Rotman School dean Tiff Macklem on why MBAs need to think globally

Rotman tops our B-school opinion survey for a second year. Dean Tiff Macklem explains how MBA programs are adapting to a changing economy and why students need a global mindset

Reputation may seem like a superficial measure by which to judge an MBA school. But in the world of business, image, prestige and public opinion matter. For the second year in a row, Canadian Business conducted a survey of 1,000 MBA students and their parents, grads and other professionals about their attitudes toward the coveted business degree. The key finding? A full 87% of respondents say that having an MBA from a top-branded program is valuable. There was no institution more lauded than the University of Toronto’s Rotman School of Management, which scored the top spot on the CB Reputational Ranking yet again. (Ivey Business School and HEC Montréal placed second and third, respectively.) Rotman led on most factors, including quality, international exposure and ability to propel students’ careers forward. It’s also highest in terms of cost. Tuition stands at $103,000, making Rotman the first business school in Canada to break six figures. But with 30% of respondents contending that the value of an MBA is increasing, graduating from a well-respected institution is still clearly worth the expense to many.

Rotman’s reputation inside and outside the country is matched by that of its dean of two years, former Bank of Canada deputy governor Tiff Macklem. He’s a B-school outsider; though he worked in and led the central bank’s research department, his own education was in economics. Macklem has, nevertheless, adopted a clear vision of modern management education at Rotman.

As he prepares to welcome his third cohort of MBA candidates as dean, Macklem explains why the MBA still matters, how Rotman is evolving under his leadership and what management schools must do to keep up with the fast-changing economic and business worlds.

CB: Rotman once again topped our reputation ranking, but these days, your competition is global. How important is it to attract students from outside Canada?

TM: Our classroom is very international. Last year’s class had students from 34 different countries around the world. Students want to learn how to do business globally, and they’ve got a cross-section of the world right in their classroom.

My goal is to make Rotman a truly global brand in management education and research. Joe Rotman was a marvellous benefactor—a visionary—and I had the benefit of getting to know him before he died. If there’s one thing I learned from Joe, it’s that Canada should and can compete very successfully in the global marketplace.

Being right beside the United States, the world’s richest, largest market, has been a huge benefit to Canada. But in the past 10 years or so, it has not been the ride it used to be. Canada needs to diversify its trade and investment. Only about 10% of Canada’s trade is with high-growth, emerging-market economies. We need to be gaining share in the markets that are gaining share globally. It’s a lot easier for Canadians doing business in the United States. Doing business in farflung places is not for the faint of heart. It requires global thinking and training in international business.

That’s probably even more important today, given the sluggish state of the economy at home.

The Canadian economy is going through a tough adjustment. When you cut the price of Canada’s biggest export in half, it’s a very negative shock for the wealth of the country. That has a lot of spillovers—you’re seeing a lot less investment and a lot of layoffs in the energy sector. Resources are, and will remain, an important part of the Canadian economy, but we do need to get a better balance of economic activity in this country. It’s going to take some time.

I am, though, optimistic. We’re spending a lot of time on entrepreneurship and innovation at Rotman. We have tremendous talent in this country. We’re actually very innovative. For example, if you measure academic publications in top peer-reviewed journals per capita, Canada’s very high. We have no lack of ideas. Where we’re not doing as good a job as we should be is in taking those ideas and turning them into products people and businesses want to buy. Business schools have an important role to play there. We’ve got a generation of students who are much more interested in working for startups, and we’ve got lots of great companies that need to reinvent themselves from within. We’re seeing increasing numbers of our graduates taking jobs in big companies, where their role is to create new products, to innovate and to disrupt the company from within.

Last year you created a new vice-dean of learning and innovation role for professor Mihnea Moldoveanu. Why?

I did that to emphasize that we don’t just need to teach innovation—we need to do it. There’s new research on how people learn, and the rapid progress in digital technology is allowing for new ways of delivering learning. There are some things people don’t learn very well in the classroom. A lot of softer skills need a more personalized, individual approach, so these are features we’re building into the program. Mihnea has been a leader in this. But the reality is when you’ve got an MBA program that’s running really well, you’ve got to be careful about how you introduce innovation. Innovation can be disruptive, and students deserve an extremely well-functioning, high-impact program. So you need to run pilots to get things working and then bring them in when they’re ready for prime time. Creating the vice-dean of learning and innovation role was a way to create a place for that to happen.

Does the newly created $45-million Rotman Catalyst Fund, a venture pool backed by the Rotman family and the university, play a part in this innovation strategy?

It allows us to scale up existing initiatives and to take chances on some new ones. We’ve been putting a lot of emphasis on innovation and entrepreneurship—that’s not something you can teach very effectively in the traditional classroom. Our Creative Destruction Lab, for example, typically attracts science-based, massively scalable ventures to Rotman, and the MBA students do work for them. The leaders of the ventures are typically graduate students and engineers in the sciences; they’re not people who have a business background. Combining a visionary inventor with business talent is what takes an idea and turns it into a sale. Last year, the Creative Destruction Lab created a pilot of what is really the first-ever business program in machine learning. The lab got $1.1 million through the Catalyst fund to take that pilot and make it a permanent program.

A lot of schools are focusing on the tech sector. Given the resources downturn, how important is the tech sector to the Canadian economy?

One thing to realize is that with digitalization, almost every business is going to be a tech business. Banks are basically technology companies. Understanding the opportunities of digitalization, Big Data, artificial intelligence, machine learning and so on— those are certainly things we’re emphasizing a great deal at Rotman. Within 10 years, I think almost every company is going to have an AI strategy. That’s something we’ve made a big bet on. We’re training a new generation of students that understand the business opportunities of artificial intelligence. They’re not necessarily going to be the ones to sit down and code the algorithms, but they have been exposed right in the program to what these technologies can do, and see the business applications.

In the meantime, how are you responding to the immediate needs of employers?

I spend a considerable amount of time talking to employers. Unlike some MBA schools that have gone to a 12- to 14-month program, we have a work term in the middle. This year, we’ve actually made that more flexible. It used to be that students could only do the internship over the summer months; we’re now offering MBA classes through the summer, so you can do the internship in the summer, fall or winter. What we were hearing from the employers we work with was that they’d like to hire our interns not just in the summer, but in other parts of the year as well—some businesses are busier in the fall and winter. The reality is that the Canadian economy is not growing quickly—it’s growing sort of bestcase somewhere around 2%. Yes, there are jobs that are going to be created, but the economy is not an engine of job creation. It’s a tougher environment, and we want to make sure we create the very best opportunities for our students.