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Chicago Booth must address key global challenges to ensure it remains the world’s premier graduate business school, dean Sunil Kumar and David Booth, ’71, said in a fireside chat to an audience of current and prospective students and alumni.
The conversation, held at the school’s London campus on June 20, focused on their visions for Chicago Booth within a competitive market for education.
They also discussed the motivation that led Booth to make a $300 million gift to the business school, the largest in the university’s history, in fall 2008.
Booth, after whom the school was renamed in honor of the gift, said he believed Chicago Booth was the “number one” business school in the world and “hopefully always will be.”
“My aspiration and number one objective is to keep the faculty strong and ensure it will be able to fend off all competitors so we can have that same stimulation for the next generation of students coming through,” he said.
Kumar, who began his tenure as dean in January, said the school was in “terrific shape.”
“I don’t have fires to put out, but that presents a different managerial challenge.” Instead, he said his two immediate priorities were to build the school’s global footprint and strengthen its brand.
The strategic review he planned out involved the school’s global advisory boards and alumni and examined both degree and non-degree executive education programs.
“We used two yardsticks: Are we influencing current and future managers for whom the opportunity costs of coming back to Hyde Park are too high?” Kumar said. “Secondly, has our visibility outside the US increased as a consequence so we drive the best possible traffic back to our programs?”
However Booth, cofounded Dimensional Fund Advisors (DFA) 10 years after leaving Chicago, said the global opportunity was large but “incredibly complex.” He pointed to faculty as the key component to the school’s success on a global level.
“It is incredibly important that the faculty operates as a team that is treated as equals. It’s really difficult to open an international office and maintain team play, because if you lose the team spirit, the whole thing starts to unravel,” he said. “The only thing you can’t sacrifice is that faculty enthusiasm.”
While they agreed on Chicago Booth’s premier status, Booth and Kumar disagreed over how it should be measured and the importance of MBA rankings.
Kumar acknowledged that rankings “do matter” because they help attract the best future talent to the school. “I do worry about them and will continue to do so.”
He said his goal as dean is to ensure that any student with the right skills who would benefit from Chicago’s program chose the school over any competitor.
Booth said students must decide for themselves which approach they wanted. “What has happened over the last 40 years validates that the Chicago approach is superior,” he said.
“I don’t think anyone out there who likes the Chicago approach says ‘I think Chicago does it well, but X, Y or Z does it better,’ so I don’t worry about it.”
The efficient market hypothesis that emerged from Chicago in the late 1960s when he was at the school was critical to the way DFA, which as of March has $227bn under management, had performed.
“You take efficient markets and make a business out of it. I love the University of Chicago for teaching me that stuff.
“In the late 1960s it was Chicago versus the world in economics. People either get Chicago and love it, or they don’t understand it, but if it gets under your skin there’s no place like it.”
Booth said it was now clear the whole notion of markets and how they worked had made a huge difference to everyday life, “whether dealing with kids or interacting with people,” he said.
He said he had described his gift as a “partnership distribution” because the impact of Chicago Booth on his professional career had been huge. “It was time to think about payback.”
—Phil Thornton