News

Dean Roomkin's speech to the Weatherhead School Assembly

Posted 12/07/2004

INTRODUCTION

One of my earliest observations is that we must live in the future, not the past. As someone once said, "Our dreams become our responsibilities."

Thus it is wrong for us to begin all discussions of issues with the words, "Well, when Scott was here…"

Scott is a great guy and was a wonderful dean. His ties to Cleveland remain strong and we know he has a soft spot in his heart for the Weatherhead School.

Our task, however, is not to return to the good-old days of Scott. Things have changed. Were Scott still dean at Weatherhead, he would be telling you that we need to remain current, to get close to the needs of our customers, and to build the school of 2004 and beyond.

ASSESSING WHO AND WHERE WE ARE

As I look at the School within its current context, I see the following areas where we must improve. In pointing these out, my intent is not to criticize any one person or department or program or ethnic group…etc. However, if our intention is to move forward, we must be honest and open among ourselves or we'll never get where we want to go.

First, our biggest challenge is that we are not rich enough to do all the things we want to do.

When the domestic bubble burst, the most secure schools - those with the largest endowments and smallest reliance on tuition revenue - were able to deal the best with the reductions in applicants. The top schools, like most everyone else, lost 40+ percent of their applicant pool, which left them with 6,000 instead of 9,000 applications. My sources tell me that schools this year are reporting another 20% reduction in applications for the MBA.

When executive education revenues fell by 30-50 percent annually, only the wealthiest had reserves or endowments to get them through the downturn.

Unfortunately, we were not blessed with these financial cushions. The reductions in enrollments, from several sources, had immediate and profound impact upon our ability to do the things we were doing and the things we aspired to do and to be.

Second, our overextension stems in part from offering too many degrees and programs.

Many schools, following the burst of the bubble, sought to boost enrollments by lowering the effective costs of the degree or by appealing to applicants by offering narrowly focused educational opportunities.

a.) With regard to the cheaper degree, obviously when your competitors lower the price by making degrees cheaper, faster, or more convenient, you must respond. This, however, is a slippery slope. If current trends continue, we may see the "one-minute " MBA in our lifetime.

That would be the program that told you all you needed to know in business in one minute.
For example - Finance - Buy low, sell high!
OB - Nothing happens in an organization unless the CEO wants it to happen.

In the face of this trend, we must stand on principle as educators and say, "Basta!" We must educate students and employers about the dangers of what the dean at the University of Chicago has called MBA-lite.

b.) With regard to the specialized masters degrees. There is nothing wrong with them per se. The educational marketplace has always leaned towards specialization. And we must find a way to accommodate those interests within our curriculum.

The danger of a strategy dependent on specialized masters degrees is that degree proliferation results in such finely crafted degrees we come very close to vocation-alism. So-called "bootiqued" MBA programs are everywhere - e.g., the MBA in wealth management, or the MBA in large animal husbandry.

Much of this degree inventiveness is predicated on the theories of economies of scale and marginal cost. The argument is that empty seats in the classroom can be filled without incremental cost. Unfortunately, the argument is wrong, because each program is another claimant on resources. Each group of students wants its own admissions and financial aid allotment, its own activities fund, its own placement support. In the end you don't really save any money; in fact it may cost you even more as you end up subsidizing each program's activities. But more significantly, schools wind up with a collection of degrees-not a school. What is the bond or experience that ties together all these graduates from all these different programs?

Let us be clear about one thing above all else as we work to restore our external reputation: Weatherhead is a management school. That means we are a professional school with a constituency and with alumni groups that have certain expectations of us. As a management school, the MBA degrees and programs and undergraduate management degrees are at the core of what we do. Therefore, they are our priority. All the others - no matter how meritorious - are not at our core.

Third, our administrative infrastructure is ineffective in many areas and non-existent in others.

I have been very open with you on the reasons behind our revenue short-fall this year. There should be no scapegoating; we all share in the blame. At the root of this problem, are inadequacies in the systems for estimating revenue, for building a budget, and for tracking performance. As a management school, how do we live with this fact? Can you imagine a medical school that had a hygiene problem?

Fourth, we have lost our brand and reputation.

We once led the world in innovative approaches to management education. It is a sad day for us when the University of Utah, as it recently did, can send out a bragging letter boasting of the great job they do in experiential education.

Part of our difficulty is that we no longer project strongly to the outside world. We are much better than the world recognizes in the areas such as entrepreneurship and others. That is fixable. But if we did project strongly to the outside world, what would our message be?

What is the Weatherhead brand today? What is it that defines the Weatherhead experience for all of our students -graduate and undergraduate?

Fifth, we are not playing in the global arena.

While we have courses dealing with international business and faculty members well known abroad, we lag behind other schools in terms of how well we have integrated globalism into our activities and our DNA.

Indeed this is a problem we share with the University as a whole. For instance, only about 10-15% of all Case undergraduates have at least a minimum of international experience. Compare this with 65% at a place like Bucknell.

Some argue that we cannot be more active or visible in the global arena because we sit in Cleveland in the Midwest. I disagree.

Northwestern's Kellogg School faced a similar problem several years ago; Columbia, which was the home of the Journal of International Business and in New York City, had a similar problem.

Today there is no option. In fact, in my opinion, the biggest thing we can do for the economy of Northern Ohio is for Weatherhead to become a nexus connecting this region to the global economy, for firms wanting to go abroad, and for companies seeking an attractive place to relocate.

WHERE DO WE GO FROM HERE?

When organizations talk strategies, they must first determine how much time is available in which to achieve their goals. Goals without dates do not motivate behavior. How much time do we have to solve our difficulties?

I see this as a five-year workout, not a ten-year one. Behind my thinking is the realization that competition in management education is getting more severe. I also am mindful of the University's ambitions. Last, I like to remind people that the U.S. won WWII in 3-3/4 years and that was the largest single human effort in history.

Thus we need an intensity of decision-making, a bias towards action, and a passion for this place. All of us have to recommit to our transformation.

Specifically, we need to do the following 5 things:

First, improve the financial and management systems.

While there are several more exciting things needing to be done, none is more fundamental to our success than providing a firm foundation to the management of the school. The initial pillars of this foundation have been put into place. "

• An agreement with the University has been reached to bring our budget back to a neutral position within three years.
• An initial reduction in expenses has been achieved, for which I want to thank the chairs for their willingness to deal with this difficult problem.
• A new administrative structure has been set in place, along with the beginnings of new administrative and fiscal procedures intended to improve our finances and our enrollments.

Further administrative changes are needed and will be announced soon.

Second, increase our revenue.

The fastest route to more revenue is increased enrollments. More effective marketing and improved program design are called for. If you have been reading the minutes of the Chairs and Deans Committee you already know about some of these initiatives underway with our Weekend Saturday MBA, a dedicated program for Masco, and a revision of the E-MBA program.

Additionally, there is revenue growth for us in the undergraduate program both in the short-run through the creation of new courses and in the longer term, as the University expands the size of its undergraduate cohort.

Because it will take substantial efforts to revive our fund raising program, I have begun working closely with the University's development staff. Our fund raising goals are ambitious.

Third, the Weatherhead BRAND must be revived, refreshed and re-promoted.

There are great pressures today for organizations to develop a niche in what they do. Nitching, however, can have its downsides. For management schools, nitching comes with some vulnerabilities:

• your niche must be big enough to support your cost structure, and
• just because you have a niche doesn't mean that you can walk away from other portions of the marketplace.

I prefer to look for a shtick, in the sense, "That's someone's shtick."

The fact is we have one. It is what we have long been known for, what we need to recapture as ours. Once again, we need to become known as the place that leads in the innovation of management education. We used to be the place taking innovative risks, for example:

• competency based curriculum
• action and experiential learning
• life-long learning the EDM program
• professional fellows

To help us reclaim our brand, I have asked Richard Boyatzis, with others of his choice, to lead an inclusive process of discovery that will yield innovative ways of teaching management and restore our reputation as the innovative school of management.

Innovation, however, is not enough of a brand statement given the competition. Having gone through this exercise at several universities, I believe strongly that the strongest, most resilient brand our students and the most attractive brand to prospective employers, is to graduate students who demonstrate superior abilities and skills. Of course, all schools are looking for the same students: smart, experienced, and socially adept. Where we can and should be different is in providing an environment in which, while still in school, students can perfect their skills and in the process, amass credentials as leaders.

The kind of place I envision is one built on a partnership between students, faculty, and staff. This differs from the view of the student as a customer. Rather, I see students as partners. The student-customer is a passive individual, demanding that his or her wants must be addressed. Often faculty find this view of students objectionable because faculty tend to focus on students' needs, not their wants. The student-partner, however, brings a sense of obligation to share in the operation of the school and to make it better.

I recall an incident a few years ago, when a student at an information session demanded, "If I came to your school, what will I be able to do for you?" The question baffled me, because I was working on the student-customer paradigm. He educated me when he said, "Look, I am bright and I can take an MBA at any of the 20-some schools in this community.

So, tell me how I contribute to your school, if I enroll?" I am convinced that such students will come to Weatherhead when Weatherhead accepts the notion that students are partners in the educational enterprise, that Weatherhead will become a school of choice when such students realize that they can distinguish themselves in the marketplace by contributing to Weatherhead, and that empowerment will recognize the superior value of our credentialed and experienced student leaders.

Four, quality is the key.

Everything we do should tell others of our commitment to quality. We do not cut corners because it is convenient. We do not compromise with our reputation. If that means we must work harder, or are forced to do less, then such is the price of quality. In schools and education, as in many other things, the bad drives out the good.

To ensure quality, we have started a "Fresh Look" program so that all programs and departments (academic and administrative) are re-examined every few years with the help of outside experts.

This fall, the School began taking a Fresh Look at the PhD programs in the School, and in the coming few weeks the chairs and I will work up a schedule for continuous improvement of other units.

Inside the school, our commitment to quality means running this place as a meritocracy. That is to say, rewards are allocated according to performance and priorities. But it also means that we become intolerant of free riders. Our culture must support the notion that everyone pulls an oar.

Our meritocracy must also adhere to other principles of governance and administration.
Among them are:

• Conduct our affairs in a transparent and open manner
• Replace our hierarchies with markets
• Replace rule-making with incentives.

In the new semester, I will begin working with the chairs to create an appropriate variable teaching policy and changes to our merit review process consistent with these principles.

Fifth, let us put down some BETS.

These should be big/bold statements of our ambition. I firmly believe that in these matters "Don't make investments like spreading peanut butter on a slice of bread."

Here are my preferences -

• Invest in our junior colleagues - The recent decision to lower the teaching loads for junior faculty reflects this strategy.
• Leverage the strengths of Case by: increasing the number of undergraduates (we have the 24th best program in the US); playing a larger role in the recruitment of freshman who are predisposed or declared for business; offering dynamite gateway courses, especially in such areas as international business; and creating minors in marketing and finance, two curricular areas that have great appeal to students. Establishing closer ties with the other schools at Case also make sense.
• Get out of our silos - To broaden our research, teaching, and service across departmental lines, I am proposing that we create nodes of integration I call "Schools within the School." Each node would function to advance activities on a theme or subject by reaching out to other units of the university for faculty affiliates, offer majors or minors and workshops in that subject, promote and coordinate research on that subject, maintain fellows or post-doctoral programs, and offer executive education courses.

Several subjects represent attractive themes for such nodes, but four strike me to be very logical ones to start with, given where we currently stand.
These are -

• International business
• Entrepreneurship and innovation
• Health
• Business as a Agent of World Benefit

Funds permitting, we can always add to this list.

CONCLUSION

I understand that I have talked about a great many, very significant issues. In the coming weeks we will have the opportunity to discuss these ideas and others. Please communicate with me, if you have reactions, comments, or suggestions about what I have said today, or anything else about the school. I am particularly interested in finding people who would like to work on these issues or projects. Also, I hope to bring to this faculty more details as my thinking becomes clearer.

Thank you for your attention.