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Winter 2002 CalBusiness  
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The Tyson Years
Interviewed by Cal Business Editors

As Laura D'Andrea Tyson leaves the deanship after three and one-half years, the Haas School of Business is stronger, larger, and better positioned than ever before. She has presided over major changes in the school's relationship with the central Berkeley campus, a significant expansion of the school's academic programs, and large-scale improvements to its programs and services. Moreover, the internationally known economist has brought flair and an increased level of activity to the Haas School that helped produce a higher profile throughout the world.

In an interview in the weeks before she left - temporarily, as she says - to become dean of the London Business School, Laura Tyson reflects on her time at the Haas School.

What is the state of the Haas School of Business as you prepare to leave at the end of 2001?
I think it is fair to say that the Haas School is stronger than ever. And while many things have changed for the better over the last three years, this state of affairs really represents a great deal of continuity. The Haas School has been on an upward trajectory for over two decades - spanning the deanships of Budd (Earl) Cheit, Dick (Richard) Holton, Ray Miles, and Bill (William) Hasler. Throughout all of this time, the basic mission has stayed the same: an unwavering commitment to creating and maintaining one of the very best business schools in the world.

And on every measure, we can point to successes and improvements. Of course, we face some significant problems and challenges; but on balance, we are reasonably well positioned for the future.

I really want to emphasize "we" here because of the community and team-oriented nature of this institution. We - collectively, including students, faculty, staff, and alumni - can take pride in the changes and forward movements that have developed at Haas over the last few years. There is so much incredible energy in this school! This has certainly been noticed at UC Berkeley, where the Haas School has become a model of innovation for the campus. And all this energy has helped to create a higher profile for the school in the world.

How can the school achieve its goal of being among the best worldwide?
It all comes down to outstanding faculty members, outstanding students, and outstanding staff members. As dean, you think creatively about how you can keep these assets in place and attract future assets, but you don't alter the fundamental mission or the fundamental need to have top-notch people. In fact, I believe that there will be continuity going forward at Haas because of the community's shared vision of the kind of school we want this to be.

What do you consider to be your major accomplishments?
To answer this, I need to go back in time. First, I agreed to become dean because I believe that the University of California Berkeley is one of the world's best universities; I have been blessed to be associated with it for so many years. Second, I was certain that Berkeley wanted and should have a preeminent business school. However, I also firmly believed that this goal was in jeopardy because the campus was not giving the school the flexibility to do what it needed to do vis-à-vis its competitors among other top business schools - in terms of attracting faculty, establishing research programs, establishing new academic programs, and so forth. I became dean only on the condition that I could work to establish a new set of relationships between the school and the central campus. Without this flexibility, we would have lost ground to the competition over time.

This issue was well understood by my predecessors in the dean's office. I was lucky enough to come in at a moment when this change became possible, in part because we had a new administration at the central campus level.

And the result?
We successfully negotiated what is now called the Chancellor's Pilot Program, which gives the school significant discretion, particularly in the area of faculty recruitment and retention. With the help of (Interim Dean) Ben Hermalin and others, we managed to use this discretion to offer market rate salaries to Haas faculty members, and to attract talented new faculty through competitive salaries. While we can now pay market rate salaries to faculty, we are required to use the school's own money - that is, we don't have any state funds for this purpose. This discretion has come with a price: the need to develop our own resources. And this is what we have been working on.

How is the school planning to raise additional revenue?
We have had to think strategically about how we could generate additional resources in ways which would not undermine the excellence of our existing programs and services. In the process, we have come up with some new academic programs; one has been launched and two others will begin in 2002.

For example, last spring the school successfully launched the Master's of Financial Engineering (MFE) Program, a one-year program with market rate tuition. Actually, the Berkeley finance faculty, which is one of the most outstanding finance groups in the world, came up with the MFE idea more than a decade ago. Unfortunately, campus approval for the program was stalled for years, while in the meantime other schools launched similar programs. When I became dean, we worked hard to get the program approved, with the rationale that it would generate new revenue, as called for under the Pilot Program.

And then thanks to some very talented people who are staffing the program, the MFE's first year has been a tremendous success. It attracted students from around the world who are greatly above our expectations, in terms of their number and quality. Moreover, the program has generated benefits for the school by increasing its visibility in the finance world. If you go now to the major finance firms, you find people who know about this program, including some who have been actively engaged in developing internships for MFE students. Now the Haas School is on the radar screens of these firms.

What are the other revenue generating plans?
One is a Saturday-only cohort of 60 students being added to our long-standing Evening MBA program - which we now call the Evening and Weekend Program - and the other is the Berkeley-Columbia Executive MBA Program.

We've known for some time that many of our Evening MBA students are facing increasingly difficult commutes at the end of the workday from the Silicon Valley to Berkeley for their evening classes. It was clear that we could serve more students - and serve them better - if we could find a way to let them choose to take classes on Saturdays; our objective is as much customer satisfaction as revenue generation. In addition, we will also be offering at least some of the classes in Silicon Valley, bringing the program closer to home for many students. The Saturday program debuts in August.

There's clear evidence that an expanding part of the MBA degree market is among fast-track executives who are in the ten year-plus experience range, and who are working full-time and don't want to quit for a full-time MBA program. My colleague (Associate Dean for Instruction) Andy Shogan has led efforts over many years to begin an Executive MBA program at Haas to serve this market. Given the workload of our existing and other new programs, we concluded that the only way we could mount this kind of program is with a partner. In Columbia Business School, we found a partner really skilled in operating successful Executive MBA programs, and one is that is complementary in a number of ways, including geography. The program is being marketed nationwide, and will enroll its first class in June. And just like the MFE Program and the Weekend Program, the objective in launching the EMBA program is to achieve both revenue and reputation enhancement.

Are there other accomplishments?
When I became dean, I was surprised that the school's non-degree executive education efforts - such as custom programs and two- or three-day courses - were small and were losing money - in contrast to most other business schools where similar programs generate huge amounts of revenue. One of the first things we did was to put in place outstanding leadership to turn around our failing efforts. To give a sense of how well we've done, Haas is now among the top ten US providers of custom executive education; and last year the program generated a seven figure amount in net revenue. This kind of achievement is made possible by a great staff and leadership at all levels of the school.

In fact, one of the things I am most proud of is the really talented staff that we have been able to put together over the past few years - people who are intelligent, energetic, and committed. The staff is committed to the students, committed to the quality of the academic programs, committed to the university, and committed to constantly improving the programs and services that they manage. For example, the school undertook a huge effort to expand and improve services for our students, such as the Career Center and the Computing Center. Working as a team, the staff has brought about real change and improvement in every area of the school. I have said many times that despite having a budget that is significantly smaller than our competitors, the Haas School, because of its staff, has been able to implement at very high levels and keep us in the race.

Would you also add reform of the MBA core curriculum as an accomplishment?
Yes, it is almost finished, and should be rolled out next fall for the incoming MBA class. Both students and faculty have been in agreement for several years on the need to make changes in the MBA core curriculum - especially to reduce its size. But it was extremely difficult to find a model that would bring enough people together. I acted as a facilitator to help find a way to do it.

When you change something as fundamental as the core curriculum, innovation will increase as a consequence. This is important. And there are lots of benefits, including the main one that MBA students will ultimately have greater flexibility to choose electives early and build a program that is a little more tailored to their specific needs.

What do you think about business school rankings?
During the time that I've been dean, one very healthy development has occurred. Because there have been a growing number of rankings, we now see competition among the rankers. As an economist, I believe that competition is always good; over time, it will cause the rankings to improve.

Business schools can be measured in different ways. They can be measured in terms of recruiter sentiment, in terms of quality of the faculty, or service quality - how many staff members do you have in the career center per student - and so forth. All of these are valid ways of looking at business school performance and no single ranking really looks at all of them. Over time, everyone will learn more from the rankings by looking at the alternative measures.

We've tried to learn as much as we can from the different rankings and then make changes accordingly. For example, the major expansion of our MBA career services was the result of information from the Business Week rankings. The significant changes in the MBA core curriculum came also came, in part, out of information from the rankings last year, prodding us to move forward on reform.

What have you learned as dean?
I was surprised at the intense involvement of the MBA students and what this means to the life of the school. Some of the best things that have happened at Haas over the past three years were begun as student-run activities, such as the two business plan competitions. I take no credit for these things; I just responded to the energy of the students.

In a very short period of time, we went from having no business plan competitions to two - the UC Berkeley Business Plan Competition, and the National Social Venture Competition. The UC Berkeley Competition, which is run jointly with the engineering school, with a lot of participation from the rest of the campus, has already emerged as one of the major business plan competitions in the country, in terms of number of entries, size of prizes, and visibility.

The National Social Venture Competition is a national, as opposed to a Berkeley-level, competition; that is, business schools from around the country send teams. This was a Haas innovation; Haas MBA students that came up with the idea of developing a business plan competition with both for-profit and social-objective bottom lines. In just two years the competition has evolved into a partnership with the Columbia Business School, which is now funded by a very generous gift from the Goldman Sachs Foundation. The ideas and the implementation rest largely with the students. And now the activities have achieved enough recognition to bring in revenues from the community to make them self-supporting.

Any regrets?
My biggest regret is that I didn't find an individual donor that would be willing to give the school $30 million or more. While the Haas School has successfully managed to increase donations from alumni and friends, a major gift of this size would certainly shore up the endowment and allow us to compete more effectively with rivals like Stanford and Wharton. But this kind of fund-raising takes a lot of time; there is much more work to do.

What advice would you give your successor?
I am optimistic because the Haas School has good support at the campus level and at the UC System level right now. And that's important. Second, the students are great; the school has a strong advisory board of business leaders who are eager to help the school; and the number of committed alumni is at an all-time high - that is, Haas alumni who support their school as volunteers, with their ideas and time, as well as with annual giving and special gifts. As I said, the energy of this place is incredible.

With that as a backdrop, I also have some specific advice. Number one, fund-raising will need to grow as a priority in the next several years. If I were staying, I would devote much more of my time to development activities. Two, because the school has introduced several new academic programs, the new dean will have to spend a lot of time making certain they are implemented well. Three, the new MBA core curriculum will produce a period of stress because some things may not work out as intended; the new dean should get actively involved to make sure things go well overall. And finally, there is the need to continue as aggressively as possible on the faculty recruitment and retention front. This is critical.

Why did you decide at this point to leave Haas?
Although I am the resigning the deanship, I do plan to return to the Haas School faculty; I will be on leave while in London. So in a sense, I am not really leaving. I left Berkeley three times in the past - to MIT, Harvard, and Washington - and each time I returned. My original commitment as dean was to remain for at least three years; when I leave, it will have been here three and one-half years. I would have stayed for a full extra year if the London Business School deanship had not come up.

The reasons for my departure are personal: I was offered the possibility of fulfilling a long-held dream of spending a few years in London, and doing so in a way that I believe will enhance my skills as a professor and university administrator. In addition, my husband (Eric Tarloff) and I talked about moving to London for a very long time; in fact, Eric grew up in London. When I was offered the deanship, Eric said, "I never thought you would actually come up with a job offer that would lead to our moving there."

Do you see any possible connections between LBS and Haas?
I would really like to make that happen. I already have some ideas!

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