Invested in Inclusion
As part of Booth’s Diversity and Inclusion Alumni Task Force, a fundraising committee of alumni volunteers fosters opportunities for Booth students of today and tomorrow.
Invested in InclusionMartin León Barreto
To kick off Chicago Booth’s yearlong celebration of its 125th anniversary, the school hosted a fireside chat between two leaders who have been integral to its history: professor Harry L. Davis and David Booth, ’71.
Davis, the Roger L. and Rachel M. Goetz Distinguished Service Professor of Creative Management, celebrates his own anniversary in 2023 with 60 years at Booth. Throughout this time, he has introduced numerous programs that have left such a lasting imprint on the school and on business education. This includes LEAD, the first core leadership program at any top MBA program in the country.
Booth made a transformative gift to the school, becoming its namesake in the process, and is a life member of the Council on Chicago Booth. He cofounded his global investment firm, Dimensional Fund Advisors, based on the principles of efficient markets that he studied as an MBA student and as a research assistant to Nobel laureate Eugene F. Fama, MBA ’64, PhD ’64, the Robert R. McCormick Distinguished Service Professor of Finance.
The fireside chat was cohosted by Booth’s Student Life team and the student club Built@Booth. Read on for edited excerpts from their conversation.
Harry L. Davis: You grew up in Kansas—what was it like to grow up in the family and the community that you were in?
David Booth: Into high school, I grew up in a real small town with a lot of family around. It was a different era, a different time. In small communities, people looked after each other, and I think they had a certain amount of wisdom.
Davis: Has that carried over into some of your business going forward?
Booth: I think it does. If you say, “What’s really your goal in life?” at the end of it all, I think most people want to feel like the world was better for their time here.
Davis: Did you have some values that have persisted throughout that time?
Booth: That’s one of the things I like talking about, Harry, because the values are so important, particularly in business. A lot of times, people think you have to cut corners and cheat to get ahead in business, and my experience has been just the opposite.
As an undergrad, I put myself through school selling shoes and I loved it. I was a commissioned salesman, so I had a pretty big incentive to push the shoes. But what I learned early on was at night, when I went home, I wanted to feel good about me. And that was transformative. It turns out that’s the right attitude to have to be successful selling.
Davis: I’ve always been intrigued with your partnership with Gene Fama. I don’t think there are all that many examples of two people transitioning from student-professor to lifelong partners and cocreators.
Booth: It was fantastic working with him. And it’s so important early on, I think, to have somebody whose moral compass is straight north 100 percent of the time, no deviations at all. He’s always about doing the right thing and insisting on that. And if he doesn’t know something, he doesn’t comment on it. That’s actually one of the lessons I learned. When people ask my opinion about things, the first thing I try to think is, “Do I know anything about this subject?” And if I don’t, I back off.
“What I learned early on was at night, when I went home, I wanted to feel good about me. And that was transformative. It turns out that’s the right attitude to have to be successful selling.”
Davis: This audience includes many students who are roughly the same age that you were when you came here. Given your experiences, what decisions or behaviors or aspirations or values would you like to see more of from these not-too-distant alums of Chicago Booth?
Booth: Don’t try to rely too heavily on predictions. Accept that there’s uncertainty. Deal with it. Try to develop points of view. Call them theories, models, however you organize your thinking. Try to get as much data to support your point of view as you can. Integrate your values. If it’s early on, don’t worry about your first job. Worry about being in an environment where you can grow along the lines that you believe in.
It was slow going with these new ideas—all these ideas floating around Chicago. It took a long time to get. At our firm, for example, we didn’t pay a dividend out to our investors for 15 years.
Davis: Why did they stay with you?
Booth: We were growing pretty rapidly. What we were telling people was: we’re selling this set of ideas, and these ideas are bigger than the firm. And so if we can figure out how to hook them up, eventually we’ll probably be OK. And they bought into that. And it was fun. Logic, reason, and empirical evidence were on our side. Sometimes that isn’t sufficient to be successful in business, but that’s a good way to start.
Davis: I have a lot of enthusiasm for our students here, and I have for 60 years, and I haven’t given up in any way.
Booth: Well, they’re the best.
Davis: The terrific curiosity and hunger to learn and do things that can make a difference. And I think that’s important—even though a lot of people might say, you’re doing that?
Booth: Right. Do stuff you believe in and be hungry and try things out.
Davis: What did your parents think?
Booth: They were mystified by the whole thing. By the time I got out of college, they still had never been on an airplane. So my flying around the country all the time—they just couldn’t relate to it. But I owe a lot to my parents. What they gave me, that’s the kind of stuff you can’t buy, right?
Davis: When I got a job offer from the University of Chicago, my father thought that Chicago was just filled with communists. I called him with my heart beating with excitement and he said, “Well, Harry, maybe someday you’ll get an offer from a good university.”
Booth: The same thing happened to me. I left my job, and we started Dimensional, so I called my dad and said, “I’m leaving my job and starting this firm.” And he said, “What are you going to do?” “Well, we’re going to create a mutual fund.” He goes, “Mutual funds. That’s not very good, is it?”
As part of Booth’s Diversity and Inclusion Alumni Task Force, a fundraising committee of alumni volunteers fosters opportunities for Booth students of today and tomorrow.
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