Interview Ten years ago, Jeffrey Garten was brought in to turn around the Yale School of Management. Did he pull it off? Hardly Academic JEFFREY GARTEN IS NOT RETIRING this month as dean of the Yale School of Management. Rather, as he prefers to put it, he is step- ping down from his academic post. “Retiring” is probably the wrong word to apply to Garten any- way, nor can he really be classed as an academic. He’s only 59, and he’s already “stepped down” from two previous careers—in government, where he held senior economic and foreign-policy positions in the Nixon, Ford, Carter, and Clinton administrations; and before that, thirteen years on Wall Street, at Lehman Brothers, where he built up the firm’s investment-banking business in Asia, and at the Blackstone Group, where he worked on M&As. When Yale brought in Garten in 1995, he faced a troubled MBA program. Actually, Yale didn’t offer an MBA degree but, rather, an MPPA—Master’s of Public and Private Administration. “Very shortly after I got there,” Garten says, “I changed the degree, as a symbol that we were not going to straddle—that we were going to be a business school. That was a big deal because many in the alumni body and at the university thought the MPPA distinguished Yale from other MBA programs. Sure it did, I told them, but we live in a world where sound bytes count a lot, and if you have to spend time explaining your degree, you’ve already lost the argument.” The initials of the degree was hardly the only issue facing the new dean. Because of its reputation as a public-policy school, the Yale School of Management was disparaged as touchy-feely—as “15 Lousy Years.” No planes have flown over the Yale Bowl during even being an “anti-business” school. Garten’s predecessors had Garten’s tenure, certainly a good sign but hardly the last word on roiled the faculty and graduates to the point where, in the early whether he has turned around the Yale business school. 1990s, unhappy alumni hired an airplane to fly over the stadium Across the Board editor A.J. Vogl thought to ask the dean him- during a Yale-Harvard football game carrying a banner that said, self during a visit to The Conference Board’s New York offices. Three years ago, your book The Politics of new enterprise. Rarely does it ask the ques- to how business leaders see them- Fortune argued for the need to make busi- tion, What does society require from its busi- selves or how schools are educating ness education more relevant to the post- ness leaders?” Is business education asking students. But to answer your ques- 9/11, post-Enron world. “Most business edu- that question more frequently? tion: Are business education or busi- cation,” you wrote, “is centered on what an I can tell you what I think society ness leaders living up to what society ynse individual must do to succeed, whether in needs from its business leaders, but needs? My answer is definitely no. In climbing the corporate ladder or in starting a I don’t think that has any relationship the corporate world, the pressure to James L A CROSS THE B OARD M AY/JUNE 2005 47 Interview be very narrowly focused on short- term considerations has escalated, if anything, since 9/11 and in the post- Enron era. The possibility of CEOs taking their eyes off the nitty-gritty of running the business is far less than it used to be. So any discussion that somehow business leaders ought to contribute to public policy or assist in community development or any- thing like that is more remote than it was in the past. And when it comes to business education, for better or worse—and I think for worse—business schools are followers, not leaders. Typically, business schools hold their finger up to the wind and ask, What do our cus- tomers want? They have two kinds of customers. One is the people who are doing the hiring, and the other is the students. I happen to think that’s a pernicious concept—the idea that students are customers—because it assumes that students know best what kind of education they should have. But that is the culture in most business schools. In that book, you also recall the Committee for Economic Development of the 1940s and the corporate leaders of that era, lamenting that we don’t seem to have their counterparts today. Walter Wriston, whom I interviewed lash against the new regulations. the question, What is an MBA worth? Is the recently, made the same point. Do you see Now, admittedly, some of those reg- attitude exemplified by that question in- any prospects for that changing? ulations are really imperfect. evitable and unavoidable? No—not that I wouldn’t like to see I think so, because unlike law or it change. The time for change would Like Sarbanes-Oxley? medicine, you don’t need the degree have been right after 9/11 and after Yes. Sarbanes-Oxley was passed to enter the field. People don’t ask Enron. Those two events together very quickly, and there are a lot of that question so much when they created an entirely different environ- rough edges to it. But it was ex- earn a medical degree, because they ment, one in which security meant a tremely important, a real milestone have to have it in order to be a doc- lot more to citizens. At the same time, for our government to be able to ac- tor. They have to have a law degree it was an environment in which trust tually pass that kind of legislation and pass the bar exam before they in business was demolished, so if with the speed that they did. And can practice law. But in business there ever was a time for business surely there are some modifications you don’t need this degree—indeed, leaders to show some kind of states- to be made in it, but business leaders some of the most distinguished busi- manship, that was it. They have been who are griping that we are over-reg- ness leaders are engineers or scien- very slow to develop any kind of ulated have a very short memory as tists, or don’t have any degrees, or partnerships with the government to the weaknesses in the system that haven’t even gone to college. when it comes to security, and in were revealed by Enron and that con- So I think it is a very rational ques- terms of corporate governance most tinue to be revealed to this day. tion for a young person to ask about companies have been dragged kick- the return on an MBA degree. But ing and screaming into the post- Let’s talk a bit about those whom you reluc- getting back to the idea of customers, Enron era. And I think we’re already tantly characterized as the customers—the over the last fifteen years there have beginning to see a very strong back- MBA students. A lot of attention is paid to been a lot of ratings of business 48 M AY/JUNE 2005 ACROSS THE B OARD schools, and these ratings are very State to compete with the student leaders will be making crucial deci- akin to customer-satisfaction ratings. from Harvard, and in many cases the sions at the intersection of bioscience You’re basically asking the students, differences might not be as great as and business. Where are they going How good was the experience? That you might think. And that would to get the knowledge and experience presumes that the students know force schools to make sure their grad- to make those decisions? what it is that they should be learn- uates had the fundamentals under In other words, I have an exalted ing, or whether the environment in their belt. Of course, there is not a view of the possibilities of business a particular school is better than prospect in the world of this hap- schools. I just don’t think too many another school that they never at- pening. people share that view. tended. And that attitude really un- dermines the notion of education. If I was going to ask whether you had advanced You’ve enumerated some of the many you don’t believe that the educa- this idea at all. changes in the great world over the last ten tional institution and the professors I haven’t, but it’s been in the air. years, but what about the MBA students know more about the learning pro- The idea that I have advanced is that themselves? Are they different today than cess than you do, then you shouldn’t of a three-year business degree. when you first arrived at Yale—sharper, bother to go to the school. The no- When you look at how the world has smarter, better? tion that these are customers deflates changed—the massive impact of They’re much more savvy when a lot of quality; if professors are con- globalization, the fundamental re- it comes to information technology. stantly rated on how well the stu- vamping of corporate governance, Ten years ago, we had to have a lab dents like them and the course, then the growth of companies not just to teach some people how to use the rigor and challenge of the course across borders but reaching into the computers.