The Future of the Economy

Setting A New Direction

Dean Rich Lyons talks about the Haas School's distinctive approach to developing leaders

During his first year as dean, Rich Lyons, BS 82, has been focused on mapping a fresh direction for the Haas School of Business, capitalizing on its unique assets to build an even stronger school. CalBusiness caught up with Lyons this summer to discuss his vision for the school and its distinctive approach to developing the right kind of leader for an ever-changing business environment.

How have you been developing a new direction for Berkeley Haas?
Strategic planning has been a top priority of my first year as dean. We started the process by holding discussions with various constituents of the Berkeley- Haas community — including students and alumni. The faculty spent about five months looking creatively at how our Berkeley MBA core curriculum could be renewed, culminating in a unanimous vote in May on the first phase of improvements and new initiatives.

What is the plan for the school?
It all starts with our mission, which is to develop leaders and to produce pioneering ideas for all areas of business. While this is true for us, it is also true for most other top business schools — and it is undifferentiating. It’s therefore critical that we fulfill this mission in a way that is distinctively Berkeley. We can do that. And if we do it well, we can redefine the competition among our peers.

How do you differentiate Berkeley Haas?
The good news is that we have a set of deep assets that, taken together, provide all the requisites of a top business school but also effectively distinguish us. These defining characteristics provide a perfect foundation upon which to build.

What are the defining characteristics?
There are many. They all emanate from the big three, which we refer to as “Place, People, and Culture.” Place includes being part of Berkeley — its tradition of intellectual excellence is deep in the Haas School’s DNA. This means we are and will remain a worldclass research institution, in which our faculty continue to generate new knowledge and ideas. We are also part of the powerful global brand called Berkeley. The brand is a combination of scholarly excellence, cross-campus connectivity, and dedication to society’s deepest issues.

Place includes our incredible location in the San Francisco Bay Area as well — a business ecosystem of innovation and entrepreneurship that is the envy of the world. This fundamentally shapes the way we think and act at Berkeley Haas. It contributes to a prevailing spirit of innovation on campus. And we have worked hard to leverage these location advantages in our teaching and research.

In terms of people, one main aspect is that Haas has always been a good fit for individuals who have strong leadership potential and who excel in putting fresh ideas to work in their organizations. This combination of skills is what we have been calling Leading Through Innovation. It has been happening here naturally for many years. We see many of our alumni whose careers embody this approach to leadership. Now we are reshaping our curricula to deliver this brand of leader even more sharply.

We also have a highly differentiating culture at Haas. Some of the elements that really stand out include the fact that Berkeley Haas people do not accept the status quo. This is Berkeley, after all! Students here possess confidence, but without attitude. This is something we hear all the time from corporate recruiters; it’s important to why firms keep coming back. And our graduates tend to commit themselves to larger causes that have a positive impact on the world.

I noticed that you did not include finances as an advantage.
Actually, we have been growing stronger as a school because we have won some key financial freedoms from the university that allow us to compete with the very best business schools. This increasing financial selfsufficiency is helping shore up Haas this year as the UC system faces its worst financial crisis in history.

So how do you take advantage of these factors in producing a Berkeley Haas brand of leader?
Our strategy for doing so is vintage Berkeley: that is, great leadership starts with strong values, such as questioning the status quo and leading without attitude, and the ability to innovate. While we already attract students, faculty, and staff who subscribe to these ideas, we want to take it to the next level.

Going forward, we will more actively select for specific qualities that reinforce these values and culture. We also need to make holistic changes to our curriculum, but in the broadest sense of that word. This includes the totality of experiences that make up an education at Berkeley Haas, including non-classroom, experiential opportunities.

What are some of the curricular changes that will be launched soon?
Let me preface my answer by noting that we are starting most of these changes in the Full-time MBA Program. But we will introduce elements of this plan to all of our graduate and undergraduate academic programs over time.

First, we are defining leadership in a more encompassing way, to include strategic leadership, operational leadership, and people leadership. Second, we are redesigning and moving our course in Leading People to the first term so that students have a bigger picture, frame-setting opening to the program. Third, we are putting greater emphasis on topics such as managing flat organizations, leading through influence rather than authority, and setting cultures of innovation — all of which define the Berkeley Haas approach. We are also launching a new suite of leadership development experiences as part of a new approach to our non-credit curriculum. We think these opportunities really matter and flesh out what students learn in the classroom.

And we are developing a finishing component to the core MBA curriculum — a structured process for actually delivering innovation in firms. We envision as models already-existing programs such as our wildly successful applied innovation program Haas@Work, in which students recommend and then implement innovations within client companies. There’s also the Cleantech to Market program we developed with the Lawrence Berkeley Lab to commercialize ideas invented by scientists working in the alternative energy area. We will take the best of our experiential learning programs and scale them to make them available to all students. This culminating project will be deeply differentiating and not easily matched by any other top school.

Why is all of this important?
The key to succeeding in an ultracompetitive global business environment is to be different in the marketplace, usefully different, and this happens through innovation. Sameness leads to commoditization, and firms don’t profit if they are doing the same thing as their competitors. Firms today desperately need leaders who can encourage and implement fresh ideas across their businesses. Berkeley Haas has always been good at producing this kind of leader. And we are determined to get even better at it.

And we are aiming to educate women and men who can bring these leadership qualities to every level of an organization, from entry level to CEO.

There has been much talk whether business schools are to blame for the global financial crisis. Does Berkeley Haas provide a moral compass to its students?
Business schools definitely have to take stock and examine whether or how they contributed to the crisis. In our own case, I think we have been building a culture of leading responsibly — and of course we should do more. Our culture embraces a strong ethical framework and socially responsible business. And it goes beyond that: Take our value of not accepting the status quo. I would hope that a Berkeley- Haas graduate would feel compelled to speak out when things don't look and sound right on the job, even if it’s always been done that way or everyone else is doing it.

Clearly we can’t guarantee that everyone from our school will behave with high standards in every case. But selecting people who resonate with our values and culture in the first place, and then emphasizing these ideas everyday when they are here will help produce grads with a strong moral compass.

Before becoming dean, you were chief learning officer at Goldman Sachs, responsible for leadership development of the firm’s most senior members. What did you learn there?
Goldman Sachs has always had a widely admired people leadership development program — how you get results through others, how you delegate, how you have difficult conversations, how you motivate your people, etc. But the firm was interested in thinking about other aspects of leadership, such as how leaders drive growth, for example, which has to do with factors such as direction-setting and opportunity recognition. As a financial economist, I brought a different skill set that helped the firm look at leadership from different perspectives.

The experience at Goldman Sachs helped me think about leadership in this broader way, beyond a very effective but rather narrow frame that is largely organizational behavior, psychology, and sociology. These are wonderful disciplinary underpinnings, but how do we broaden them to cover all that the firm does and can do to create value?

Last year, the school launched the public phase of its $300 million Campaign for Haas. How does this fundraising effort connect with your vision?
The campaign will allow us to finance our vision for Berkeley Haas: developing leaders who have what the world needs more of — graduates with the ability to lead using the power of innovation. The campaign has three goals. First is building the leader's curriculum, as I described, which will differentiate us from other business schools. Second -- and the biggest piece — is to become the business school where the best scholars and teachers want to stay and thrive. As part of this goal, we need to expand the size of the faculty and provide more support for research.

The third area is focused on transforming the Haas campus. Fifteen years ago, when Haas moved from Barrows Hall to our current building, it dramatically changed the culture of the school and opened new doors for us. Now we need to transform this wonderful set of buildings to meet new needs because of enrollment growth and new ways of learning. We also need a new facility for our rapidly expanding executive education division. Teaching executives extends our Berkeley- Haas leadership brand into the business world, and it provides solid revenues to help keep us financially self sufficient.

How have the recession and California budget crisis affected the campaign and the school?
Clearly last year was not great timing to launch the public phase of our capital campaign, but we had no choice. The good news is that we have already raised nearly a third of our goal, and we are hopeful that our alumni and friends will again be generous when the economic storm subsides. We are seeing almost the same number of alumni give as last year. I think that shows that we‘re on the right track.

The impact of the budget cuts at Berkeley and the other nine campuses will be severe in the short term. Tuition is rising rapidly. All faculty and staff, including those at our school, are facing a year of furloughed days off starting in September — essentially a pay cut of up to 10%, depending on one’s salary. This will add to the competitive pressures we already face at Berkeley.

The good news is that the school’s new financial model provides non-state revenue that we can direct toward our academic programs. This means Berkeley Haas students will see few if any cuts to their programs and basic services. We think we will be effective working locally to limit the negative impacts of a bad year for UC.

You’re the father of two small children. How do you juggle the deanship with raising a family?
I try to carve out every part of the weekend that I possibly can to be with my 9-year-old son, Jake, my 6-year-old daughter, Nicole, and my wife, Jen (MBA 96). During the week, I'm good for two evenings a week for Haas, but I don't like to be away from my family for more than that. Two to three days every week I take them to school in the morning.

You are probably the only dean of a top business school who wears an earring. What is the story behind it?
Ahh, that. I started wearing the earring shortly after I joined the Berkeley faculty. You see how fast this place gets to people? Actually, one of my colleagues and I went out and got our ears pierced together. For me, it’s a reminder of how many degrees of freedom we actually have in our lives. We get on certain pathways and do certain things, but usually we grow the most when we take risks and experience big transitions. We don’t need to define ourselves one certain way, or as one certain thing. We can be many things in our lives. I like being reminded of that.



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