A Look Back at a CEO’S Freshman Year

Not unlike Apple’s Tim Cook, you took over the helm of an organization that had enjoyed unprecedented growth under an iconic leader. What have been the key challenges of your first year?

I would highlight two. The first one was figuring out, What’s next for Rotman? Roger Martin set a bold vision to grow the School to a global scale and to lead with outstanding scholarship, and that vision has been realized: today, we have more than 1,000 MBA students across three programs; a unique undergraduate Commerce program; and innovative new programs like the Master of Finance. This year, our faculty’s research was ranked fourth in the world, as was our PHD program. That puts us alongside Harvard, Stanford, Wharton and NYU Stern. So, now what?

Of course, this is a very high-quality problem to have. It’s a big, exciting challenge. Having worked closely with faculty and staff over the past eight months, in a nutshell, ‘what’s next for Rotman’ involves deepening and extending our impact around the world. By impact, I mean the impact of our graduates in transforming their organizations, starting new businesses and tackling society’s biggest problems; the impact of Rotman thought leadership at management and board tables; and the life-long learning and connectivity of our alumni around the world.

The second aspect I would highlight is that the landscape of business education is shifting, giving students more choices than ever. There is intense competition, and new entrants are using new technology platforms to deliver online learning, challenging the traditional university model. At the same time, new research on ‘how people learn’ is also creating new opportunities. We can and must seize all of these opportunities.

For example, the new competition is forcing us to think deeply about how best to use face-to-face, ‘together time’

at a university, so we are putting more emphasis on experiential learning, customized, small group learning, and even one-on-one coaching. Our delivery mechanisms are changing to create a much richer and more memorable learning experience for our students.

In short, all of this new competition is putting intense pressure on business schools — and on business school deans! But it has never been a better time to be a student.

You are about to reach the one-year mark in your fiveyear term. What has surprised you the most over the past 10 months?

Moving from the Bank of Canada to academia was a big pivot for me. One of the things that really attracted me to the Rotman School was its innovative approach to management education and the breadth of its vision. We need inspired management and bold leadership in business, government and not-for-profits.

I knew there was lots of ingenuity going on here, but I have to say, I did not expect the tremendous breadth and rich diversity of activities that are underway. Now that the School has achieved both a scale and a level of scholarship that is truly outstanding, it has the capacity to bring together the best thinking in the world — from Economics, Accounting, Finance, Sociology, Psychology, Statistics, History, Geography and more — and to apply these to business problems, public policy problems, and societal problems. This is manifesting itself not just in our faculty’s research, but in activities that are highly interactive between students, business and government.

For example, at the Creative Destruction Lab, we’re seeing entrepreneurship come to life, with new deep-science ventures being accelerated with management expertise from MBA students and coaching from experienced entrepreneurs; our Behavioural Economics Program is implementing ‘nudge economics’ to help firms engage with their customers and governments to achieve public policy goals; and at Rotman Designworks, students are involved in customer-centric thinking that involves studying human behaviour, empathizing with people, and designing solutions.

I’ve only been here ten months; but every week, I discover a new gem. I really am in awe of the faculty and the tremendous breadth of the School, and how it’s bringing together thinking from all sorts of disciplines.

What three words would you use to describe your own leadership style?

That’s a tough question. I would say I’m determined; collaborative; and even-keeled. But perhaps you should ask the students, faculty and staff at Rotman!

The reputation of corporate governance and top leaders has been muddied in recent years. Talk a bit about the perceived failure of leadership.

One thing we’ve learned is that you can have a wonderful corporate governance structure in place on paper, but that does not mean the right things are happening in practice. I think what some people really missed is that it comes down to your organization’s culture. We saw this with Lehman and other banks. Even if you have a chief risk officer and a Monday morning risk meeting every week, if your culture is one where people can’t challenge each other, and the emphasis is on short-term profits, there will be a bias towards excess.

Through the financial crisis, the institutions that fared the best were those that genuinely cared about their customers and took a long view. Their approach was: ‘We are going to be there for our customers through thick and thin, because we are in business to serve them; and yes, along the way, we expect to make a profit.’ When markets became very stressed, these companies were willing to dilute shareholders and build up additional capital, so that they would have extra buffers. In contrast, financial institutions that focused on near-term profits and shareholder value were very reluctant to dilute shareholders, and they delayed raising new capital until it was too late.

You can have a wonderful corporate governance structure in place on paper, but that doesn’t mean

the right things are happening in practice.

We also saw some truly unbelievable moral and ethical failures. Again, if you have a culture where the test is, ‘Is this product or service going to solve a genuine problem for a customer or for another business?’ — that leads you to put service first. But if your culture is, ‘If it’s legal and we can make money from it, let’s do it’ — that only encourages employees to start stretching the definition of what is legal.

There is lots of talk these days about ‘shared’ leadership within organizations. Are you a proponent of this approach?

Partly, it depends on what your business is; form follows function. If I were to contrast my previous employer to my current one, the Bank of Canada makes a relatively small number of very important decisions. As a result, it requires a fairly hierarchical structure with a single spokesperson in the form of the Governor. A university is a very different kind of place: it demands a much flatter structure and more of a shared leadership model. The Rotman School is a collection of amazing thought leaders.

But regardless of your organization, there does need to be an overarching mission and a clear set of objectives that everybody is working towards. We all need to work together to deliver outstanding educational programs, and the leadership is then shared in terms of achieving that broader mission. A powerful organization leverages the talents of a large number of smart, dedicated, hardworking people, moving in the same direction.

What is your favourite example of ‘leading-edge Finance’ right now?

I would point to the realm of Behavioural Finance. Finance is usually very rational, technical and mathematical; and I can’t deny it, I love all of that stuff! But one of the lessons that wasn’t getting the front-line attention it deserved is that, we have to remember that financial decisions are taken by people. People do make decisions based on analysis, but they have cognitive limitations — we are not Watson — and we also make decisions based on emotion. It is important to bring an understanding of how people really make decisions into the analysis, and the burgeoning field of Behavioural Finance is extremely promising in this regard.

Five years from now, what do you hope to have accomplished at Rotman?

Simply put, I want the Rotman School to be the place where the world’s business, government and non-profit leaders come for intrepid thinking, and to hire incisive and inventive leadership talent. At the centre are our students and alumni. We need to attract the very best students in the world — high impact women and men from many cultures — and we need to ensure that they have a truly transformational experience. Then, we need to stay connected to them in a life-long engagement. The bottom line is, our success is embodied in the success of our graduates.

Scholarship is also very important, because it exposes our students to new thinking and brings them to the cutting edge. In the modern world, the answers are no longer ‘at the back of the book’: you need to be able to think creatively. Exposing students to leading-edge thinking, and to problems where the answers have not yet been worked out, is a key element of their training at Rotman. Five years from now, I want the world knocking on our doors, looking for bold thinking and unique talent.

If your culture is one where people can’t challenge each other, and the emphasis is on short-term profits, there will be a bias towards excess.