappointed to serve a fifth four-year term as dean on May 11. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." David Blanchflower, a Dartmouth professor and former policy maker at the Bank of England, also speaks. (Source: Bloomberg) (Bloomberg)
...This is the view of Paul Danos, dean of Tuck business school in the US.
In terms of curriculum, he says, there has been a massive convergence in recent years. “If you went to a business school in India, America, Europe or Japan you would find that they teach fundamentally the same topics,” he says. There’s no way that an American school would teach only American case studies, and when they are studying entrepreneurialism in Chinese schools they look at Silicon Valley. “Schools want to look at the gold standard, and they don’t care if that is American, Chinese or German.” The fierce market in business schools, plus the global marketplace for faculty, means that if Ghemawat’s ideas are adopted, they will quickly be adopted everywhere.
What you should look for in a good school, then, is not the curriculum, but the way that it is taught. And here, the old schools have a huge advantage – they are rich enough to teach well. Small-group and one-to-one teaching are expensive and “unless you have a ton of money behind you it is hard to set up that sort of school,” Danos says. American schools have been raising money for a hundred years – they run on endowments and fund-raising, they get a lot of money from alumni.
It would take decades for schools in India and China, say, to reach the same level. And even then, would it be worth “duplicating something that is already there” in America and Europe? Even if in twenty years time the American economy is no longer the world’s biggest, so what? “Look at how small Switzerland is, and at the power of Swiss banking,” says Danos. Just because India or China has a growing economy, it doesn’t follow that it is the best place in the world to go for your business education. In fact, we are more likely to see movement in the opposite direction. Newness has sparkle, but oldness has its attractions too. “Globalisation,” says Danos, “goes both ways.”
Click here for the article of Paul Danos on Reuters, March 11, 2009
"Paul Danos is the dean of the Tuck School of Business at Dartmouth College. The views expressed are his own" (Reuters Great Debate)
A major question in the government response to the banking crisis is choosing between the “evils” of nationalization of banks that would however provide stability, versus the “benefits” of saving of the private banks that would innovate and compete in a market system.
As the dean of the Tuck School of Business I’m privileged to speak with a wide range of economists, bankers, Wall Street executives and our own students, and what I’m interested in is finding an answer somewhere in the middle ground:
* First decide what major businesses absolutely need in banking services and then set up a ‘facility’ to assure that that those prime banking services will be available. This facility would initially be owned by the government but with an explicit goal of going to full private ownership as soon as feasible.
* Make that facility a separate legal entity from private banks.
* Let the private banks operate these “franchised” facility under close scrutiny.
* Have a process by which the private banks ultimately benefit from the operations of the ‘facility’ by having them acquire an increasing ownership in them.
* Though managed by private banks after absorption, the facilities would remain legally separate.
The trick is to be able to absorb the facility into the private banks after the crisis and not along the way destroy the private banking system as we know it, which means that the private banks must seen as benefiting from the scheme. To the extent that the facility does well, the banks would benefit in that they would have the ultimate ownership; and if the facility does poorly the government would have to absorb the losses, at least in the initial stages.
If the government did set up an initial $200 billion facility it could then be leveraged to say $2 trillion in loans. The “good” facility would be available to all companies for a limited list of transactions for the duration of the crisis, with say a minimum of five years. We could then let the markets settle the bad assets issues in the private banks. Some would fail and some would survive.
After the absorption of the facility the resulting private banks would have two parts, one highly regulated that would provide on-going assurances to the business community, and one relatively unregulated that would allow innovation and society would glean whatever benefits we are supposed to get from that kind of activity.
The government would over time get compensated by the investments made by the payment for the ownership of the facilities.
Click her for the article of The Times Online, January 20, 2009.
Retailers crash, banks are bailed out, the spectre of redundancy looms large; the gloom is unremitting, it seems — but for many aspiring senior managers and finance professionals worrying about their careers or who are out of a job, post-graduate business education may offer a haven in an economic storm. When push comes to crunch, it is a great time to take an MBA.
Some American business schools also report a surge in applications. At the Tuck School of Business in Hanover, New Hampshire, Paul Danos, the Dean, expects more applicants, albeit temporarily: “There's always a short burst of applications when there's a negative event such as the financial crisis. It's not a huge percentage and it will not persist for long.”
The logic for taking an MBA in 2009 is compelling, especially if you work in management or finance and fear for your job, or are already a victim of the growing number of redundancies...
Click here for article of Shanghai Daily.com, 2008-6-18.
A THREE-HOUR deans' roundtable titled "The Future of Business Manage-ment Education in China and Around the World" was held at the China Europe International Business School Shanghai campus recently.
Hosted and moderated by Paul Danos, dean of the Tuck School of Business at Dartmouth, the graduate school of management founded in 1900, these roundtables are part of Tuck's sustained international outreach program.
The frank discussion featured five deans from CEIBS in Shanghai, the Institute Empress in Spain, Fudan Management School, Cheung Kong Graduate School of Business and the Hong Kong University of Science and Technology Business School.
"Globalization is changing business education just as surely as it has changed international business. We'd like to know how education is developing in the world and explore places that we want to learn about," Danos said.
"There is no government control on what education will become. No American model is going to be the majority model globally. It is necessary that new models are adapted. That's why I initiated the event."
Press release of Media-Newswire.com - June 5, 2008
HANOVER, N.H.-Deans from business schools in Eastern Europe, Spain, and the United States recently gathered to discuss the differences in international models of business education and the impact of globalization on their industry. The event was the latest in a series of roundtables held around the globe and organized and moderated by Paul Danos, dean of the Tuck School of Business at Dartmouth, and Santiago Iñiguez, dean of Instituto de Empressa Business School. This latest assembly was hosted by Dean Paul Garrison of the Central European University Business School in Budapest.
"Globalization is changing business education just as surely as it has changed international business," says Danos. "These roundtable discussions have been a valuable tool for comparing regional business school models and ensuring that our MBA programs reflect the realities of the modern marketplace."
Deans from more than 20 schools around the world, senior faculty members, business education reporters, education consultants, and professional development executives from top corporations have joined together for the four roundtable sessions held to date...
Paul Danos, Dean Tuck School of Business at Dartmouth
Earlier this month I participated in a wide-ranging interview for a French business publication together with Dean Bernard Ramanantsoa of the HEC School of Management and IESE Barcelona Dean Jordi Canals. I thought readers of this blog might be interested in a preview.
From the French business publication, Le MOCI - Moniteur du Commerce International
Recruiting the world’s best students is crucial for international business schools. What’s the competition like for the best students? What’s your strategy?
Among the top MBA programs there is tremendous competition for the best students. At Tuck we travel the world to talk to prospects in order to identify who could gain the most from joining our program. We identify them in a number of ways including lists of GMAT test takers and references from our alumni. Of course, the majority already know about Tuck and apply without our direct contact. We interview all applicants and we invite them to Tuck to get familiar with our special qualities. Once a student is admitted we have several events on campus and around the world that are intended to give a clear picture of what Tuck is like and the wonderful opportunities a Tuck MBA imparts.
European programs are progressing in the international rankings. How would you analyze this bright spell?
I believe that over time, our competitive realm will be more and more worldwide. For many decades going all the way back to 1900 when Tuck offered the first masters degree in business, the United States led the way in the number of top MBA programs. In the last few decades many other programs outside of the U.S. have progressed to our current situation where there are many competitive schools around the world. The U.S. market is mature in that there are many university-based programs in every region of the country, and there are many levels of quality and prestige. The real growth in MBA programs worldwide will come from outside the U.S. and there are many varieties of programs including two-year, one-year, part-time, executive, and distance. At Tuck our focus is on the two-year, full-time program.
Is recruiting great students advantageous for the alumni or only for the schools?
Alumni want their schools to be recognized for excellence and most of them believe in market forces. Therefore, they would not be pleased if their school could not successfully compete for the best. Of course, most of Tuck alumni work in major businesses around the world and they expect a certain level of quality in the students they hire. With Tuck graduates they expect ethical, well-trained, and knowledgeable leaders who are great at teamwork.
How are you preparing your students to face the new issues of globalization?
We are currently looking closely at everything we do with having a global mindset and with the skills necessary to be a leader in global businesses. We want to increase the number of cases and other materials in our courses that explicitly cover issues of globalization. We are also planning to add more opportunities for students to visit other countries for projects and for study during the program. We will make sure that our students are capable of leading organizations anywhere in the world. Tuck has been extremely strong in the financial services and strategic consulting areas, having one of the best placement records in the world in those two areas. To prepare them to be leaders in any business they chose, anywhere in the world, we make sure that our students have a comprehensive global management foundation and real depth in the global aspects of finance, strategy, and the other relevant areas of study.
Paul Danos (that’s him below) has seen a range of boom-and-bust cycles in his 12 years at the helm of Dartmouth College’s Tuck School of Business. The summer’s credit crunch threatens to mark the end of the latest boom, that enjoyed by the private-equity industry. Tuck also is home to the Center for Private Equity and Entrepreneurship. As such, Danos is particularly well situated to opine on how the private-equity industry might adapt to the changing credit environment and the prospects of M.B.A. students striving to enter the private-equity arena.
Deal Journal colleague Ron Alsop spoke with Danos for this column in today’s Wall Street Journal. Here is more of that interview:
Alsop: Do you think the summer’s credit crunch
marked a top for the private-equity industry? If so, is it changing how
Tuck prepares M.B.A. students seeking private-equity positions?
Danos: Close to 50% of Tuck students have a serious interest in finance and most of them go into investment-banking firms and corporate finance, but perhaps about 15% have their hearts set on private equity, which could include hedge funds, buyout firms and venture-capital firms. The most recent disruptions in financial markets, especially the credit crunch, will deflate the demand in buyout area first, somewhat, and, to a lesser extent, in some of the investment banking. Certainly the huge write-downs by the large banks will give them pause as they plan their recruiting year, but I am cautiously optimistic that when the smoke clears our students will do very well in most of those markets. We have found that most firms want to continue to bring in the best M.B.A. students even during in a downturn.
RA: What aspect of private equity is most in the spotlight at Tuck’s center?
Danos: I would say that the students who are interested in private equity are most interested in the participating in the buyout of public firms, which of course is an area that will be damped by the credit crisis. Also, they are very interested in merges and acquisitions in general. That activity will continue to occur among corporations for strategic reasons even as the “going private” trend cool off for a while.
PD: Any other comments on the credit and PE situation and outlook?
Danos: My guess is that the private-equity firms after a period of cool down will find ways to do their deals. After all, much of the trouble didn’t come from the huge buyout deals going sour but from a specific bubble surrounding some very risky leading practices and the financial instruments that were created for those mortgages. The reasons for “going private” are compelling in many cases and, even in tighter credit markets, many of those potential deals are still attractive and sound. I predict that hedge funds and buyout firms will be alive and kicking far into the future and, I would add, doing good for our financial markets. Of course, the government could hurt their prospects with ill-considered regulations, but even that is not that likely, in my opinion.
Paul Danos, Dean Tuck School of Business at Dartmouth
All politics may be local. But in the increasingly integrated world of business-where international markets are enmeshed and intellectual capital flows across borders -the focus is decidedly global. Whether you've just embarked on your two-year journey or are fresh off a summer internship, recognizing this new world order is critical to leveraging the full potential of your MBA.
The implications are profound and cut to the very heart of why you're here in business school. An MBA education offers unparalleled career opportunities. The most sought-after companies pay a premium for high-caliber students. But as you work toward leadership positions in those organizations, enhancing your personal global profile is as important as anything you'll learn the classroom.
Virtually every company that hires an MBA student is engaged in the global marketplace in some capacity. Achieving leadership roles in these organizations will require not only a demonstrated comfort level in cross-cultural settings, but also a willingness to go wherever the work will take you. Everything we hear from recruiters supports this. For leading business schools, career placement has become a global activity.
So what to do? Tuck, for example, already offers a number of opportunities to globalize. In addition to our Tuck offerings, there's the Tuck Global Consultancy, a global field studies program organized bythe Center for International Business that has so far placed 150 Tuck students in 70 different countries. The CIB also co-sponsors the annual Interstate Programme, which brings together MBA students at top schools in the United States and Europe to discuss transatlantic business relationships. Second-year students, in addition, have the opportunity to take part in an international exchange program with one of 17 partner MBA institutions.
But I also encourage you to be proactive in broadening your international experience. This isn't difficult at an institution like Tuck, where 37 percent of the class of 2009 comes from outside the United States. My advice is to absorb all that you can from your fellow students. Take them up on their offers to travel abroad for spring break. Expand your reading list to include international publications. And learn everything you can about your future field of play.
Do you really understand, for instance, how the World Trade Organization works? Are you familiar with the EU governance structure? Why isn't Great Britain in the European monetary regime? Why did Mattel apologize for the glitches in their Chinese supply chain? Being well versed in global business and related government policies makes for more than just good conversation. It sends a strong signal to recruiters that-MBA in hand-you're ready to be productive anywhere in the world.
Dean of Tuck School Takes the Long View, October 9, 2007, Wall Street Journal.
In His Fourth Term, Danos Puts Focus On Small Seminars.
The turnover rate for deans has been accelerating at many business schools, but Dartmouth College in Hanover, New Hampshire, is clearly in no hurry to replace Paul Danos, the dean of its Tuck School of Business, the oldest graduate business school. This year, Dartmouth reappointed the 65-year-old Dr. Danos to a fourth four-year term, which will make him one of the longest-serving business-school deans. Ron Alsop interviewed him recently about his plans for Tuck, the value of faculty research, and the changing world of B-school deans. (free subscription paragraph)
To see the full article with the answers to the questions below you need to be a subscriber to the Wall Street Journal.
WSJ: What are your primary goals during your fourth term?
Dr. Danos: I am staying to see..
WSJ: How many additional professors will you need for the smaller classes and seminars?
WSJ: There has been much criticism of business schools for focusing on research with little direct relevance to the business world. Do you believe that's a fair complaint?
WSJ: From your perspective, how has the dean's job changed through the years?
WSJ: Many deans have told me they tire of all the fund-raising pressure. Has fund raising been a growing part of your job, and does it distract you from academic matters?
WSJ: More schools seem to be hiring business executives as deans these days. Do they face different challenges than academics like yourself?
WSJ: Would you consider staying for a fifth term, surpassing the 18-year tenure of one of your predecessors at Tuck? Or have you thought about retirement and life after Tuck?
The article finishes with:
"Many of these converstaions can be accessed at www.deanstalk.net, an international dean's blog."
Article from Inside Higher Ed.com, September 17, 2007.
You’d be hard pressed to find it written in most business school literature, but common wisdom says the successful M.B.A. student has five years of post-college work experience. While 26 or 27 remains the average age of entering students at many top programs, business school officials are looking to shatter the myth that there’s an age associated with the model applicant.
In a move meant to deliver that message, the Harvard Business School last week unveiled a deferred admissions program that allows applicants to be considered while they are still undergraduates. Rising college seniors who are admitted through the 2+2 program, as it is called, will enroll in Harvard’s M.B.A. program after working for two years at a company or organization that has agreed to participate.
“Our message is apply when you think you’re ready,” said Carl Kester, deputy dean for academic affairs and a professor of finance at Harvard Business School. “We are concerned that interesting and outstanding students are being fast tracked at jobs and are not considering business school until reaching a certain point in their careers. We said, ‘What if we opened up a channel to resolve that uncertainty?’ ”...
(From the same article) ...But interviews with leaders at some of the top business schools show that while officials are keeping a close eye on Harvard’s initiative, they aren’t ready to jump in quite yet. Paul Danos, dean of the Tuck School of Business at Dartmouth College, said the school isn’t looking at going toward the deferred admissions model now but may consider it in the future.
“One size won’t fit all in this case,” Danos said. “Harvard isn’t doing this out of necessity, and if Tuck did this, it would be to foster more diversity. Right now we’re not feeling pressure to expand the applicant pool, but who knows, that could change.”
Tuck has for years run a summer program for college students who want non-credit, pre-M.B.A. training. It is a feeder program for the school, which gets applications for many of the 250 students who participate.
At Tuck, the average applicant has about five years of work experience, and the distribution ranges typically from two to 10 years. While the average has come down in recent years, “it’s not doing so by much,” Danos said.
See Santiago Iniguez' thoughts on the subject in this blog "Professional Experience vs. Potential Talent in MBAs" (04 February 2007)
"...a further vector of diversity is age itself: doesn´t it enchance the learning experience to have participants with different levels of professional experience, even belonging to different generations, in order to replicate what actually happens at work in real life?..."
"MBA programmes are living educational offerings, and their entry requirements should change according to the evolution of circumstances. Maybe it’s time to reconsider the traditional view on the values of professional experience and allow more room for young, talented, participants with high potential."
Paul Danos, Dean Tuck School of Business at Dartmouth.
Earlier this month I sat down for a web video interview—stay tuned to this space for more on its launch—to make sense of the investment climate in light of the recent subprime mortgage crisis. The timing was significant. On the day we talked, the Dow Jones industrial average dropped nearly 400 points and central banks in the United States and Europe injected more than $150 billion into the financial system to keep it afloat. Here’s a partial transcript of our conversation:
Most of us thought of public markets as something that just is and always will be. Indeed, many of our financial and economic theories depend on public information about companies. But the recent wave of privatization—in part, a response to the current regulatory climate—may change how we perceive the balance between public and private. In this post-Sarbanes-Oxley era, the U.S. Securities and Exchange Commission and other regulators examine corporations with greater scrutiny, shaping both how boards monitor management and how management monitors itself. The legal penalties for violating rules have also changed. The question is whether the pendulum has swung so far to the reporting and auditing side that the publicly-traded company is now at a disadvantage.
Until recently, it appeared as though private equity firms could take almost any company private, their cheap credit a viable alternative to the vast pools of investment traditionally opened through public financing. With public markets continuing to dominate the vast amount of investment worldwide, in the future we are likely to see a blend of public and private markets. This is a good thing. A healthy private equity section of the market keeps people focused on creativity, efficiency, and stockholder returns. It is good for CEOs to feel that pressure.
But like public markets, the death of the initial public offering is also greatly exaggerated. Late ‘90s-era valuations, of course, are a thing of the past. But good companies—and good ideas—will always have buyers. This is true even when the IPO market isn’t strong, as is the case today. Major corporations have no shortage of cash on their balance sheets and will often acquire smaller competitors or those with complimentary technologies and products. One company’s growth strategy is another’s exit strategy.
Excerpts from an article of The Economist, May 10th 2007
As business schools start to teach more ethics and practical skills, enrolments are climbing again.
... Five years ago, business schools, particularly in America, came under attack from all sides...
a) Enron...b) Henry Mintzberg, a Canadian management scholar, has long claimed that the MBA was too narrowly academic and did not teach much that was of any practical use...c) Sumantra Ghoshal, of London Business School, argued that what was taught was practical, but in the wrong way...d) In an article in the Harvard Business Review in 2004, Warren Bennis and James O'Toole lamented “How Business Schools Lost Their Way”
Back in business
...Today the mood in business schools is a lot happier, and not just in America but also in other countries, which now boast more business schools and many more MBAs than ever before. Applications have recovered strongly and the salaries offered to business-school graduates are rising again, as is the share of graduates from the class of 2007 who have already secured their desired job. Tuck is now confident that it will improve on last year's best-ever placement record of 98% of students with a job offer within three months of graduation. Indeed, Paul Danos, dean of Tuck, reckons that the downturn “had nothing to do with management education” and everything to do with the economic cycle...
... By teaching ethics and becoming more practical, business schools may be going back to their roots...
When I was a full-time professor of accounting in the 1970s and 1980s, the industry was dominated by the "Big Eight" accounting firms. After a series of mergers and the 2002 Arthur Anderson collapse, we are now down to the "Big Four." And that's really a big danger.
Anyone who understands the implications of our legal system and who witnessed the end of Arthur Anderson knows that the "Big Four" could easily become the "Big Three" in a similar manner, but the truth is that such a shift would be much more damaging to our economy than most people might think. In fact, the dangers posed by this threat might just be serious enough to warrant a thoughtful attempt by policymakers to come up with a solution before a crisis hits.
Today, the Big Four accounting firms (namely Deloitte & Touche, Ernst & Young, KPMG and PricewaterhouseCoopers) do almost all of the public firm audits for the entire world. The reality is that the fifth largest global accounting firm is much, much smaller than the Big Four, so it is very unlikely that it could rapidly grow to their size.
Each of these four firms works with several hundred publicly traded companies, not just as auditors but in other functions as well. Current rules generally prohibit the same firm from serving multiple functions for a single client (so, for example, a company can't have a significant consulting job being done by its auditor) and the result is that many companies get a second firm for consulting, and perhaps even a third to handle tax issues.
If, for some reason, a company needs to find a new auditor, it may have only one other feasible choice at that point. This environment means that it is already difficult for our largest companies to retain an accounting firm that is not in some way connected to, or overlapping with, or auditing their biggest competitor. If the Big Four were to become the Big Three, finding independent auditors would, of course, be even more challenging.
In addition to the difficulties associated with maintaining independent accounting firms, there is a second serious risk of consolidation, which is the economic cost of the disruption. The problem is deeply connected to our whole reporting structure, which requires that publicly traded firms put out annual and quarterly reports audited by an independent firm.
If one of the Big Four were to go under, roughly one fourth of all publicly traded firms would be in a serious bind when it comes to meeting regulatory requirements. When Arthur Anderson collapsed, it took the market some time to deploy all of the professionals who were employed there to the other large firms, and, of course, that impact would only be bigger if one of the four remaining firms fell. Just the disruption alone would probably cost billions of dollars, in addition to the long-term structural problem.
The bottom line is that a Big Three scenario simply may not be viable in terms of our overall economy.
So, could it happen?
Given our legal system today, there is simply no way to make the Big Four accounting firms immune to collapse. Any firm can be sued for almost anything, and most firms simply don't have either the insurance or the capital to cover a billion-dollar judgment. The size of the lawsuit can be completely unrelated to the size of the original job, so an audit generating $10 million in fees could possibly produce a $2 billion lawsuit. Even in the case of Arthur Anderson, Enron was only a fraction of its total billing--certainly not big enough to lose the company over.
The Arthur Anderson case also demonstrated that a single felony indictment can start a devastating chain reaction. By law, if a firm is indicted, it can't audit governments or companies who have governmental clients. At the same time, many other clients will be scared off by the ensuing publicity. The result is a death spiral where the firm finds itself losing clients but not gaining any new ones. Arthur Anderson's conviction was ultimately overturned, but only after the firm had utterly collapsed.
This is a fundamentally risky business. That risk, combined with the potential economic cost of another Big Firm collapse, should give policymakers pause. If we're going to maintain the private system of audits the way it is now, then it seems the SEC needs to do something to create more viable firms. One approach would be to move toward a rational five-year plan designed to take us from four firms to eight firms. The largest firms could be motivated to divide into independent units, and new regulation could encourage this shift (for example, by limiting the overall percentage of any one industry that can be audited by a single firm). Other approaches could involve encouraging smaller firms to grow.
Ultimately, there is no one actor who benefits from this shift, except society as a whole. And that's why the SEC exists: to help protect our overall markets. Finding a way to spread risk across a larger number of big global accounting firms could avoid billions of dollars of economic disruption, and is at least worth a careful look.
Paul Danos, Dean Tuck School of Business at Dartmouth.
If you took a quick look at the results of November's election and began anticipating an increasingly burdensome regulatory environment for business and finance, you could probably be forgiven. After all, most politicians have traditionally divided roughly on party lines when it comes to issues like legal and regulatory policy, and the Democrats swept the table in 2006.
But three powerful pendulums are at work in the American economy, and it is a safe bet that the politicians will be more intent on preventing further erosion in our capital markets' competitive advantage than on sticking with traditional party lines.
The first pendulum is the legal environment, and this is the heaviest of the three (meaning it is slow moving and has a very, very long stroke). Discussions over legal reforms have been ongoing for years, and there have been plenty of arguments about the burdens of our legal structure. There is no question that large firms can be deeply vulnerable if even a small portion of their activities are called into question, and the generally litigious nature of our society demonstrates that the legal pendulum is near an apex--and not likely to change anytime soon. Ultimately, this pendulum is generally less influenced by what happens in Washington and more affected by the cumulative weight of decades of case law. It is rarely affected in any significant way by administrative changes.
The second pendulum, made up of financial and regulatory issues, operates on a shorter stroke and has seen a new burst of activity that started with Enron and the resulting Sarbanes-Oxley legislation. This is an area where the politicians can have an immediate impact when they want to, and it is a pendulum that is also near its apex. The U.S. Securities and Exchange Commission set the gold standard as the best regulatory body in the world. Over the course of 60-plus years, it created an orderly market that was the envy of the world.
But the pendulum has continued swinging in the same direction, and today I believe most people think Sarbanes-Oxley and some other recent developments, combined with the legal arena, are creating an oppressive regulatory regime where there are simply too many easy ways to get sued, lose your reputation, get a serious political black eye or get stuck with significant fines.
The third pendulum is the availability of viable alternatives to our country's public markets--specifically, privatization and foreign capital markets. Market conditions such as the availability of cash and the booming debt markets are allowing leveraged buyouts with less and less equity, and as a result we've seen significant growth in fund size, deal size and frequency of privatization.
In the public markets, we've also seen a steady rise in the ratio of IPOs taking place overseas, compared with here in the U.S. Overseas capital markets in places like Singapore, Shanghai and parts of Europe are now big enough, sophisticated enough and have the sufficient legal structure to attract the business that America used to dominate. And, of course, these markets know that it is in their interest to have more liberal regulatory and legal environments than we do, because it significantly enhances their appeal.
Each of the three pendulums--the legal environment, regulatory regime and the alternatives to our public markets--is at or close to an apex. The result is that some pain is going to come at a very high level, in the big numbers such as how much traffic goes through our markets as compared with the rest of the world. Now, with globalization, it is inevitable that we will lose some of our edge in a world where other countries are rich and can pick and choose which of our laws to duplicate. But the combined weight of these three pendulums is speeding up this process when we should be slowing it down instead.
This isn't going to go unnoticed by the politicians, and the realities of politics at the local level will dominate where people land on this. The pressure created by the eroding competitive advantage of the American capital markets will be felt first in places like New York City and Chicago, and its impact will quickly translate into policies being advocated by the officials who represent them (by and large, Democrats). Already, there is talk of revisiting Sarbanes-Oxley, revisiting some kind of tort reform and other proposals. Politicians that you'd never expect, like U.S. Sen. Charles Schumer, D-N.Y., or New York Gov. Eliot Spitzer, are talking about potential approaches to deregulation, because they understand that they ultimately need to protect their constituents.
No one can predict the extent of these coming pressures or how far the pendulums will swing, but if the rate of privatization continues to grow and/or the non-U.S. financial markets continue to take a larger share, we could see major changes in our public markets. When the impacts of these forces are more clearly felt, one clear path that might be taken is to aggressively cut unproductive financial regulations and to reform parts of the legal system.
So don't be entirely surprised if a coalition emerges made up of some liberal Democrats as well as some conservative Republicans, intent on making our financial and business environment more competitive by removing some of these burdens.
Via The Dartmouth. March 28th, 2007.
College President James Wright reappointed Paul Danos as dean of the Tuck School of Business, according to statements released Monday. The reappointment, which was contingent on a review process that included input from several campus entities, marks Danos' fourth consecutive term as head of Tuck.
"We are lucky that he was willing to continue to serve," Wright said. "I was involved in recruiting him in 1995. I was very pleased with the appointment -- he had taken an exceptional program and made it one of the best in the world."
The review process revolved around letters sent to administrators, faculty, students and members of the Board of Overseers at Tuck asking for an assessment of the dean. Some senior administrators at the College were also included.
"[Provost Barry Scherr] and I viewed all of the responses sent," Wright said. "We were eager to see [Danos] continue."
Danos' reappointment, extending his 12 year incumbency as dean, "exceeds the normal term," according to Wright.
Scherr said that Danos' long term is warranted because he "is extremely good at what he does."
"He really has been able to have the school build on its strengths over the years," Scherr said. "It has been moving up the national rankings quite consistently. The MBA program has stayed extremely strong, with he and his colleagues thinking constantly about the curriculum and updating what they are doing. He has recruited first-rate faculty and made the school extremely popular for students, strengthening the student body."
Most Tuck faculty members are pleased with Wright's decision to reappoint Danos, according to Andrew Bernard, professor of international economics and senior associate director of the Center for International Business.
"It is much better to have him in charge than anyone else I can think of -- I don't know anyone who is either surprised or disappointed," Bernard said.
This sentiment was echoed by some Tuck alumni.
"In my mind, Paul Danos is hands-down the best business school dean in the world, and his appointment to a fourth term is roundly welcomed by the overseers," William F. Achtmeyer Tu'81, chairman of Tuck's Board of Overseers said in a statement. "As our school continues in its second century, we look forward to supporting Paul as he cements Tuck's position at the very top of MBA programs around the world."
Danos said he is "honored" to be the dean and to be able to continue to support the various programs of the Tuck School.
"We have a lot of initiatives that we are planning and they are all aimed at giving our students the best possible leadership education," he said. "Tuck competes with the other great MBA programs. We are continuously monitoring our program and improving it so that we remain at the top. It is a tough task in a heavily competitive market."
As a result, Danos hopes to focus on faculty excellence in his coming term.
"The most important asset we have at Tuck is a great faculty," he said. "It is important to make sure that we have the very best faculty and to make sure they are accessible to students."
In addition, he pledges to further Tuck's global image.
"Tuck is a very international place," Danos said. "A significant percentage of faculty and students are non-U.S. born and almost all of the students go into global firms. Even though we are in the Upper Valley and are relatively small, we have to reach the world. We have made great progress but we have to continue."
Paul Danos, Dean Tuck School of Business at Dartmouth.
I gave a speech shortly before the holidays to the AMBA annual dinner in London which I thought readers of this blog might find interesting. The speech itself is a bit long, so here is a condensed version:
A few years ago, when the economy was struggling and jobs were less plentiful than they have been recently, it was fashionable to write articles questioning the value of the MBA and predicting the demise of modern business education. Journalists – and even some professors – made bold claims about the problems with business education, then erroneously drew casual links from those issues to the downward trends in b-school applications and salary stagnation.
Today, it is tempting to reject their negative conclusions on the same grounds – after all, applications are up for over 2/3 of all business schools and the demand for graduating MBAs is through the roof. But I believe we must resist that temptation. Instead, we should take a moment to consider these criticisms head-on, and to use them to gain greater insight into today’s business schools. Whether you are a business school Dean studying the current state of affairs at MBA programs or a prospective student weighing your big decision, it can be worthwhile indeed to consider and rebut the various arguments against the modern MBA .
These criticisms fall into five major arguments:
• First, that faculty are not managerial enough.
• Second, that faculty are not scientific enough.
• Third, that faculty are not student-centered enough.
• Fourth, that a focus on rankings has distracted faculty from important scholarly work.
• Finally, that the return on investment for an MBA is negative.
The first group of critics claims that today’s faculty are not teaching actual management techniques, partly because their students do not have enough experience to absorb them. In short, these critics worry that young MBA students are stuck studying dense and arcane topics that will not give them the real tools they need to become managers. I believe that this argument shortchanges the typical MBA student. In reality, average students at many programs are not 22 or 23, but more like 27 or 28 – and their time in business school is an important complement to many years of work experience, not a substitute. Our programs are the first step on a fast track to leadership and no one is claiming that our graduates are going directly into the CEO position from the get go.
The second group believes that business school faculty are not scientific enough. They argue that faculty research is not based on established scientific methods and that much of ‘management theory’ is merely opinion. These critics are obviously not reading our many fine research journals that rigorously evaluate findings and methods before publication. Frankly, their criticisms apply more to some of the less-scholarly popular business best-sellers than actual published research, the majority of which meets every scholarly test.
The third group of critics claims that faculty are not student-centered enough, and it is a criticism to which school administrators should pay particular attention. In Excellence without a Soul: How a Great University Forgot Education, Harry Lewis shows a strong example of how a school can fail to articulate ideals for future leaders. However, I believe that leading schools are addressing the very issues he raises. Top schools make an explicit effort to define what a good education is by carefully establishing common values, a core curriculum, and an engaged and caring faculty – and this serves as a powerful example for the rest of the education industry. I know that at Tuck, we deeply value our school’s soul and we respect and care about each and every student and alumnus.
The fourth group of critics argues that business school rankings are a distraction that is diverting the efforts of faculty from quality to public relations. Like most deans, I have experienced moments of frustration over an individual ranking or two. But the truth is that I see no evidence of dedicated and talented faculty actually being diverted from their research or teaching by these rankings, and sometimes the rankings can do a good job of keeping us “on our toes” when it comes to being reasonably student-focused. And to be completely honest, I believe that on balance the rankings do generally put schools in roughly the right places (although it can be said that only the “top fifty” are focused on, which can be unfair to others).
Finally, a group argues that there is little practical value from an MBA because it does not advance careers. This claim falls apart quickly under scrutiny. At Tuck the average US student nearly triples his/her salary and the average non-US student has more than a five-fold increase and this general pattern of return on investment can be seen at all the top schools, to say nothing of the amazing new career opportunities that an MBA education gives.
Many of these criticisms are misguided, others are oversimplification, and some are probably just an attempt to garner headlines. But in each argument there are important lessons – and whether you are a Dean trying to set the direction for your program or a potential student deciding which school is best for you, it is better to take them on in substance than to dismiss them simply because all the trend lines are now moving in the right direction.
Paul Danos, Dean Tuck School of Business at Dartmouth.
To close out the series of excerpts from the upcoming book “Inside the Minds: Business School Management,” I thought I would leave my thoughts about the three central keys to success.
1. Put Students First
As the dean of a business school, the most important rule is to always put student welfare first, and always articulate your message as such.
In every strategic step and in the inevitable messages, correspondences, and speeches to students, alumni, and faculty, the dean should put matters in terms of student welfare and student learning experiences. We must always be surveying our students’ needs, and we must modify our programs along those lines. In the best of all worlds, the things you do to meet student needs will also be the things that get you good publicity, but student welfare must be the starting point. In order to build future businesspeople equipped to enter an ever-changing world, it is critical to constantly look at the big issues facing students.
2. Be a “Happy Warrior”
A dean must be enthusiastic and positive, always seeing the good in the whole system and articulating it. You cannot be a downtrodden cynic in this role. You must love the job, love the organization, and show you love it. After all, what could be more satisfying than educating the principled leaders of the future?
In order to achieve success it is necessary to be truly interested in the process of education. While it is true that many skills transfer over from other realms, the skills that make for a great teacher, a great researcher, or a great business person may not ensure success as a dean. Being a business school dean entails working with students, trustees, faculty, staff, alumni and many others, and it is necessary to be able to balance all of these interests at the same time.
3. Treat Faculty as Your Biggest Asset
The strongest force on campus is the gravitational pull between students and faculty. Students want to be guided by their faculty and they want to be respected by them as well – all other student motivations pale by comparisons. Faculty expertise and teaching skills draw students to campuses more than any other factor, and faculty prestige is a major factor in a student’s school selection. The dean must understand how best to harness the faculty in order to achieve the most positive outcomes. Sometimes the most productive work is thought leadership that is fleshed out through research and then brought into the classroom; in other cases, it may be creating materials and curricula. The key to deaning is ensuring student learning and the key to student learning is the proper utilization of faculty expertise.
The job of a business school dean is an interesting one with special constituencies and priorities. In today’s changing world, the job entails grappling with unique challenges as our industry matures and evolves. However, while the mechanics may vary from other industries, some of the most important ingredients for successful leadership are universal, like vision and attitude. In this case, that means putting students first, being a happy warrior, and treating your faculty as your most important asset. Those keys will put any dean on the right path.
Paul Danos, Dean Tuck School of Business at Dartmouth.
Continuing the series of excerpts from the upcoming book “Inside the Minds: Business School Management,” here are some thoughts about one of the strongest forces affecting the business education industry today.
Just as business is becoming more global, so too is business education. From the competition for incoming students and top faculty to the career development of its graduates and the strength of its alumni network, a top school must operate on a global stage in order to be successful.
Ten years ago, the globalization of Tuck was one of my biggest professional challenges. Today, even though the curriculum, student body, and faculty are quite international, it is still an ongoing process to educate people around the world about how our school—the most intimate of the Ivy League—is in fact a major global player.
In the course of adapting our school to meet the challenges and realities of globalization, we found success in a number of specific programs and initiatives that increased our global presence:
• Exchange programs with non-U.S. business schools: We have fifteen such arrangements around the globe.
• Increase in non-U.S. students: Incoming classes at Tuck have gone from about 15 percent to 34 percent non-U.S. citizens in the last ten years.
• Increase in non-U.S. faculty: About 30 percent of our faculty are international.
• Partnerships with non-U.S. schools: We have pursued several partnerships in offering joint executive education programs with international schools.
• Global alumni network: Tuck has made a concerted effort to utilize alumni who work outside of the United States in recruiting and placement activities.
• International press outreach: We have used international trips and constant outreach to maintain good press relations worldwide.
We have been helped immensely in our globalization efforts by the Internet. Today, every prospective student in China, India, Brazil, and so on can gain access to a wide range of information about us, which was certainly not the case twenty years ago. Understanding how to use the electronic media to channel people to a school’s information is a crucial capability, especially for smaller schools.
I have been a dean for eleven years. Prior to this position, I was a senior associate dean at another fine school, and throughout that period the broad outline of the dean’s position has remained about the same. But much has changed in terms of demands on the dean’s time. The most significant change has been related to the explosion in the demand for business education as a result of the global expansion of capitalism. There are many big players outside the United States, and the entire world is converging on the same type of business education—whether it is a four-year undergraduate program, the full-time M.B.A. program such as ours, or the many variants of part-time M.B.A. programs. Faculty are also converging in terms of how they aspire to conduct their research and how they teach, but here resource constraints will force many new schools to accept a different model.
Years ago, it was possible to be a dean without ever having seen China, India, South America, Africa, or Europe. In the last fifteen years, however, deans regularly visit all corners of the world to learn about business cultures and deliver their school’s message. Faculty also are much more international today in terms of both personal background and academic research, and our students bring global experiences to our programs.
The increasingly international role of business schools necessitates that a dean have a stronger sense of communications. A dean cannot just sit and wait on campus for change to happen; he or she must create a compelling strategy, implement that strategy, and be the global spokesperson for the program. We have more support and more resources at our disposal than ever, but at the same time we are expected to cover the whole world.
Paul Danos, Dean Tuck School of Business at Dartmouth.
Second in a series from the upcoming book titled “Inside the Minds: Business School Management,” here are some thoughts about one of the perennial challenges that business schools face.
American business schools typically do not operate for profit, and without the subsidies, gifts, and foundation grants they receive, the vast majority of schools would be losing money each year. In the case of private schools without government support, it is impossible for tuition to pay for the way we approach education. At Tuck, tuition covers less than 50 percent of our expenses, which means most of our revenue must come from non-tuition sources such as endowment earnings, annual giving, and profits from non-degree executive education programs.
An endowment is a savings account run by the central university into which endowment contributions from alumni and other donors are placed. For example, if someone donates $1 million into a scholarship fund, the money is placed into the endowment to be invested by specialists. If that money then earns a 10 percent return—in other words, $100,000—the school is able to spend a portion of the revenue according to specific rules. Most university policies limit that to about 5 percent of the capital balance (in our example, $50,000). Leading business schools have substantial endowments that help pay anywhere from 20 to 40 percent of the expenses. Giving large gifts to business schools has been, by and large, an American phenomenon, but endowments are growing at major non-U.S. schools.
When a business school needs more funding, there are three classic approaches: additional tuition, executive education programs, and fundraising.
Per-student tuition levels are dependent upon the market. In America, the leading full-time M.B.A. programs are mostly within $5,000 of one another, ranging typically from $35,000 to $40,000 per year. However, unlike private schools, state-supported schools do not always charge full market-based tuition; some charge as little as half to in-state students. A decade ago at Tuck, we saw a clear need to add ten new faculty positions in order to deliver the world-class business leadership education that has always been our mission. In large part, we funded this by adding sixty students to future incoming classes.
A second example of finding additional revenue is achieved by expanding non-degree programs such as executive education. At Tuck, we offer an array of short programs for executives; a number of non-degree programs for students, including a summer program that brings 200 to 300 college students here for a full month each summer; a series for minority entrepreneurs; and a course aimed at M.B.A.’s who have been out of the workforce for a period of time.
Finally, one of the largest sources of potential revenue growth comes from fundraising. Most buildings, professorships, and scholarships at leading schools are paid for by “capital” contributions, some of which are placed in endowments. Fundraising through annual giving and reunion giving is both an art form and a management challenge. Both activities require volunteers, callers, and extensive mailing lists—however, none of these efforts will be fruitful without goodwill and a tradition of giving. Before asking for money, a dean has to create and implement great programs for the students. Having the right strategy is the starting point. Fundraising itself depends on having good information about your constituency, and schools are often in the dark about their alumni because they have not kept in touch with them. As a result, they cannot expect to receive many significant gifts or a high percentage of participation.
It is critical to know your alumni and to ensure that they have a good memory of your school. In America, most people have some affection for their alma mater, and keeping in touch is an essential starting point for reinforcing that feeling of goodwill. We send out newsletters and magazines, we host events all over the world, we have clubs, and we hold reunions. We also directly involve alumni in advisory boards and in recruiting and placement activities. Perhaps most importantly, we make sure we continue to serve as a resource for our alumni throughout their entire lives, whether by bringing our faculty to them for lifelong learning courses or by maintaining a strong and responsive alumni network to help their professional development. All of these elements help foster a sense of family, and this virtuous circle of involvement and goodwill leads to financial support.
Many people believe deans spend the majority of their time on the road fundraising. However, I spend only about 30 percent of my time traveling, whether it is to connect with alumni, do corporate interfacing, or interact with donors. Most of a dean’s time should be spent ensuring that each student gets an outstanding learning experience. The support should be the byproduct of a school that functions well and is carried by its vision of student development.
Through a combination of expanded tuition revenue, new executive education programs, and fundraising, Tuck has doubled the size of the school in the last ten years—a necessary step in helping us achieve a better balance of faculty and students. Deans often justify school growth by citing a need to expand the faculty, and in our case we found the growth to be very positive. We used the majority of the money raised during our expansion to support new faculty and raise the level of research support, and we have been very successful in our results. If you believe a strong faculty is the major asset of the school, you must build strategies around creating and maintaining it. This means bringing them in, supporting them, and continually adding resources into the faculty stream. But, expanding student counts beyond a point can be detrimental to the student learning experience and can outgrow the other fundraising opportunities, for new graduates are many years from making large contributions.
Paul Danos, Dean Tuck School of Business at Dartmouth.
Recently a U.S. publisher asked me to contribute a chapter for an upcoming book titled “Inside the Minds: Business School Management,” which presents the thoughts of a dozen deans about current issues in the industry. I thought some of what I wrote might be interesting to readers here at BizDeansTalk, so over the coming weeks I will post a few excerpts here. The first is about a dean’s reporting regime – in essence, where are you on the organizational chart?
The American system is such that virtually all business schools have an affiliation with a large academic center or university, just as Tuck has with Dartmouth. Most graduate business schools usually work under the umbrella of the mother institution but are generally rather independent operating organizations with significant budgetary responsibility. At Tuck, we have our own governance procedures for our faculty, and our faculty members have authority over the curriculum and courses.
In my position as dean, I report to the Dartmouth provost, president, and trustees—however, the operations and policies of the business school are quite independent. My position, therefore, is analogous to that of the chief executive officer of a wholly owned subsidiary of a major corporation.
Our major constraints are the class size and the number of degree programs offered; changes in these areas must undergo an approval process before major alterations can be made. For example, we would not have the authority to double the size of our class without the approval of the trustees, regardless of the dean’s or faculty’s views. However, we are given a great deal of leeway in other areas such as curriculum, student recruitment strategies, research programs, executive education offerings, alumni relations, and development.
The reporting regime determines how much independence a dean has, and it often controls the budgetary system and the all-important revenue and expense sharing formulas between the business school and college or university. The best general advice I can give is to be completely conversant with every aspect of the history and current states of such agreements. They are rarely cast in stone and are often open to negotiations.
Paul Danos, Dean Tuck School of Business at Dartmouth.
"Amba Student Of The Year Award: Finalists show why 'the nerds don't win", The Independent News Channel, 26 November 2006, 21:56
The AMBA audience heard a forthright defence of the MBA against its various critics from Paul Danos, Dean of the Tuck School of Business at Dartmouth College, one of America's top schools. Criticism of the degree, he said, has become fashionable.
"A few years ago applications were down and critics said deficiencies in our programmes were the cause. Today, we know that their reports of our demise were grossly exaggerated."
According to Danos, the detractors said the research was irrelevant, that the material was outdated or that the MBA did not teach students to be managers. Some even said they weren't teaching management and lamented the influence of economic theories on management research.
In reply, Danos pointed out that at the top schools, full-time students were in their late twenties or early thirties, with a wealth of management experience already under their collective belts. Critics of research, he suggested, read too many popular books and not enough peer-reviewed papers.
"Business people know that research published in our top journals is very important. Our researchers deal with real data and real businesses, with very practical topics.
"At Tuck, the average student triples his salary and the average international student has a five-fold increase. So to say that there is no value to the MBA is factually wrong. Many of the critics are just making rhetorical points; just being provocative. The MBA is changing people's lives. I don't think the critics understand that."
Paul Danos, Dean Tuck School of Business at Dartmouth.
Santiago’s post on cultural diversity in Canadian schools, combined with the Diversity conference that our students at Tuck hosted this past weekend, has prompted me to think about the responsibility a business school has for fostering diversity on campus. I know that Santiago posted some thoughts on how business schools must create "cosmopolitan managers" last month, so here are some thoughts of my own:
There is no question that top schools must educate a student body that represents a diverse cross-section of races, citizenships, religions, and geographic regions. But for most schools today, a continued commitment to diversity isn’t just about doing what’s right. The truth is that it is also a business imperative: today’s business education just isn’t world-class if it does not include exposure to a diverse faculty and student body.
Much of the learning and growing that takes place happens through personal interaction, as each student gains new insights from the personal experiences and perspectives of classmates and professors. Without diverse experiences to draw from, they would simply be unprepared for today’s increasingly cross-cultural business environment.
For Tuck, this means that our curriculum must expose them to not just Boston, but also Beijing, Bangalore and Sao Paulo. And diversity is more than skin color and country of origin: they also must be challenged by those with varying professional experiences, from consultants and investment bankers to photographers and football players.
Of course, an administration can place an important emphasis on continuing to grow our diversity, but the work of our students and faculty is where the action really is. Conferences and student-run clubs like the Gay/Straight Alliance, Hispanic-American Student Association, and professional groups like the African American Business Association and the Asian Business Club play a vital role, and a school must provide the infrastructure necessary for them to succeed.
The truth is that every member of a b-school community has a unique background and perspective to share, and in large part students are here to expose each other to their own diverse experiences. Being in such a diverse population is one of the great joys of an academic experience and smart students make extracting every ounce of that endless pool of knowledge a major part everyday life.
Paul Danos, Dean Tuck School of Business at Dartmouth.
As dean of the Tuck School of Business part of my job is to make sure that we develop future business leaders. To do that needs a sense of what makes a good leader, and experience shows us that there is no single attribute common to all great leaders.
If I were to create the perfect leader, I’d blend a variety of qualities. I’d include the vision of Thomas Jefferson, the practical creativity of Steve Jobs, the mastery of knowledge of Alan Greenspan, the tenacity of Charles de Gaulle, the focus of Bill Gates, the inspirational abilities of Winston Churchill, the steadfastness of Pope John Paul II and the courage of Martin Luther King. And I’d assign one other quality as well, one that is often overlooked in discussions of leadership. The quality is selflessness, and you would be hard-pressed to find anyone who better personified it than Mother Teresa.
Starting with no money but inspired by divine providence, which, granted, not every business leader
For the full article you should visit the Financial Times website.
Paul Danos, Dean Tuck School of Business at Dartmouth.
Here in the U.S., there has been a lot in the news lately about companies that quietly or secretly backdated executive stock options (timed so that the executives could realize ‘gains’ that had, in fact, already happened). My expertise is not in stock options, but with a background in accounting and a responsibility for imparting strong ethics in future business leaders, here is my take:
First, some are quick to use this as a reason to condemn all stock options. Frankly, this current back-dating problem doesn’t have anything to do with whether options are (or are not) a good tool for motivating executives. I’m not particularly high on using options because the actual returns on options can come in very spotty ways; sometimes you go years without any value and sometimes you get a big windfall. I think restrictive stock is much better. And now that options must be expensed as compensation, the entire practice is being used less.
But the issue is a useful example of the ways that business education can prepare students for future, yet-to-be-invented questionable practices.
The root of the problem with backdating is the lack transparency about the transactions. Some of the backdating may very well have been criminal, but most would have been proper if they had been completely revealed to shareholders in broad daylight at the time.
Five or ten years ago, not many of us would have predicted that backdating would become a problem. But if you start out saying the basic rule in dealing with stockholders is to be completely transparent about compensation, then most potential problems are solved. I think transparency is the thing you have to teach the students; that basically you must be as transparent as possible in every way when it comes to accounting and finance matters. To the extent that you aren’t, you may be accused of trying to deceive. This does not deny that there are many complexities in today’s compensation procedures and we must also make all readers of financial statements aware of the complexity. Transparency is the antidote to misunderstandings.
Paul Danos, Dean Tuck School of Business at Dartmouth.
Over the past year and a half, we hosted a series of three roundtable discussions in Cologne, Germany; Sao Paulo, Brazil; and Paris, France with other business school deans from China, Europe, Latin America and the US. We recently completed synopses of each transcript, and have posted them here:
From the discussions one can see that globalization is changing business education just as surely as it has changed international business. These roundtables have been a valuable tool for comparing regional business school models and ensuring that our MBA programs reflect the realities of the modern marketplace.
Paul Danos, Dean Tuck School of Business at
This morning I submitted a piece to QS’s “Top MBA Career Guide” about how a good business school can help students develop not just leadership skills, but also the moral dimension of leadership. In case you are interested, here it is:
Each year, a group of Tuck students travels to rural Omaha, Nebraska to share a meal and conversation with Warren Buffet, one of the most successful investors in history. Next year they will have a chance to talk with him not just about his financial success, but also about the personal success he achieved recently by donating a staggering 85% of his wealth to charity.
Buffet’s decision highlights the unique way that Tuck defines leadership: it is not just about financial or career milestones, but rather it is “the ability to inspire others to strive and enable them to accomplish great things.”
To achieve part of that definition, today’s business leader needs an arsenal of intellectual assets in order to be effective. A good MBA program gives the essential foundations by means of:
Most MBA programs are very good at providing these essentials, but in the evolution of a leader these basics are far from sufficient. To achieve the full definition of leadership, much more is needed, and each individual must dig deep within to develop some key personal attributes that fill out the list of leadership requirements. These include:
Can an MBA program play a part in this very personal part of leadership development? We believe that the answer is yes, and we have designed several experiences that do just that.
First, Tuck is designed around care for the individual. That is why we choose to limit our scale and to emphasize teamwork. Class size is limited at approximately 240 students, and students spend virtually all of their time – particularly in their first year – working in small, six-person study groups. Within one year, almost every student knows every other student in his or her class.
Paul Danos, Dean Tuck School of Business at
In the June edition of Atlantic Monthly, a lengthy article claims that “Most of management theory is inane . . . If you want to succeed in business, don’t get an M.B.A. Study philosophy instead.” I wrote a letter to the editor in response (below) and posted it on the magazine’s online forum. But since only magazine subscribers can post on their forum, I thought people may want to read my letter or offer their own thoughts here.
Letter to the Editor:
I am writing to offer a correction and a clarification to “The Management Myth,” by Matthew Stewart in your June edition.
First, a correction: The article states that in 1908, Harvard “opened the first graduate school in the country to offer a master’s degree in business.” Actually, the Tuck School of Business at Dartmouth was founded eight years earlier, in 1900, as the country’s first graduate school of management.
More importantly, a clarification: In “The Management Myth,” Mr. Stewart himself fell for a myth about the modern MBA: that it can be equated to a survey of today’s popular press best sellers.
Frankly, there is a strong element of truth to the author’s central thesis, which is that Rousseau and Shakespeare offer a better grounding for business management than a library of the gurus’ tomes. Many of our best students here at Tuck come to us with a broad liberal arts education. Successful business leaders are as likely to have undergraduate degrees in poetry or fine arts as finance or economics.
But it is not accurate to equate the popular management best sellers with an MBA – those books can be important but they are only a small sliver of a true business education. An MBA from a top business school gives you a solid foundation in quantitative fields like accounting and finance, it gives you the terminology, the underlying theories, the best practices, and it allows you to expand your understanding of how that all works in actual business settings. It also explores the “soft skills” that are so important – interpersonal, ethics, leadership and communications. If Mr. Stewart is interested in sampling the full spectrum of a modern MBA, we’d love to have him up here at Tuck and do our best to kill some myths together.
Dean, Tuck School of Business at Dartmouth
Hanover, New Hampshire.
Tags(clickable): Atlantic Monthly
Paul Danos, Dean Tuck School of Business at Dartmouth.
This week, I was interviewed by one of Peru’s top economics and business magazines, for a special edition about executive education in Peru. I thought I’d share two questions and answers here on our blog – one specifically about executive education, and another about how executives can reach across cultural barriers in dealing with Americans (and since the publication is in Spanish, I’ve included the original and an Engligh version as well). For more from the interview, visit their site here: Semana Economica.
1) “How does a successful, well-rounded, mid-career executive identify the areas he needs to reinforce in order to make the jump to a major leadership position?
In order to be a leader one must really know best practices. I have found that too little time is spent on searching out and understanding how the best of the competition do their jobs. If a person has the basic education and the requisite experience, I would put benchmarking as a very high priority. Why reinvent the wheel? Surveying the best and then making it better in the local environment is a great strategy. Executive education from the best faculties is a shortcut to good benchmarking, because the faculty spends most of their time studying world best practices and they are expert teachers.
2) In the context of increasing Inter-American economic integration (Peru will probably sign a Free Trade Agreement with the US in a few months), how can a Latin American executive best prepare to conduct business in the United States? What key characteristics will he have to understand about his American partner or counterpart?
I would say that the best approach to partnering is complete transparency on both sides. People from all cultures want to partner with people who are trustworthy. It is not nearly as important to be viewed as the strongest or the most knowledgeable as the one who is the most sincere and most willing to learn. Americans often say that they want to “size up” the people on the other side of the table, and what they mean is that they want to make a personal evaluation of their character. I am sure that Peruvians feel the same, and so the best way to proceed is toward openness and honesty on both sides of the table.
1) ¿Cómo puede un ejecutivo exitoso y a mitad de carrera identificar las áreas que debe reforzar para dar el salto al siguiente nivel de liderazgo?
Para ser un buen líder hay que conocer las mejores prácticas. Me he dado cuenta de que, en realidad, se invierte poco tiempo en buscar y comprender cómo es que los competidores más exitosos del negocio hacen su trabajo...
Paul Danos, Dean Tuck School of Business at
In an article by Ilan Alon and Craig McAllaster in the May/June issue of Biz Ed titled, “The Global Footprint,” the authors identified the six things that business schools have to do in terms of their globalization strategy.
One point I think is important to remember (at least this is true for Tuck) is that the career placement activity for graduate business schools has become almost exclusively a global effort. Virtually all of the companies that hire our students are dealing in the global marketplace in one way or another. Companies are often identified with the U.S. or Western Europe, but in essence if you look at where their sales are and where their operations are, they are truly global companies. They are the companies who are leading the charge in terms of globalization in financial services, strategic consulting, distribution, technology, etc. They’re the companies that hire our domestic students and our students from outside the U.S., which is a very significant slice of our total population. They’re hiring our students for assignments all over the world.
When we say that our non-U.S. students do as well in the placement market as do the Americans it’s because these companies are seeing their needs in a global way. They don’t look at an MBA graduate as an American, or as an Indian, or an Asian. They look at each as a person who can fill a valuable role somewhere in their worldwide operations.
At a school like Tuck we are now seeing global career placement because companies themselves have become much more global.
Another important point to consider is that the return on investment for the full-time MBA at a top school is very high and I believe it is much higher for non-US students where the increase pre- and post-MBA is much greater. Additionally, a very important aspect of the full-time program is the opportunity it affords for a complete change in one’s career – with many students going from teacher to marketer, or from engineer to banker. Such reorientations are very common and very valuable for many MBA students.
Paul Danos, Dean Tuck School of Business at
For the second in a series of roundtables on the future of business management education, a group of business education leaders and journalists from the U.S. and Brazil recently came together to discuss the situation in Brazil. This is the summary of that session, The Nature of the MBA Program in Brazil, (also avaible in this post just below using the "Continue reading.. " link) along with the previous roundtable discussion—The Future of Management Education in Germany.
Some of the findings show that while both countries have many new MBA programs, in Brazil, most of the new programs are part-time and are offered by independent business schools that are not closely affiliated with universities. Also, the prediction for the growth of faculties is that in Germany schools seek to build a research culture akin to that in the U.S. while the Brazilian faculties are expected to be mostly part-time, with less emphasis on academic and refereed research.
The most recent roundtable discussion on the Future of Management Education in Europe was just held in Paris on April 23. The transcript of that conversation will be available soon.
More than ever, prospective students understand the value of an MBA degree and that is driving up applications. In addition, the growing needs of global businesses for well-trained managers who can grow into leaders are creating more demand for MBA graduates.
Last year was a turnaround year at many top schools in terms of placement. We saw a peak in the job market in 2000-2001, and we were not expecting the demand to return to that level so fast. Last year Tuck's placement statistics actually exceeded those of the peak year, so that compensation for the class of 2005 was at all time highs.
This year employment statistics will continue to increase-with virtually all first-year students getting paid summer internships and a high percentage of our graduating students with job offers upon graduation.
Like most schools, last year our application numbers were up for the first time in three years. This year our applications are up significantly and I think most other top schools are seeing strong increases in the quality and quantity of students applying. For Tuck this is the largest increase in applications we've seen in modern times, with applications from outside of the USA leading the way.
The monetary return on investment (ROI) of top quality MBA programs is unquestionably very high, but most programs have positive returns. A study of monetary returns published in the January/February 2005 issue of the AACSB's BizEd magazine titled, "The ROI on the MBA," concluded that there are substantial long term benefits to graduates with an MBA. The authors (Antony Davies and Thomas W. Cline) found that, "over the past decade, an MBA's average ROI has been three times the return on Treasury Bills, ten percent better than triple-A bonds, and four percent greater than the Dow Jones Industrial Average (DJIA)."
Of course, there is a lot more to career success than compensation. The full-time MBA also gives experienced professionals the opportunity to change their careers and to enter the global market place for management talent. Therefore, as both the monetary ROI and the psychic ROI become better understood the demand for top-notch MBA programs should continue to grow.