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SOM: Under New Management
Ever since it was founded in 1976, the School of Management has struggled with both its own identity and its public image. A new dean is bringing some powerful credentials to bear on the future.
by Jennifer Kaylin
February 1996
Jennifer Kaylin is a freelance writer whose work regularly appears in the Yale Alumni Magazine.
The Yale School of Management is not yet 20 years old, but in that relatively short period, it has changed its name (from the original School of Organization and Management), undergone a dramatic curriculum overhaul, and had eight deans. Still, the University’s youngest and most problem-plagued professional school-once described by Fortune magazine as “an unwieldy contraption that never really got off the runway”—does not appear on Business Week’s list of what the magazine considers the nation’s top 20 business schools. SOM has struggled to recruit top-flight faculty, and at one point, it saw alumni financial support all but dry up.
In the late 1980s and early 1990s, the school’s troubles came to a very public head when some SOM alumni, angered by the administrative actions of then-dean Michael E. Levine, hired an airplane to fly over commencement ceremonies trailing a banner that called for his ouster. Following Levine’s departure, in 1991, there was even talk in some quarters about whether SOM should continue to exist.
But that was then, say today’s students, faculty, and alumni; now, SOM is a very different place. After going through a period of painful self-examination, the school has emerged with a stronger curriculum and faculty, improved morale, and a heightened confidence in the innovative mission it set for itself two decades ago: to prepare students for careers in both the private and public sectors—for life as arts administrators as well as corporate CEOs.
“It’s a more peaceful and congenial place than at any other time in my 14 years here,” says Theodore Marmor, professor of public management. Adds Professor Stanley J. Gartska, who served as acting dean of the school from 1994 to 1995: “The last 15 months have been a remarkable period of peace and tranquility. We got our act together. The faculty coalesced, and everybody got down to business.”
These comments might well be dismissed as just so much positive spin proffered by loyal faculty members—except that objective outsiders are reaching the same conclusion. “It’s a much more stable place,” says John R. Byrne, a senior writer at Business Week and author of The Guide to the Best Business Schools. “The students are as good, if not better than ever, and it’s got a much stronger faculty.” Two who are frequently mentioned in the national business press are Kenneth French, the Edwin J. Beinecke Professor of Management Studies and Finance, and Sharon Oster, the Frederic C. Wolfe Professor of Management and Entrepeneurship.
If the activity in the admissions office is any measure, SOM definitely appears to be on the mend. “We haven’t been encountering all those negative presumptions of past years,” says Richard Silverman, executive director of admissions. “Prospective applicants used to say to us, 'I have this vague impression that something’s wrong with your school. What’s going on?' But we haven’t had those kinds of conversations this year.” Even more significant, Silverman says, requests for applications are up 32 percent from last year, and first-round applications, which were due the last week in November, were up 70 percent. “The early indications are that something quite spectacular is happening,” he says.
Silverman and others attribute this fresh wind blowing across the school’s campus between Hillhouse Avenue and Prospect Street to a variety of factors: the impressive job placement record of the Class of 1994, the skill with which Gartska and former dean Paul MacAvoy managed the school while a permanent dean was being found, and, most important, the appointment last fall of then-U.S. Undersecretary of Commerce for International Trade Jeffrey Garten to serve as SOM’s eighth dean. “There’s no question that the Garten appointment was a big boost for us,” Silverman says. “With his distinguished work in both the public and private sectors, people seem to perceive him as the embodiment of the SOM mission, a kind of ‘cover boy’ for the school.”
Indeed, Garten, who took over the deanship on November 1, received a hero’s welcome when he arrived on campus. John W. Garofano ’97MPPM, who is a writer for the Exchange, an SOM student newspaper, says reaction to the Garten appointment was “totally positive. Nobody had a negative thing to say. I think people are just waiting to see what he can do.” John Pepper ’60, a member of the Yale Corporation and a former member of the SOM Advisory Committee, called Garten’s appointment “just what the doctor ordered.” And President Richard Levin ’74PhD, himself an economist and a former member of the SOM faculty, praised Garten for typifying “SOM’s ideal of a manager whose achievements span the public and private sectors and whose capabilities include both reflection and action.”
Outside the University the reaction has been similar. “He’s not an acquiescent, quiet person,” says Business Week’s Byrne. “He’s a person who likes to make waves and rattle cages. In Washington, he had his own public relations person, whom he brought with him to Yale. This is just what Yale needs: somebody who will raise the profile of the school, who will bring it more visibility and strengthen the notion that Yale is different.”
But while Garten and SOM may seem like an obvious match, their coming together was by no means inevitable. The job of being a dean at any business school these days is a daunting one. With 700 MBA programs nationwide, 300 of which have sprouted up in the past 20 years, competition for top-flight students and faculty is fierce. Moreover, the days when there was a booming demand for MBAs are over. Add to that tight budgets, independent-minded faculties, and rapidly changing notions about what a business school education should provide, and turnover among B-school deans is rampant.
At SOM, the dean faces these issues and more. Because of the multisectored nature of the curriculum, he has many constituencies, often with seemingly diverse agendas. SOM’s relative youth and small size (437 students) also pose challenges in attracting recruiters and helping graduates find jobs.
“At a small business school, the dean teaches, meets with students and faculty, oversees fundraisinghe does everything himself,” says MacAvoy. “Then you have to deal with the central administration of the University, which runs your life literally down to the shoestring. It wears down anyone who takes on a senior management role at Yale.”
Charles Hickman, director of projects and services at the American Assembly of Collegiate Schools of Business, an accrediting body, agrees. “There are a lot of contradictory pressures on business school deans. Candidates who would make good deans can earn a lot more money in private industry. They have to be willing to make changes, and people who do that are usually unpopular.” Hickman adds that a dean’s fundraising abilities are growing ever more critical, and unlike a chief executive at a private company, a dean’s authority is limited. He says a successful business school dean “has to have an ego—in a good way—and believe he can do some good.”
Yale’s search for someone to lead SOM spanned 18 months, much to the annoyance of MacAvoy, who served as interim dean before being succeeded by Gartska. “The search was mismanaged, extended, and prolonged,” he says. According to MacAvoy, a prime candidate lost interest when Yale decided to open up the process to a worldwide search. “They had this frantic search under an overlay of a public beauty contest that went on and on,” MacAvoy says.
Barry Nalebuff, a professor of economics and management who served on the search committee, says that its efforts nevertheless produced a clear consensus on one candidate: Jeff Garten. “He was our only choice,” Nalebuff says. “The President told us to set our sights high, and when we did, that’s who we wound up with.”
Levin admits that the process took longer than he had planned, but points out that lengthy searches for B-school deans are not uncommon. “The market isn’t as clearly defined as in other fields,” he says. “You have to look in your academic backyard, and outside the academy as well.” Garten was approached early in the process, Levin says, but was unwilling to leave his government post. Then, when he was contacted again at a much later stage, the 49-year-old investment banker felt he'd fulfilled his commitment in Washington and was more receptive to the idea of coming to New Haven. Levin says that although SOM wooed other candidates, Garten was the only one who received a formal offer.
Although Garten has taught at Columbia and New York University, he is far from being a tweedy academic. A 1968 graduate of Dartmouth College, he earned a PhD in 1980 from the School of Advanced International Studies at Johns Hopkins University. In addition to his familiarity with Washington (he has served in the Nixon, Ford, Carter, and Clinton administrations), Garten is also at home on Wall Street, where he worked as vice president and managing director at Lehman Brothers. In 1987 he founded and managed a small investment bank, and he became a managing director at the Blackstone Group before moving to the Commerce Department in 1993. His wife, Ina, owns and manages Barefoot Contessa, a gourmet food store in East Hampton, New York.
Ironically, perhaps, this impressive breadth of real-world experience could cut both ways as Garten attempts to elevate the stature of SOM and position it for the 21st century. While his credentials fit well with SOM’s multisector management curriculum and have earned him the respect of faculty and students who know he acquired his knowledge through experience, not just books, only time will tell whether a man accustomed to calling the shots (at the Department of Commerce, he managed a 2,500-member staff and 140 national and foreign offices of the International Trade Administration) can master the delicate art of academic politics so vital for building faculty support.
Speaking last November to a group of bankers in Hartford, Garten revealed the sort of sure-footed intelligence and easy-going charm that must have convinced the search committee he possessed the diplomatic skills necessary for the job. Looking fit and energetic (he is an avid runner, skier, and tennis player), Garten told his audience that as dean of SOM he wanted to “be in touch with as many of you as possible.” His diplomatic acumen was also apparent when asked what recommendations he had to stimulate the Connecticut economy. “I’m not going to be so presumptuous after four days in Connecticut to think I’ve thought of something you haven’t,” he said. “I’m going to pass on that question, but give me a year and I might have some ideas.”
Later, when a question was asked about the United States’s continuing refusal to trade with Cuba, he rewarded his audience with a refreshingly candid response. “When I was with the government, one of the questions I heard most was ‘How come you trade with China and Vietnam, two Communist countries, but not Cuba?’ I can’t remember how I answered that question.” After the laughter subsided, he wasn’t shy about disagreeing with the administration in which he'd so recently served. “We ought to be trading like crazy with Cuba,” he said. “The more we trade, the faster that rotten apple will drop.”
A visit to the dean’s office, located in a restored 19th-century mansion on Hillhouse Avenue, reinforces the point Yale administrators are continually making: SOM isn’t just another MBA factory. Paintings of a 19th-century European street scene and a kitchen-table still life, rather than somber portraits of imperious-looking capitalists, adorn the walls. On a low table by the couch, sumptuous coffee-table books and a plate of cookies share space with the Wall Street Journal and other business publications. Garten himself is congenial, but he wastes little time on small talk. Getting right to the point, he says he fully endorses SOM’s basic mission—to offer a comprehensive, multisector curriculum that takes a liberal arts approach to management training—but believes it needs to be clarified. “Clearly, SOM has a perception problem. People outside the school are not sure how to categorize it. Is it a business school, a management school, or a public-policy school? In a world where quick impressions can lead to lasting opinions, it’s important that our image be clearly defined.”
Without criticizing the existing curriculum, Garten stresses the need for SOM graduates to have a complete command of basic business skills, such as finance and accounting, along with a knowledge of occupational behavior and the other so-called softer sciences. He says that in general he feels the curriculum is well balanced, but he doesn’t rule out making changes “to keep up with changing times.”
In fact, Garten has already identified three areas that he wants to see expanded. One is entrepreneurial management. (“I don’t mean inventing the light bulb in your garage; I’m talking about having a mind set that allows you to be flexible, innovative, and adaptable to change.”) A second is international studies. (“Our economy is being internationalized at lightning speed, so people who manage business ought to have a broader sense of society, to develop more cultural sensitivity.”) The third is social responsibility. (“I’m not being nostalgic for the philosophy of the 1960s, but in self-interest terms, if you want a competitive work force, you are going to have to invest in it.”)
Garten also intends to elevate SOM’s standing in Business Week’s rankings, and to attract more job recruiters. These issues are interconnected, because job recruiters are greatly influenced by rankings when deciding which campuses to visit. “As an investment banker, I understand the significance of ratings—regardless of whether they have merit,” Garten says. “Ratings affect the pride students take in their school, their ability to get good jobs, and the attitudes of recruiters.” In an effort to boost SOM’s standing, Garten says he plans to increase the faculty “by a handful” and to heighten SOM’s profile in the business community.
Garten has a strong ally in Mark Case, the school’s new career development director. “I was talking to a professional acquaintance who works 35 miles from New Haven,” Case says. “He was totally unaware of the mission of SOM. If the problem is that close to home, I see a real opportunity to strengthen our image.”
However, as much as Case wants to lure more recruiters to campus, he’s aware that SOM’s small size is a deterrent. “Recruiters want a critical mass,” he says. “They want to be assured of a certain yield per visit, but at a small school that trains people for the public and nonprofit sectors as well as the private, there aren’t that many candidates to meet or to choose from.” To circumvent this obstacle, Case plans to arrange for students to attend off-site recruiting forums and participate in video-conferencing interviews.
Like Case, Garten seems to be energized by the challenge of moving SOM into the top echelon of B-schools. In fact, he says that if SOM had been ranked in the top three, he wouldn’t have taken the job. “My career,” he says, “has been focused on building organizations. Taking them to much higher levels. That’s what excites me about SOM.” Another draw, he says, is the strong backing he enjoys from President Levin. “He knows the school well, and he’s familiar with the faculty and the challenges the school faces,” Garten says. “His support is unequivocal, which is an unusual situation for a new dean.”
It certainly hasn’t always been that way at SOM. In the mid-1950s, when a handful of Yale alumni determined that the University should give serious thought to establishing a business school, it was Yale’s then-President, A. Whitney Griswold, who was the leading dissenter. Dedicated to the humanities, Griswold saw no place for what he sometimes referred to as “a trade school for businessmen.” He was also a fiscally cautious leader, having taken office during a period of postwar economic instability, and he feared that starting a new school would mean siphoning off money from the humanities.
In 1963, Griswold was succeeded by Kingman Brewster. Unlike his predecessor, Brewster was an academic expansionist. The times also seemed right for launching a major enterprise. Huge federal subsidies, resulting from the Great Society legislation of the Lyndon Johnson administration, were pouring in to Yale and other research universities. Although he never used the word “business,” Brewster began to talk about the need for Yale to “do more in the social sciences” and to educate future leaders in, among other fields, management. It was Brewster who first articulated the three-pronged approach—public sector, private sector, not-for-profit-that remains central to the SOM culture today.
As a result of Brewster’s initiative, a multidisciplinary forum, called the Institute for Social and Policy Studies, was set up. However, the management studies component was delayed. At a time of widespread campus unrest when virtually all things corporate seemed repugnant to students, the climate was not encouraging for starting a business school. Also, the economy was softening, and there were doubts about taking on a massive new financial commitment.
But by 1971, when Frederick William Beinecke '09S left $15 million to Yale, there was finally enough money to start a school. In 1976, the Yale School of Organization and Management opened its doors. Although the school attempted to clarify its mission in 1994 by changing its name to the Yale School of Management, graduates still receive an MPPM, a Master’s in Public and Private Management, not a conventional MBA.
SOM quickly developed a reputation for being a school for students interested in the public and nonprofit sectors, although then as now, the majority of graduates took jobs in the private sector. According to Case, only 7 percent of the Class of 1995 took jobs with nonprofit organizations, and only 5 percent took public sector jobs. A full 59 percent went into the private sector, and another 16 percent took jobs in manufacturing. The school also became known for providing a noncompetitive atmosphere (grading is pass/fail, and there is no class ranking) where the study of the psychological aspects of business was given as much emphasis as more traditional courses.
That all changed in 1988, when President Benno Schmidt Jr. appointed Michael Levine to serve as dean. Levine, a former airline executive who had been on the SOM faculty, attempted to restructure the school, igniting long-simmering friction between the operations research group (seen as hard-core bottom liners) and the organizational behaviorists (viewed by the bottom-liners as touchy-feely psychologists). Levine gutted large portions of the organizational faculty, which led to charges that he was turning SOM into just another mainstream B-school. “It was an absolute disaster,” says Professor Victor Vroom, a leading organizational behaviorist. “It led to a drastic change in the nature of the institution that absolutely enraged alumni.”
For his part, Levine, now a Northwest Airlines executive, says he is proud of what he accomplished at SOM. “I built a sophisticated academic program, but as in any civil commotion, the folks who didn’t have things come out their way got upset.” He adds: “Obviously it would have been preferable if we had found a smoother way, but in the end, change is always hard for people.”
Levine’s observation about human nature may well be right, especially at a place as intellectually diverse as SOM. After all, it’s a school that has received national recognition for Stephen Ross’s work on arbitrage pricing as well as Edward Kaplan’s research on reducing the spread of AIDS through needle-exchange programs and Douglas Rae’s study of urban poverty. At SOM, future investment bankers attend classes with students who will eventually become arts administrators or work for Save the Children. At a school with such seemingly disparate goals and offerings, some degree of discord may be inevitable.
However, there are many who believe that under the stewardship of Jeff Garten, SOM is ready to make a change, to put the competing agendas aside and come together so that the school can reach its full potential as a slightly atypical, but nonetheless leading, management school. The daunting role model most frequently cited is the far more venerable Yale Law School, which occupies just such a niche (and is consistently ranked number-one in national polls).
“I believe SOM should be first-rate or it shouldn’t be prolonged,” says Levin, “but I’m optimistic we’ll see significant progress in visibility and prominence in the next five years. That’s the target, and I think we’re well-positioned to make a run at it.”  |
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