Show Transcript

Dave 0:13

Welcome to Dean's Council, a podcast aimed at supporting university leaders holding one of the more critical jobs on a university campus. Your panelists can Kring gemellus and Dave Ikenberry engage in conversation with highly accomplished Dean's and other academic leaders regarding the ever complex array of challenges that Dean's face and one of the loneliest and most unique jobs in the academy. Our guest today is John quelch. In this episode, John shares with us numerous insights, which he has accumulated from his time leading three different business schools located across three different continents. After establishing himself as a distinguished professor and marketing, John became dean of the London Business School in 1998, where he served for three years. During this time, he substantially increased the school's student body, its programs and its revenues. 10 years later, John became dean of the China Europe International Business School, where again, he leveraged his keen perception of market opportunities to expand the faculty through revenue growth, which in turn substantially increase the school's rankings. In 2017, John was named to his third Dean ship at the University of Miami. John held this role for five years upon which he rejoined the faculty at Harvard Business School, where he has over various stents cumulated over 30 years of experience working with graduate students of all types. In short, John has a unique perspective of how business schools work within the broader context of the campus, and also how higher education more generally is trending. The unvarnished conversation and the advice we hear in this episode is filled with remarkable insight that any Dean, new or old, like surely benefit from reflecting on?

Jim 2:02

Well, John, thank you for joining us. We're joined by John quelch, who has had one of the greatest careers in business education of all the people that I know about. And it's a privilege to have you join us and to talk a little bit about the experiences you've had. There are so many Dean's listening to this that just will bleed much of the information that you have to share. So Ken Kring and I will be asking the question, so let me start it off with the first one. You really are. As far as I know, only one in the academic world has had the opportunity to be the Dean on three continents of three significant business goals on three continents. So you've seen International Business Education, right their frontlines more than anyone else has. Can you talk a little bit about what you've seen and sort of what the changes are that are taking place in those different those different environments? And you know how that reflects in today's world and sort of give us your thoughts as to international business education.

John Quelch 3:10

Thanks, Jim. So first of all, I think I should just mention that I think there are two other people who have been teams of three business schools on three continents, but we might have a debate around the operational meaning of the word significant, quote, unquote, in terms of the schools that they ran. So look, globalization has been a fantastic force for international business education. And what we find in many countries is that a flip side of it that's a little bit negative is that the best and brightest coming out of one country want to go and study their master's degree in another country. So I remember as early as 25 years ago, when I was dean of London Business School, a challenge there was, how to be able to find enough good British students to stock the MBA program with enough talent so that people coming from all over the world to London, did not find themselves in study groups with no British students. So that's kind of a slightly unusual thought. But it is an operationally important negative for business schools in the context of internationalization particularly those operating in smaller country environments in the United States. Of course, it's a different kettle of fish. And that problem is not really evident. I think, a second factor related to globalization that's been an area where business schools have actually made a very good contribution as in diversity. And it's really very much the case At the arguments in favor of diversity in terms of greater creativity coming out of teams with multicultural characteristics, a lot of that research has been conducted by organization behavior folks and Applied Psychology folks in business schools. And that has I think, enabled business schools to perhaps take strongest stand than one would have expected in favor of diversity in the student population. And I think that that will continue, despite the ruling that we had from the Supreme Court yesterday, because we know that the arguments are evidence based around the higher performance that one can extract from diverse and multicultural teams. So let me just stop there for

Ken 5:48

John Dewey. Certainly, unless

John Quelch 5:50

you ask him that question will reverse

Ken 5:53

globalization also, partially, I imagined, to COVID. But interested to hear your thoughts on, you know, what we're saying is some of the repatriation of knowledge. For instance, China, you know, they formally sent and educated students in the US are now increasingly returning to China, to build universities. And so to where do you think the extent to which that's a trend? Where do you think that's going?

John Quelch 6:23

So, Japan did that 30 years ago, Korea did it 20 years ago, and it's only natural that China should want to build up its own universities to higher quality global standards, and that, therefore, a higher proportion of Chinese students would then continue to do their graduate studies in China. But, you know, I don't I don't think that we're going to lose traction with China anytime soon. In terms of graduate student enrollments, in particular, because many Chinese with wealth, want to get at least one of their children outside of China, get them established in Australia, or Canada, or the UK or the US and potentially owning property, there move some of their wealth out of China. So that's one continuing motivation. And the other motivation is that there's no doubt that if you want to learn business, the United States is still the single best place in the world to learn business. And so a lot of Chinese families will want to send their children to get the best possible business education and also the network of contacts that potentially can emanate from being in the classroom with a group of students from all over the world, but especially from the US. So you know, the United States has really nothing to toot its horn about in this regard, because there are literally 750 Chinese students in the United States for every one American that there is a China and you know, the imbalances just so enormous. It's 300,000 to roughly 4000. And as a result of that the Chinese Of course, know America much better than Americans know the Chinese. And there are not many initiatives currently in place from our side that really speak to the importance of mutual understanding and collaboration in this regard. So I would mention only NY us Shanghai campus, Duke University's Khun Shan campus. And, notably, I think, the visionary and exceptional Schwartzman college at Shanghai University, where I think 40 or 45% of the students are business students in that program. So China will still be a strong source of students for the United States and for Australia, and the UK and Canada going forward.

Jim 9:04

So go to your experience that you had at Miami. Is there anything along those same lines coming out of South America and Central America, for students wanting to matriculate to the United States MBA programs, like has happened in both Europe and China?

John Quelch 9:26

The principal problem is the dollar strength visa vie Latin American currencies. It's extremely expensive, relatively speaking for students from Brazil or Argentina to come to the US or university education then accordingly, as typically, only a very elite group of households can access that opportunity. I don't think there's any shortage of demand, especially for a US postgraduate degrees so I think what we've seen in Miami is that the possibilities of bringing undergraduates from Latin America to the US, except for a very small number of families, you know that that is not something that we typically see happening. And even in Miami, where you would expect the Hispanic penetration of the undergraduate population to be strong. The vast majority of those Hispanics in the undergraduate business school are, of course, native to the United States, they're not immigrants from Latin America. When it comes to graduate degrees, though, there is, as I said, a lot more interest out of Latin America, in securing a US degree on top of their native undergraduate qualification. And there, as I've said, the resistance is rarely on the price point. More than anything else, we have been able to organize some articulation agreements with some business schools in Latin America, whereby undergraduates of caliber can gain credit into our master's programs. And therefore since we are charging tuition on a per credit basis, it renders the pricing slightly more attractive than it would otherwise be. But generally speaking, I would say that University of Miami is not nearly as successful in penetrating Latin America, as you would hope and expect it to be. The one standout I think in this area in the US is really Babson College, which, over a 40 year period has done an excellent job of cultivating its reputation for entrepreneurship in Latin America, and they do secure a significant number of undergraduates who are from prominent families who do undergraduate business for us at Babson

Ken 12:06

she on one of the amazing markers of your career is that you have increased enrollment and revenues virtually every place you've been. Now, certainly with maturing MBA and some masters markets, you know, what advice or what insights do you have around sort of where are there opportunities, sort of beyond the zero sum game for enrollment increases?

John Quelch 12:33

Being a marketing person, I'm really a growth oriented person. I don't like being in situations where there isn't upside growth potential. And what what I've done Canada's you know, as I've never accepted a Dean's role in any city that did not have significant tailwinds behind it. Well, I hesitate to say this, but I would not be well suited to be the dean of an institution in a relatively rural environment. I operate only in big global settings with great global brand names in their own right places that our destinations where students from around the world wish to or likely to wish to come and then package a positioning and value proposition that takes advantage of those tailwinds. So even even in Miami, for example, I think, being alert to the demographics of the era, I saw the opportunities in Miami coming back in 2016, before they became fashionable, and now everybody is moving to Miami. But seven years ago, that was not so obvious a thing to do. So I think, you know, my advice to people who want to be Dean's is to actually be quite careful in terms of the the location that you choose not not not the school, but the location where the school is located. That that I think can play a very important role in terms of whether or not you're able to grow

Jim 14:17

that breakpoint, looking at Europe for just a minute. One of the concerns I always had when I sat in the Dean's job relative to potential issues that could crop up in the MBA programs. You know, we're all married to the two year MBA program in Europe, there are a number of one year MBA programs and actually, it's probably the only place in the whole world. It's got the one year program, there may be a couple of others. And I always worried that if if one of our top five business schools were to adopt a one year MBA program, it would cause a domino effect with everybody else which could cause all kinds of problems. Yet it never happened. It seems like it just stayed Europe centric. And they still have those one year MBA programs over there. What do you see in that regard? It's a pretty interesting concept.

John Quelch 15:11

So I got into a little bit of trouble 25 years ago in London, where London Business School had the traditional two year MBA program. And of course, our principal faceoff competitor was INSEAD with the one year program. And every journalist who interviewed me asked me about it, and they became so exasperated one day that I said, You know what, a one year MBA program is what you offer when you don't have enough decent faculty to offer a two year program. And that was published in the Financial Times and sent me back a little while with the then dean of INSEAD in terms of our collaborative relationship. But there is a sense in which INSEAD because it's very experience heavy with respect to pre experience requirements, and IMT even more so those schools can offer a one year program and so forth. Course, the problem is that the student really has to know that they want to go to McKinsey or Goldman Sachs within one week of starting the program. Because the recruiting starts so early, that there isn't really a chance in these programs for someone to reinvent themselves and rediscover or discover for the first time subject areas which are different from those they've been focused on previously and their work environments. So I think for transitioning and transformational purposes, the two year MBA still retains a lot of appeal. And of course, many recruiters value the fact that they can use the summer in between first and second year as a test run for trying out those who they think might fit with their long term recruiting initiatives. By the way, there are some schools, there are some schools, Jim, who have switched from a two year to a one year program in North America in an effort to deal with the fall off and in enrollment. And none of those cases that I'm aware of has the performance or the ranking improved.

Jim 17:29

That's I thought there were a couple that did try that. And that's interesting to hear you say that. So thanks,

Ken 17:36

John, another perspective that you bring that is unique is just insights around faculty in different parts of the world. And you've had the opportunity to build faculties in three different continents. Do you have any insights around friends? I mean, there's a lot of talk around interdisciplinarity, you know, sort of, are there are there challenges or differences from continent to continent for us to know about?

John Quelch 18:02

I don't think that there are significant differences in the following sense. Number one, as a you know, can I'm a Marketing faculty member by background, but no business school can be a great business school without a great finance department. And that usually means a great finance, a great accounting, and to the extent that economics is involved in the business school, a very strong economics group. Those three, from a political point of view, those three departments usually travel together in unison. It's very important if you're a dean to have those departments on your side, and to invest in the further development of scholarship and teaching excellence in those departments. I'm not saying that the others are not important. But, you know, fundamental to what most people can't get online and need to go to school to get is training in finance and higher level accounting and in economics. So that's, that's the same whether or not you're in China or in London or in Miami. The second truism is that there in my experience, there are only three things that motivate faculty. You know, one is money, the second is power. And the third is recognition and respect. And what you have to do wherever you are, in whatever leadership role you're in, is figure out what turns each person on and figure out from that, how to motivate them. And that's the same again, whatever environment you're in, you're going to have Have a mix of people, you know, for it just to give you a little bit more color on it. Some faculty members are very, very money oriented, and you know, measure their worth in an institution according to the amount of money they're paid. And you know, that often goes along with being in the finance faculty, for example, a second group of faculty are all about recognition. And the respect that goes with, for example, becoming a chaired professor. I know many finance faculty who couldn't care less if they're a chaired professor, as long as they're earning more than anybody else. But there are organization behavior faculty who aren't interested so much in the money. But you know, if they've done a fantastic scholarship job over two decades, they want to be recognized. And obviously, that's, fortunately for many Dean's that's cheaper than compensating the finance faculty. And then there's a small minority of faculty, and it is a minority, it's usually only, you know, 5% of faculty who are really turned on by power. And, you know, they, they're not necessarily the greatest scholars, they're not necessarily interested in pulling in the most amount of money, but you know, they want to be the influences, the, the kingmakers the power brokers behind the scenes in the institution. And so you, you find these people in every culture is pretty much the same mix, wherever you are. And therefore, I would say, there are truisms that crossed the cultural boundaries. And though those are the things you need to focus on, not worry about the obvious intercultural differences which require, you know, appropriate recognition of, you know, national holidays and different customs, and so forth from one country to another.

Jim 22:10

How do you address the big concern? The big question that keeps coming up, it seems to have come up more recently, relative to the value of higher education in general. And obviously, the tuition, the rising tuition costs. Universities are not particularly good at cutting off dead wood, but rather letting it sit there and cost them money, and they just keep increasing tuition and increasing tuition. And at some point in time, we think there's a ceiling and yet we haven't hit it yet. But how do you look at the value of higher education relative to the way people are thinking today and some of these concerns that people are expressing?

John Quelch 22:51

So I think I think Jim, higher education is one of the most inefficient in industries, certainly in the United States, maybe not so much in the rest of the world. But in the United States, the inefficiency is propped up by the generosity of alumni who don't demand sufficient for the investment that they make in the universities that they went too. If you took away tomorrow, all of the alumni funding that goes into higher education each year in the United States, which would then put it on more of a level playing field with the UK or Australia or Canada, where that level of philanthropy does not exist, the US university would collapse under the weight of its own inefficiency. I'll give you another illustration. In 1978, I took a master's degree from Harvard University, the tuition for that degree was $4,000. If that $4,000 was inflation adjusted today, it would be $23,000. The cost of bomb degree today is $60,000. List Price. That tells you a lot about what you need to know about why the complaints regarding higher education's in inefficiency are so legitimate. And, you know, if if the public really understood how few classes most business school professors teach, at the top institutions for salaries that most people in the country would consider magnificent, they would be appalled at how little work, quote unquote, these university professors have to do for the compensation that they receive. And, you know, by the way on on university campuses, as you know, business schools have a reputation which is not a particularly positive reputation. I mean, Of course, if they are making money and can cross subsidize the music school or the Divinity School, that's great. But the reason why business schools don't have a good reputation is because professors at business schools get paid a lot of money. And they don't have to chase any grants to get it. If you're a professor at an engineering school or in a science department, you have to chase grant money in order to cover your salary. And Business School professors don't actually Law School professors don't either for the most part. So this is, you know, a non unreasonable source of I won't say it's resentment, but you know, or jealousy, but a source of concern to folks on the university campus. And it's one reason why business schools do run into difficulties in terms of, if you like, internal reputation on campus. So what what to do about it, I mean, I'm, I myself am a very frugal person when it comes to managing budgets. And I think, you know, perhaps one reason why I've been reasonably successful is because the institutions I'd gone to a bring a level of frugality and financial stewardship, that coming from Harvard with unlimited resources might seem slightly odd. But nevertheless, that's who I am. And, for example, at the University of Miami, we were operating the business school with approximately to give you one metric $1 million of revenue per staff member, not per I'm talking about per non academic staff member. So, you know, I would challenge anyone to look at that business school and tell me that, you know, they are anywhere close to $1 million of revenue per FTE non academic staff. Now, actually, that was too high, it really should have been 750, or 800,000. But due to COVID, we were forced to lay off and furlough certain number of people. So the revenues kept growing and the staff numbers were restricted. So the the KPI that particular KPI grew to be a billion dollars should have been about 750 or 800. But my point is, most business school Dean's and most advisory boards and business schools, they don't look at these kinds of KPIs on a regular basis. They're looking at rankings, and maybe starting salaries of students, which are, of course, very important outcome measures. But you can't, you can't have any credibility on a university campus as a business school if you're not seen to be a model of efficiency and good operation. I mean, that's what the President of the University expects, by way of example, from the business school and the money that comes from the business school in terms of access, as I said, is needed in some respects to cross subsidize other institutions that can't be as well run.

Ken 28:33

In a similar vein, most Dean's tell us that not only are they asked to subsidize and share, but also there are other aspects of being in a university that require increasing interaction, sort of across the university, do you have sort of tricks of the trade or tips to folks who may have sort of those increased requirements and requests.

John Quelch 28:57

So when I was a young professor at Harvard Business School, this issue came up quite frequently because the president of Harvard University was in charge of a set of schools where every ship ran on its own bottom. In other words, every school was supposed to wash its face and cross subsidization was not really in fashion. And whenever the issue of taxing the business school came up, John MacArthur who was the Dean for 15 years at Harvard Business School, a great guy, what he would do would be heat, go to a couple of our wealthy alumni and say to them, Look, you know, the President is giving me a hard time they need a chair of the Divinity School, you know, you're a Christian, you know, would you mind coughing up 3 million, so, you know, I can get you to give a chair to the Divinity School and if I get a couple of those, then, you know, the President will be off my back for the at least the next year. In other words, what what we're seeing here is that You know, the business school needs to find ways to help solve the problems of other Dean's without having the provost get into a mode of raising taxation on the business school in order to do so it's much better if these kinds of relationships and cross subsidization is can be for stalled by being handled as kind of personal and formal manner with one on one, assistance and support and help being provided rather than the business school being standoffish and fighting a rearguard action and then being taxed to the hilt, because they weren't collaborative enough. So I've always made a lot of time for other Dean's for helping other Dean's for as we did in Miami joint executive education with the education school, we developed a joint Ph. D program with the nursing school, we provided additional course support and management for the music school because the dean there was very keen that all of his music graduates know something about business, so they wouldn't be fleeced by agents, once they went out and started their career as performers. There are any number of things that you can do as dean of the business School to help your other Dean's. And if you do that, then the mood won't be there, the negative mood won't be there that will result in you being taxed.

Jim 31:41

I think that is really great advice. I tried really hard in my role to work very closely with Dean's of all the other schools and it really did work we've we always sort of felt we were the hub, and the spokes for the other schools. And we wanted to participate in some form of academic experience with every single one of those schools. And we almost got there, but you're against great advice. Great advice for Dean's. Before we run out of time, I've got to ask you a question about pedagogy. Because you have always been a major proponent of the Socratic method. And the case study, I grew up with it in my two years that I spent on the Charles River and really believing in myself. Tell me what you think about the future of the case method and how it should be positioned and how you would position it. When you were in a place like Miami that really, most of the faculty didn't understand it, they to them, it's something that's a little scary, is the way I look at it. And I'm really interested in your thoughts on that.

John Quelch 32:45

So we have this term, the flipped classroom, yep. Which has been fashionable in the last five or five or six years. The case study method invented 100 years ago, was the flipped classroom from the day it was invented. And so it always amuses me that people feel like they've discovered this wonderful new approach that kind of takes a sage on the stage off the stage and replaces it with simulations, or interactive experiential learning case study method, whatever it may be. Because from a Harvard perspective, that's been a truism for 100 years. I think, in terms of institutions where the case study method is not that well ingrained in the culture. I think it's very dangerous for someone who is like myself a big proponent of it, to come in and be preaching that gospel. It's really up to individual faculty to discover the relative merits. I mean, in my experience, the faculty that that I've seen, who are using the case study method as the core pedagogy in their curricula typically are performing extremely well in terms of student readings. And the level of interaction is very much appreciated by the students. I mean, I don't think that I've actually ever taught an MBA class that involved only a lecture. And you know, my definition of a good class has always been the class is best when the faculty member eats up the least amount of time that the students are delivering 90 95% of the total content of the class. And in today's era, I think this is even more important than ever. One One thing I might just add, because someone asked me the other day about chat GBT and what did I think of that with respect to the case method? And I said, well, in all of the in all of the classes over toward, I've always allocated 50% of the grade to classroom participation. And if you want to circumvent chat, GBT, I would suggest you do the same prescribed case studies for your classes. Of course, the student might go online and find some crazy answer to the case study. But if you're assigning 50% of the grade to class participation, someone who's found the chat, GBT answer, but doesn't really understand it is going to try and play that in class, they're going to be unmasked pretty quickly, unless they're very, very adroit. So I think the case study method still has tremendous legs I recently, Jim did something that no one I think has done before. I've had 39 research assistants in my career at Harvard Business School. And I invited them all to a reunion at Harvard last month, and believe it or not, 20 out of the 39 came, right. And collectively, those individuals working with me develop case studies that have sold over 7 million copies. And to anyone who says, You can't make an impact as an educator, by being heavily invested in case writing and cost development. And you should just focus on scholarship. In arcane journals, you know, that's my answer.

Jim 36:43

Well, I have to say, what a wonderful way to finish because I could not agree with you more. Just to tell you when I started teaching at USC, and 25 years ago, I initiated it and 50% class participation, because that's what I that's how I was brought up. And I was chastised significantly, by the associate dean of the school said, it can't be higher than 10%. I said, I'm going to tell you some, I'm going to leave it at 50%. If you want to fire me, fire me, but it's going to stay at 50%. That's the way I learned. That's the way I think I can teach. That's where I think the students will learn. And quite honestly, the evaluations prove it. There's no question about that. So thank you for that validation of that. But more importantly, thank you for all of your insights today. This has just been absolutely phenomenal. And, and I can't tell you, personally and professionally, how much I appreciate the opportunity to talk to you. And to to hear your thoughts. You just, you've been a dean of Dean's. And we truly, truly appreciate.

John Quelch 37:44

Thanks very much, Jim. Good luck. Thank you.

Ken 37:46

Thanks, John. Really great to be with you. Thank you, Ken.

Jim 37:49

Thanks again.

So Ken, that was a fascinating, fascinating talk with John quelch. What are your takeaways from that?

Ken 38:06

Well, I mean, my first takeaway is experience matters. This is individuals had extraordinary experience across many institutions in many markets, who also integrates with a kind of intelligence and observation that I mean, I thought it was a fascinating conversation could have gone on for another hour. And any topic we touched, he had both experience and insight to talk about. How did you take it?

Jim 38:37

You know, I couldn't agree more, I really wish. And looking back at my own career that I had had the opportunity to hear that kind of wisdom in my first year of being a dean. Because there was so many things that he reflected on that would have helped me in terms of the vision I put forth and sort of all kinds of things I just the experience that he brings to the fore there's no question about that. Having seen from all all angles, I mean, not only being a dean in China, being a dean in London, being a dean in Miami, the dean in Miami helped him with a thought process on understanding the lead Latin American student population. So maybe there's a there's a worldly experience right there.

Ken 39:24

Great. He also, I mean, it's a remarkable skill on his part is that he doesn't sugarcoat anything. So he'll he'll say, he'll he's able to say things in an unvarnished way that is both makes him understandable, but also incisive, I mean, you know, his comment about the inefficiency in the US education system, and why and how education has become too expensive for the consumer was just, you know, completely straightforward and unapologetic for, you know, bring Imagine what it could be considered bad news to those of us who are involved in running universities. Yeah, I

Jim 40:07

think is just the way he laid out how much it cost him to get his postgraduate degree. And then what that would what that would cost today versus what it does cost today, right, then, I mean, that's just in black and white when it's 3x, what it should be, and then to say, okay, a million dollars per staff member, well, that's those are metrics that are really important for Dean to understand, and would really help you in terms of just the way you look at your own school. So I think that is just very wise in terms of his, the way he looks at things and very, like he's a cuts right to the chase quickly, and I truly appreciate it at most marketing guys. Don't cut to the chase. He does.

Ken 40:51

Yeah, yeah. I, I loved his description of faculty motivators, for instance, and being able to categorize in sort of different buckets, some interacting, but you know, between money, power and recognition, respect, you know, there's some sort of incentive points that good leaders have to be able to understand and tap into.

Jim 41:15

And, you know, it's interesting, because we have had a number of Dean's on our podcast that have talked about when they became a dean, initially, they sat down with every single member of the faculty, we have talked about that. But here now is the framework under which you should be talking to them, what does motivate them? Are they motivated by power recognition or money, right. And if you can come away from that meeting with that individual, then you know very much where it's going to go. And that's really what John said, and a lot of Dean's had those meetings. And, like some of you said, they made sure they went to their office as opposed to have the meeting in the Dean's office. But really, with with that thought in mind that I needed to learn those exact aspects of that individual to figure out how to motivate him. So just very succinct and and the way he threw things out. That's great. Well, thank you. That was a good, good,

Ken 42:06

good discussion. Yes.

Dave 42:08

Thank you for listening to this episode of Dean's Council. This show is supported in part by Korn Ferry leaders in executive search. Dean's Council was produced in Boulder, Colorado by Joel Davis of analog digital arts. For a catalogue of previous shows, please visit our website at Dean's council.com If you have any feedback for us, please let us know by sending an email to feedback at Dean's council.com. And finally, please hit follow or subscribe on your favorite podcast player so you can automatically receive our latest show