02: François Ortalo-Magné on Comparing US and European Deanships

A peer-to-peer discussion with the ninth Dean of London Business School.

Show notes:

On this episode of Deans Counsel, moderators Ken Kring and Dave Ikenberry speak with Francois Ortalo-Magne, the ninth Dean of the London Business School, a position he has held since 2017.

They discuss the unique challenges and financial responsibility of being Dean and CEO of a stand-along business school; working with a fiduciary Board; discovering connections between new constituencies and leveraging alumni expertise; and Francois' approach to philanthropy in Europe.

François Ortalo-Magné Bio:

François Ortalo-Magné is the ninth Dean of London Business School, a position he has held since August 2017. As Chief Executive Officer of the School, he is implementing a plan to fulfil a vision of LBS as an engaged community walking the learning journey together.

With a faculty recognised for its world-class academic research and a School community rich in diversity, LBS advances careers, transforms organisations and shapes policy. Its London and Dubai campuses are at the hub of a prestigious global network inspired by their own stories of life-changing impact.

Dean Ortalo-Magné serves on the board of directors of the Graduate Management Admission Council and on the International Advisory Board of BritishAmerican Business. His research on the economics of land and housing markets has been published in leading academic journals and he has advised private, governmental and multilateral organisations around the world.

Prior to his appointment, Ortalo-Magné was the Albert O. Nicholas Dean and Robert E. Wangard Professor of Real Estate at the Wisconsin School of Business. He grew up in France in the Pyrénées and on the family farm in the Lot Valley, before training as an agricultural engineer. He holds a PhD in Economics from the University of Minnesota and his first academic appointment was at the London School of Economics.

02: Francois Ortalo-Magne on Comparing US and European Deanships Podcast Transcript

Ken 0:00

welcome Dean Francoise, also known by his more formal name, Francoise or Thalo. Mcnay, great to have you here today, we've been looking forward to this conversation with you. This is a interesting time in the history of the world. And you bring a very interesting perspective to the role of, of deeming, uniquely, someone who has spent six years as a dean, at the University of Wisconsin before London Business School, where you also have been six years, we're sort of curious and opening, just to hear your thoughts on the major differences, contrast comparisons from where you've been to where you are.

Francois Ortalo-Magne 0:48

Okay, great to be with you, Ken. And Dave, great way to start the conversation. So many differences. But the if I were to pick one, I have the same title, now than I had in the US. But actually here is a complete misnomer. Because he really here if you want to understand my job, you have to understand that I am the chief executive officer of a not for profit organization. And that's very different than being dean in a US university, where there's a whole infrastructure around you. Where also you don't have full control or full power and full responsibility over your operations. So that that's probably the biggest shift is I moved from being dean within the university, to being so called Dean and chief executive officer of a not for profit organization. There is no one behind me.

Dave 1:46

So when you think Francoise about the people who reported to you back in Madison versus the types of people who report to you today, give us a taste of some of these unusual tasks that you never had to deal with before, but you're now having to deal with today? What types of responsibilities do you now have to deal with?

Francois Ortalo-Magne 2:09

Yes, in terms of the breadth of what I oversee, clearly in the US, I never worried about the estate's the maintenance. With regard to it, cybersecurity, you know, the number of very limited responsibilities. Even if you think about the function that I oversaw, like HR function, finance functions, I was always within an environment that was driven by someone else. So they were the element that the university ran. And then even what I ran, officially, it was within the brand and marketing of the business school was within the framework of the brand of the campus. The PR communication was within their framework. So there wasn't that much within us environment where you have total independence and total responsibility.

Ken 2:58

What kinds of things did you have to do to figure out who your constituents were from one institution to the next? And how have you prioritize constituent leadership constituent management.

Francois Ortalo-Magne 3:13

So the first priority I gave myself it was a public priority. If you could have observed me making this a priority, that one would have been the same one in the US as as London Business School, is I read two papers for every one of our faculty members. And I met with every tenured faculty member, one on one, and I met with the assistant professors in small groups. So to give you a sense of the scale, it's we have about 105, tenure tenure track faculty members. And that was so helpful, and and I love reading other people's research and trying to understand the connections. So it was helpful in understanding them it was helpful in, in signaling my interests and manifesting my interest for their research in an unexpected benefit is I was able to notice connections among our researchers, that even our researchers were not aware of. So for example, when I did that, at that time, they were 18 researchers, what published 46 papers about diversity, inclusion, belonging, and there was more than at least one in every subject area. And while people knew that there was some interest on the school, no one had realized that, oh my gosh, this is such a big deal for for researchers. So that was, I would say, an observable priority. If you had followed me, during the day or evenings and weekends, you would have noticed that I spent a lot of time understanding data in particular our finances, and that I don't know how it will have been in the US but that's, that's part of being the CEO, right is no one else is accountable to the board about our finances, and there is no divide As chancellor for administration, for example, any services to onboard me and, and give me a framework and, and so I spend quite a bit of time understanding. And then from there understanding what are the the key financial indicators that are going to matter to me that I want to follow? And how is it that, for example, I quickly shifted the way we we report our finances because I wanted to have a report that makes sense to me from a strategic perspective. Right. So you will have noticed that if you followed me around, and that I think would have been different in the US, because in the US, hopefully, I will have been within an existing framework and universities that that already is on top of that. And at the same time in the US, probably, I don't know, if we would have had the freedom to myself, we design, how is it that we want to report our finances, to our governance, like I do here?

Dave 5:49

Price, while you just mentioned a moment ago, your board? Could you tell us a little bit more about your relationship with your board? I'm presuming they have a fiduciary role, and they're not just an advisory body to you? Are they the ones who, for example, hire or fire you? Are they assessing your performance periodically? And if this is the case, how does faculty governance interact or interface with your duty that you would have to the board? So let's

Francois Ortalo-Magne 6:23

start with the board. They because this is you put your you open a big kind of warm? So great question. Well, let's take it to another time. So let's start with the board. Absolutely, thank you. That's a big difference is in the US context. I had an advisory board. These were people were there to sit with me. I picked them. They all volunteers, all committed to the school and here to help us advance and sharpen our plans in advance our mission, live up to vision. Here in London, the bodies is the so called the governing body. It is a fiduciary board. And yes, I am their CEO. So they are the ones who hire me. And the ones who can fire me and the ones to whom I report to do manual evaluation. Absolutely. That's exactly like being the CEO of any other not for profit organization. On this board, I do have a number of external members who are picked the usual way by nomination Governance Committee. And then I have three faculty members elected by the faculty, one staff member elected by the staff, the students association president elected by the students. And then the President of the Alumni Council, was elected by the alumni councils themselves are designated referred by by the alumni, or so. So it is a broad and diverse board. And, yes, I present to them every year, my budget and my plan for the year ahead in the years ahead. And every July, I better get my planning budget approved for the next year. And that's very different than the US environment.

Dave 8:08

How much time do you devote to managing and thinking about your board, I presume it's much more demanding compared to when you were at Madison.

Francois Ortalo-Magne 8:19

Lot More. At the same time in medicine, I spend time with my Provost, my different vice chancellors and Chancellor. And so so in the NIT, if you add that up, then I don't know that it is so different. Also, because here I have what in England, we call a school secretary with someone who also as a as a direct reporting line to the board and the chairman in the reporting line to me, but who helps me manage the relationship with the board? Clearly, the pandemic created a lot more involvement opportunities for the board. So what I would say maybe, so in terms of quantity of time, I don't know how to answer but what I can answer is that it's a lot more structured. Because it's, it's a formal board who with members who are members of other formal balls. So to give you a sense, it just stepped down as it happens at the end of stepping down the end of the month, but the chairman of my finance committee, was the chairman of the board for the Bank of England. Yeah, but my deputy chairman is also on the board of Philips, the chair of my audit and risk committee is also at audit and risk at HSBC. So it's the same type of interaction so it is far more it is structured within the way that I find so helpful. To give you another window into this for example, we do have external auditors and internal auditors, and they provide their formal reports to the audit and Risk Committee, and I am familiar comfortable for the progress. So first of all, did they find and things that didn't work. And then when they did, did we progress the thing that that they identified? Right. So I don't know as much about the time but is much more structured, and very helpful.

Ken 10:13

So that's very interesting talk some about the board's relationship with you relative to mobilizing vision, whether it's resources, constraints, challenges. So how does that come into play?

Francois Ortalo-Magne 10:33

Okay, so maybe the first element to say, and my deputy chairman was saying last night, actually, is that they are a fiduciary board, first and foremost. And as long as management, we do our job properly, and the information flow to them is appropriate, then the fiduciary dimensional their job is actually no, so time consuming. I mean, and by the way, they do read the papers, right? I mean, this is, you know, we could be sending 500 pages, they read them, and they comment, and but you know, last night was a formal meeting where we approved the financial statements for last year. And that approval took five minutes. Why? Because the work was done, the auditors come through and, and so and what what actually deputy chairman was saying last night is how we appreciate that management is doing such a great job, that then we have time to engage in how is it that we can be helpful as board members? That's the first thing to say, and then how are they helpful when there is very heterogeneous group of people and the listener might want to go on our website to get a sense of that heterogeneity. But different board members will have a different expertise, perspective connections, and then they will help out. So. So to give you concrete examples, there was a moment where we had to solve some complex rearrangement of some pension scheme that we have here to school. But a good example of something in the US I never weighed about as a as a team. But they someone was on the committee, the audit and risk committee with a pension expert, is was there to help when, you know, in July 2020, so the tough time in the pandemic, I went to the governor's they say, look, I want to create a space for the school to, to be able to innovate and to breathe and to, to explore, create, scale, the ideas that will define our future, and not be so focused on the immediate. And then a number of them go together, and they give us one afternoon times, just go go and go and do what you think is best because yes, institution we agree, needs to just get out of the urgent on a on a day to day basis. We just launched a fundraising campaign. It's one of our board members said, I'll be the chair. And and he's been with me at the launch event. So you see what I mean, it's like, and we do think about that when we constitute the board. I mean, we clearly had to fill positions in the nomination Governance Committee, remuneration committee audit, and risk and finance where you need expertise. But then we also think about the different supportive expertise that we need in our job as management is great job with the fiduciary aspect of it. So we don't spend too much time approving the financial statements, or this or that regulatory report, and we can really engage with them about so how is it that we help progress the organization?

Dave 13:32

Press? Well, you touched on philanthropy just a moment ago, compare and contrast just a little bit? The approach you feel you need to take in the UK versus the model you pursued in the US? I was under the impression perhaps it's outdated, a bit, but that philanthropy in Europe is a little bit of an uphill struggle?

Francois Ortalo-Magne 13:55

It's a good question. And it's easy to look at it as an uphill struggle. For example, our campaign that we just launched, I think, is ambitious at 200 million pounds, you know, Washington's campaign was 1 billion. But then then let's let's think about exactly the relevant information here. First of all, lbs like many of the schools were very young, and very small. You know, our first case was in 1968. There were 40 students. I know that in 1993, with the alumni who graduated in that year, we are just about 1500 Alumni total total. 60% of our current alums graduated after the year 2000. So it's very small, it's very young. In total, we have about 50,000 alums. So it's very young, invisible. Second, and that's only like the interesting two Dean's in the US who grumble about all the money going to the sports teams. You know, At a university like Wisconsin, there's a lot of money that goes to the sports team, because it's one of those schools, that's good, that wants to be good. And that is pretty good that at all the sports, right? football and basketball and hockey, and then you can even add more sports like volleyball and whatever. Yeah. But here's the thing I've learned coming into the, into the UK, is that these sports teams, they make you relevant to your alumni population on a weekly basis. Right, on a weekly basis, there is some warm glow being cultivated, between your university and your alumni population, they stuff to celebrate this stuff to engage emotionally. And I must admit, I underestimated the power of that. When I was in the US, I was maybe a bit more focused on the fact that they're all this business, Allah, and we're giving all this money to the athletic departments, like, Could we get a bit more in the business school, but they underestimate the power of having that regular flow of university engagement, that maintain this close together? Right, they are a bunch of bars in every major US city that keeps getting the people together. So that underestimated the translation of that is in place, we only a graduate program, right? That one glow loyalty to my mother, it is not something that that really emerges as merge, and it gets cultivated by someone else, like the football team. What I find really interesting, however, is if you think about fundraising, not so much as a sales proposition, you know, here's a scholarship for that amount of money, you get that type of a student, you get an annual thank you letter, and we'll invite you to a dinner and if you give more money, you'll get more scholars and the dinners with the dean or whatever. Yeah, you have to shift from that sales perspective to an opportunity that that is an imperative here, which is available in the US as an opportunity is too much more of an impact investing mindset. Like, we have a strategy, we have a plan. And we want everyone to play their part, because we want to move fast. Will you invest an investment in the school is an investment in you and our future together? Here are the KPIs that will demonstrate that we are delivering for your investment. Right. And that I know from experience is a strategy that is available in the US. And that is more likely to help with you know, the people who are giving in the hundreds giving in the 1000s. And in the 1000s 10,000. And maybe instead of people giving up to a million. And for us within the young community, we have a very successful business leaders, I believe in that approach as as an imperative. And I'm seeing really good results that are very encouraging or people stepping up and saying, Yes, I have long term equity in the school. And that's why I'm going to invest. And that is particularly helpful here. Because we are an independent, we are a school in our own right. And so so in London, I can really make this case, in the US to truthfully make this case, I would have wanted a chancellor with a certain degree of explicit commitment, about leaving the money at the business school and not increasing the tax rate on the business school, when the business could increase its income.

Ken 18:26

Take the concept of impact investing and extend it to the impact to do good in society. And you know, we've known you as a big thinker, as a very creative, big issues person. And of course, impact has become increasingly important in management education in general. I mean, this last week, there was the front page of the business section, article in The New York Times really sort of elaborating on everything from ESG to social justice to Dei, talk about your vision for impact to do good and sort of what are plays out your role at lbs

Francois Ortalo-Magne 19:17

so let me start with a very concrete example that that gives you a sense of potentially difference US UK, although I believe within the US there is heterogeneity that might be of interest to different American Dean's. There is a foundation called the Laidlaw foundation set up by Irvine Laidlaw because he wants to break the glass ceiling and enable more women to reach positions of leadership. And, and for a while he'd been giving scholarships in the US. But the way the process was working in the US, he realized that the women getting his scholarships. There were women who were already in the pool of applicants to business school and the scholarships were being used for Marilee to help effect which business school they go to. So it was that that's not the impact I want to have, the impact I want to have is give women access to world class business education, to help promote more women against a glass ceiling and break it. So So actually, as it happens, one of the schools where he was giving this donation, the Dean was very nice to us saying, you know, at lbs, they are independent, and there might have more power to actually affect change the way you want to, to go and talk to them. And, and he came to us, and we listened to him. And we said, look, we are interested, because we too, you know, I mentioned earlier, so many researchers doing research on diversity, inclusion and belonging, say, you know, we want to help break that glass ceiling. And the agreement we came up with is that for three years, he was going to give us 1.2 3 million pounds, to give scholarships to 20 women, you can do the math, it's a lot that women, but only three years, because he said every year I'm going to come. And I want to hear the stories of each of these women. And I want to know, did my scholarship, enable them? The world class business education. Without it, they wouldn't even dream about it. And we pass the test with flying colors, is one of my most enjoyable meeting every year. And I've done three, I sit with him in the cov Foundation. In some colleagues, we have the 20 women around the table and each tell their stories, you know, and women from Zimbabwe, when she was young, there was not there was not enough money for basic necessities. But somehow she her parents were so committed to education, that she was a star pupil. Somehow one of our alums have about the story helped her apply. And two of them said, we're going to pay for it. And now she's on the internship program with Morgan Stanley or mentorship program was Morgan Stanley, to get into a career for impact investing. In that you see it actually interesting enough, it's not an alarm. But this is Donald comes to us and and say, Hey, maybe you guys can actually help me achieve my objective. That's why by the way, there is no excuse. I'm the CEO. So if we say yes, well, then let's do it. Right. But at the same time, I'm the CEO, when he shows up once a year, it's like France, what did you deliver? Right. And as it happens, we hired someone to identify these women by now we have established great partnerships around the world to have a pipeline. And I guarantee you that we find every year 20 women, and more, who never dream about world class business education. And if I were not getting the job I want is the job of the colleague who makes the call to say, Have you thought about an MBA at lbs? and say, Are you kidding me with an acronym, we'll pay for it? Or not, as with the Laidlaw foundation, so that's that's one element of impact. Right there, right, that's like one life at a time. I'll give you another element of impact, which is mean so many more lives at once, if we decide to position ourselves in exec ed, as the Prime partner, for ambitious organizations, on the transformation journey, because something that's very important to understand about my job here as well is I don't have an endowment. I don't have an undergraduate program. I don't have a university, I don't have a big government behind me. And I'm sorry, I say yes, I say I because I take very personally, the responsibility of getting money on the table to make payroll every month. Now, we don't go month to month, but there is no one else finding us. And so what's the secret to deliver world class graduate business education is we do a lot of excellent. And when you do execution, you get to perform because if you don't deliver impact, the clients don't come back. Right? So actually, that that has a big impact. I believe on our culture, as it happens, our faculty better be good, not just doing research, but being able to drive impact. And so there we have organizations where we touch the whole organization like 10,000 people in helping transform this organization by becoming more consumer centric, more data oriented, more diversified, you name it, but that's not the way in which we are impacting in there. There is a big commercial driver because, you know, HSBC Nestle dawned on you know, Microsoft was Royce, they don't come here. If we don't have impact, these are commercial decision. We don't have a monopoly, and it's very competitive. And we find the same world class business could against us competing and and we win and sometimes we lose, but, but that you see an amine impact right there. And then the third piece, I would say is that, like many business school, we have alumni and donors who are very generous. They'll give you a concrete example will support impact initiative. So a concrete example is a faculty member. A lot of research on predictive modeling. If you read these papers, you guessed that he saved hundreds of millions to Dell, Zara and Amazon. So one from the World Bank heard about that. And long story short, he got our colleagues to design a data collection system and predictive model that is now saving lives in Zambia, because he improved the supply chain for malaria drugs. Amazing. Yeah, and so so because the thing with malaria, I'm not a specialist, but what I understand is, what's important is you take the drug when you need it. And so if you're able to predict when the drug is needed, even if it takes time to get it out there. And by the way, it's important because typically, you need it when it rains a lot. And when he rains a lot, it's difficult to get the drug there. So you can have a predictive model of when the drug is needed, you can ship it in advance, and then you save lives because people have the drug when they need it. So that's a that'll be a third story of what great stories

Dave 25:54

and and how rewarding, that has to make you feel. I have just one final question I wanted to ask. We've covered a lot of ground today. But if you were to point at just a few kernels of advice that you've picked up in your years, at London Business School and leading in the UK, what might those one or two kernels of wisdom be for the rest of us?

Francois Ortalo-Magne 26:25

Let me go back to something we started with is being clear about whom do you serve? And I would say it's important as, as an institution, and as yourself, whom do you serve? Because there's going to be moment. You know, Dean, CEO, not CEO, doesn't matter, there's gonna be moments where there are some really tough decisions that you have to make, and at least at least my experiences, if I can go back to some deep principles like that, then at least I can sleep with my decision, right? Because I know where it came from. There's another element that in all of us in those positions, I think it's true for everything. There's a big dimension of why we do this job is for altruistic motives. We are the kind of people who enjoy creating a platform for others to thrive, right that, like, we'll give up our own teaching our own research, because we get some enjoyment that others doing it. And maybe that's the way in which we have more impact. But I I think it's important to also be really clear about what's my selfish motive in here. What is it? That, that, that I'm after that that? What is it in there that that's for me? Right? Because again, there are times when, when it's important to note, and by the way, there are also times when you want to celebrate with the other. So maybe the third thing I would say is that, at the same time, it's important to understand what's in it for you, and that there's so many things that it's only about you, because it's only about you taking your full responsibility. The fact is, it's also never about you. And that job is about navigating that contrast. Right that, that in the end, I think it's true at every levels of leadership, right? You want to be effective, you got to take full responsibility. It's about you in new decisions and new actions. And at the same time, this is interesting tension is that you're part of a bigger story. It's not your story. And how do you navigate that? And I think spending time to ponder this certainly has served me really well.

Dave 28:40

What greenbacks.

Ken 28:43

So we've made today's conversation about you, and you've made it much bigger than just about you. It's a it's a it's a big conversation. We really appreciate it, Francoise, we'll have to have you back to have another conversation about one of maybe 12 different topics that we could explore here. But in the meantime, this is a wonderful conversation. We really are. Appreciate your involvement in this discussion.

Francois Ortalo-Magne 29:11

Well, thank you very much a pleasure for me to

Dave 29:15

what an impressive conversation that was, Ken.

Ken 29:19

Yeah, really fascinating. You know, we really could have taken any one of a dozen topics. He's so so thoughtful, so experienced across, you know, multi dimensional kinds of institutions. So, you know, and it's compressed into a dozen or so leadership years, really a lifetime of experience, very, very informative. And he thinks so. inclusively.

Dave 29:50

I was taken aback by several threads in our conversation. For example, you know, towards the end of our conversation, he talked about Israel All asking. And I think he used the word, you know, he was enabling others to thrive. And that, that's almost the epitome of being a servant leader. I always used to liken it to being the coach, you really need to be open to being off of the playing field, not scoring the points, but actually on the sidelines, where you are getting your emotional gratification by helping others succeed. And it's such a, such a, you can bring that perspective to your job. Personally, I was also impressed when he talked about this notion of with respect to philanthropy, this notion of investing that that he was he was approaching his donor population with this notion of join us, as an investor in this organization. Even use the phrase KPIs or key performance indicators, what he was, what I took away from that was, he's saying, hey, we need to deliver results. And I found that such an effective way to raise money. Yeah, I used to, I used to joke, we still do that. There are very few donors left in the United States, almost all of them are investors. And we trained them to think that way. If you if you bring that mindset and being down to your philanthropic efforts, it's, it can be a very effective, what are some of the other things you saw?

Ken 31:51

Well, you know, interesting, I thought that one of his really interesting angles in is was it very practical solutions to complex problems. So for instance, you know, one complex problem might have been becoming embraced by his faculty. Now, the idea that he read two papers for 105 tenure track faculty, and maybe more, you know, my math tells me that's over 200 papers that he was able to read and apparently digest and apparently use as a basis for one on one relationships with with his faculty. That's a that's a very practical solution that took a lot of work. A lot of perspiration. I think the same was true for the impact investing idea. That was it was a it was a simple solution to a very complicated problem.

Dave 32:57

You know, and of course, the other thing that could help out that last conversation, but the sheer span of control that he has, deals with that so many of us have dealt in the Risk Dimensions. I was at INSEAD a couple of years ago in INSEAD has a similar structure. Outside of yours, they are a standalone institution. The building and grounds people can point protection to the dean. They INSEAD actually had a nurse on the staff. I mean, these are things that he just so many of us don't think about. It comes with benefits. And it also comes with burdens. And it was just fascinating. Things about that. Appreciate him sharing.

Ken 33:51

Yeah, it seems that he adapted very quickly to that more entrepreneurial perspective of being able to fail quickly. I mean, celebrate your successes, but also fail quickly, which is, you know, sometimes different than you see in the academy where things fail, or, or slow over longer periods of time.

Dave 34:19

Well, what a great interview, Ken, thanks for this one. Good.

Ken 34:22

Yeah, thank you. Good, really, really great, great discussion.