Business Schools

Building a B-School from Scratch


San Diego is no doubt a place where MBA students one day hope to retire. The sunny Southern California city is also looking more and more like a place where they'll want to study. First, in June, San Diego State University announced the hiring of biotech entrepreneur Gail Naughton as dean of the business school, in part to help improve the school's standing with San Diego's burgeoning biotech industry (see BW Online, 7/18/02, "At This B-School, B Stands for Biotech").

Then, on Oct. 2, the newly formed B-school at the University of California at San Diego countered with a major hire of its own: It tapped Robert Sullivan, now the B-school dean at the highly regarded University of North Carolina at Chapel Hill's Kenan-Flagler Business School, to get its new school off the ground. He'll take over at UCSD on Jan. 1.

Sullivan is a veteran who has proven he can make a difference. During his tenure at Kenan-Flagler, it vaulted four spots in BusinessWeek's B-school rankings, from No. 19 in 1998 -- Sullivan's first year -- to No. 15 in 2000 (our latest rankings, for 2002, will be available Oct. 10). He has also increased the school's appeal for corporate recruiters and was instrumental in launching OneMBA, Kenan-Flagler's ambitious joint-Executive MBA program with four foreign B-schools.

Sullivan, who has taught at the University of Texas-Austin's McCombs School of Business and was dean of Carnegie Mellon's Graduate School of Industrial Administration, has ambitious plans for his new school, which plans to matriculate its first MBAs in the fall of 2004. On Oct. 2, BusinessWeek Online management-education reporter Brian Hindo spoke with Sullivan about the move. Edited excerpts of their conversation follow:

Q: You've long been associated with B-schools that have established traditions -- UNC, UT-Austin, CMU. Why the move to a brand new institution?

A: The last major revolution in graduate business education was in the late 1940s and early 1950s at Carnegie Mellon and the Universty of Chicago. They created the term "management science" -- prior to that, business schools were viewed as trade schools. Since then, we haven't had any major rethinking of what graduate management education needs to be as we go into the 21st century.

That's the opportunity that's being presented to me. If you had a clean slate, no legacy effect, what would you do in an ideal world if you had the magic to do it? A good way to view this is to call it the "new" graduate school of management. It should be redefining, just like CMU in the late 1940s. The goal and the aspiration in the charter of this B-school is to redefine the discipline for the 21st century.

Q: What sorts of innovations do you have in mind?

A: It's a little early. If you were starting a business today from scratch and you view this world as very competitive, what you don't do is put your ideas on the market without patent rights. But I can guarantee you, we're not saying, "We want to be Stanford," or "We want to be the Haas School at UC-Berkeley."

This campus will be one that creates something unique with a very strong biotech and telecommunications base. We know the following: A great leader in those industries has to be conversant in the language of the science that drives the industries. So being multilingual in terms of science and leadership becomes quite important.

Q: Why do you feel there exists such a need for this innovation?

A: Curricula do not change very rapidly, skill sets do not change very rapidly. Now, after decades, we're inbred. The business world has changed, but we haven't changed. The greatest thoughts guiding industries aren't coming out of B-schools anymore.

My goal is to be prospective, talking to industry people, especially in the areas of biotechnology and telecommunications, to get a sense of the defining skills and attributes they want in B-school graduates.

Q: Why couldn't you do this sort of thing at UNC?

A: You can't do it with any established school -- it's not just North Carolina -- because you have faculty, staff, facilities, and a curriculum all in place. The governance structure and the processes involved make it very difficult to bring about changes. This is true everywhere.

Curriculum changes are the most contentious things for any faculty to deal with. Faculty at major business schools are 60% to 70% tenured, so you have individuals who have different value propositions to bring to the school, and they may have been wonderful in the 1980s, but we're talking about the 21st century. If you could design the future, it will look different, with no shackles. This is the first time in 40 or 50 years that a major business school is being founded.

Q: What sort of MBA student do you expect to attract to UCSD?

A: We're not that far along, but I can give you some general attributes of what we're looking at. UCSD is one of the top research universities in the world, and it has a natural synergy with the local business community in terms of biotechnology, health-care research, medical research, and telecommunications. It's also one of the most diverse communities in the U.S., because it's at the nexus of Asia and Latin America.

How do you leverage and create value given those communities? One would expect a very strong science and technology base would be important, one that will somehow capitalize on this global nexus.

Q: Is this a niche strategy, or do you expect the B-school to compete with larger, nationally reknowned schools like CMU or UNC?

A: UCSD has never started a program that ultimately is not viewed as one of the best in the world. The charge in forming this particular graduate school of management is to be recognized in that set of elite programs, but not necessarily look like them.

Q: With a new B-school, fund-raising will be an issue from the start. Will you try to find a benefactor after which to name the school?

A: There will not be a naming in the near term. But are many segments of California and West Coast industry stepping up to the plate? Yes, many. There's nobody that's going to step up with $100 million and say, "name the school after me today," because you need some concept of a business plan and a track record before people attach their name to it.

Q: Are there many similarities between your current locale -- the Raleigh-Durham-Chapel Hill research triangle -- and San Diego?

A: Sure. We have Glaxo[SmithKline] out here, and there are many pharmaceutical and biotechnology companies there. We have telecommunications in terms of Nortel and Cisco here.

Q: Did your familiarities with those types of industries have a part in your decision?

A: My interest in working with science and engineering in particular, and also having an interest in technology startups, plays an important role.

Q: Gail Naughton, a biotech entrepreneur, was just named B-school dean at SDSU. How do you view that school as competition for the San Diego market?

A: I don't view them as competition. They've been there for some time, and they're established. But there's a key difference. The UC system is really the home of the research universities in California, such as Berkeley and UCLA. The largest, in terms of research dollars, happens to be UCSD. The biggest driver in San Diego for new technology startups has been UCSD. Hundreds of startups go back to the research labs at UCSD, as does Qualcomm for that matter.

All of the professional schools in the sciences at UCSD had a hand in forming this new B-school. It serves a different mission -- to be part and parcel of the research scientists, the engineers, the medical researchers, and not to be an observer of what they do. We also expect that the scientists and engineers will be in the classroom.

Q: You've overseen an upswing in programs at Kenan-Flagler, including the recently launched OneMBA. Why leave now?

A: It's a great time to leave. This school is on very solid ground. What I do best is innovate. I'm better at revolution than I am at evolution. Kenan-Flagler has momentum in every one of its programs -- all of the rankings are substantially up. We're now in a period of sustaining momentum. I will have been dean for five years, having fulfilled my whole term. So it's a natural time for me to move on.


Steve Ballmer, Power Forward
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