Stanford GSB: 90 Years of Progress and Innovation

90

years of

PROGRESS AND INNOVATION

A graduate school of business administration is urgently needed upon the Pacific Coast. —Herbert Hoover

90 YEARS OF PROGRESS AND INNOVATION

A WEST COAST SCHOOL Stanford University was not born as an elite institution, at the university or the individual school level. The idea of a business school had been around, but it didn’t take hold until influential alumnus Herbert Hoover took an active interest in the early 1920s and assembled friends at the Bohemian Grove to solicit support for the creation of a school. Hoover felt a Western counterweight was needed to prevent young business talent from draining to the East Coast. In 1925, the dream was realized with the founding of Stanford Graduate School of Business.

Stanford President Ray Lyman Wilbur had clear goals for what he thought the business school at Stanford should do, probably informed by his previous experience as dean of the medical school where, influenced by educational reformer Abraham Flexner, he had helped restructure medical education. Wilbur built on the sciences of biology and chemistry, and held that there should be a case for business education built on the underlying sciences of business.

Willard Hotchkiss of Northwestern University served as first dean from 1925 to 1931. The earliest GSB class had 16 students (including one woman), of whom two graduated.

There were only a handful of faculty members, some of whom were actually borrowed from other departments to fill the curriculum.

90 YEARS OF PROGRESS AND INNOVATION

THE JACKSON ERA Although off to a good start, growing during the Depression was difficult.

Dean Hotchkiss struggled to establish a more secure funding base and reached out to philanthropies such as the Rockefeller Foundation, which provided minor grants. But financial troubles grew during the Depression years, and Hotchkiss finally left after taking a one-year leave.

J. Hugh Jackson was appointed second dean in 1931. It was Jackson who changed the focus of the school to be more specialized, adding many practitioners to the faculty. The GSB was not focused on research — and for research that was developed, the applied parts were seen as most relevant. External events such as the World War and Depression, and developments in fields and ideas (including scientific management and operations research) influenced the future content of management education and the GSB.

The arrival of Stanford President Wallace Sterling in 1949 saw major campus changes. Sterling asked the business school to improve its intellectual foundation, and kept up his hopes for refocusing the business school in ways that would be more in tune with the Carnegie Institute of Technology / Ford Foundation model of business education.

90 YEARS OF PROGRESS AND INNOVATION

A NEW BEGINNING With Jackson’s resignation in 1956, change was in the air. President Sterling put Ernest Arbuckle, among others, on the search committee for a new dean. Sterling in fact offered Arbuckle the position but he declined.

While the search was proceeding there were few significant changes, though Professor Carlton Pederson did get the renowned Alfred P. Sloan to sponsor the Stanford Sloan Program, which commenced in 1957 with a grant of $216,000 from the Sloan Foundation.

After a recruiting effort that included a meeting with former U.S. President Herbert Hoover in New York City, Arbuckle was persuaded, and became the third dean in 1958.

Arbuckle shared Sterling’s vision for a more researchbased school and began a restructuring of the GSB that would significantly change the institution from a vocational MBA focus to a research base. As he noted in an article, he was “looking ahead” for the school to help “create new knowledge and advance intellectual frontiers.” He wanted to increase the number of students and improve the conditions of research, noting that since World War II Stanford “has not produced enough in the way of research and publications.”

As an educational institution, we should be ahead of business institutions in terms of solutions to and improved methods of handling current and future business problems.

This job cannot be done without research. —Ernest Arbuckle

90 YEARS OF PROGRESS AND INNOVATION

90 YEARS OF PROGRESS AND INNOVATION

BEGINNINGS

A key driver and motivation behind the change was an express wish to get on the radar screen of the Ford Foundation. At the time that was one way to secure more funding for the school as well as improve its academic reputation. Changes at Stanford GSB were embedded in a larger set of revolutionary changes in business schools and management education, toward an interdisciplinary, but disciplined, research-based model of business education. This approach was nurtured by the Ford Foundation and inspired by the influential 1959 “Gordon-Howell report�, Higher Education for Business, by Robert Gordon and James Howell.

A WORLD-CLASS RESEARCH INSTITUTION To successfully transform the GSB had to rebuild itself in the spirit of the GordonHowell report. Thus they began an active courtship of the Ford Foundation and encouraged a spirit of change at the GSB that involved issues such as strengthening personal relationships and hiring faculty from Carnegie, the RAND Corporation, Harvard, and Chicago, as well as upgrading and engaging in research and research conferences.

Among the most significant new hires were Howell himself and George Leland Bach, another figure who symbolized innovation and led the GSB’s transformation into a leading research institution.

Bach had been the founding dean of the business school at Carnegie before coming to Stanford and proved a major force in the development of the GSB as a world-class center of business and management research.

90 YEARS OF PROGRESS AND INNOVATION

“BALANCED EXCELLENCE” The concept of “balanced excellence” emerged as the definitive concept that could integrate the school’s past and future. It was first outlined by Dean Arbuckle and continued by his successor, Arjay Miller. Balanced excellence attempted to integrate and synthesize different approaches to business education, and included building on fundamental knowledge of behavioral sciences, theory and analysis, as well as training for practice.

The GSB provided a unique blend of these approaches. More recently this concept has been described as a balance between the “Chicago” and “Harvard” models, academic rigor and practical relevance.

As Arbuckle noted, “We will be criticized by the intellectuals for not being theoretical enough and by businessmen for not being practical enough. But the very difficulty of the job presents its real challenge — and the stakes in this area are high”.

90 YEARS OF PROGRESS AND INNOVATION

INTERNAL CHANGES AND CAMPUS MOVES As part of building Stanford GSB into a world-class research center, computing became a cornerstone in interdisciplinary business research and education. Computers began to be used at the GSB before there was even a “computer science.� A pioneer user of the technology was Professor Charles Bonini, who had to turn to UCLA to process his computing jobs. Under Robert Jaedicke, dean from 1982 to 1990, computing became increasingly important in the structure of the school, both for teaching and research.

The GSB accepted women students as early as the first class (1926). It was less proactive about women faculty; Joanne Martin became the first tenured female faculty member in 1984. Yet women played an important continuing role in GSB administration. A series of accomplished women helped guide the school throughout the decades, including Lillian Owen, Carol Remele, and Ilse von Witzleben. Minorities gradually became an important part of GSB life over the years.

The external architecture of the GSB was changing as well: from the original home of the GSB in the Stanford Quad to the GSB South Building, opened in 1966. The Littlefield Building (1988) was constructed to accommodate a growing faculty, followed by the Knight Building in 1999. Dormitories for the students include the Schwab Residential Center and the new Highland Hall, due to open in 2016. In 2011 the GSB moved to its current site, the Knight Management Center, made possible by a generous initiating gift of Phil Knight, MBA ’62.

90 YEARS OF PROGRESS AND INNOVATION

RECOGNITION AND REACHING OUT Under Dean Arjay Miller, management not only of business organizations but of other organizations as well became a concern. Arriving in 1968, Miller had insisted he would assume the office only if he could organize an urban management program. He firmly believed in instilling a social conscience in the students; as he later said with great pride, the GSB is a “school with a conscience”.

The resulting Urban Management Program, founded in 1971 and retitled the Public Management Program, was inspired by Miller’s personal frustration with challenges of urban problems in 1960s Detroit while he served as president of Ford Motor Company. It was the first program of its kind in an American business school.

Our faculty have been recognized in many ways: three John Bates Clark Medal winners, 10 members of the National Academies of Science and Engineering, and 18 fellows of the American Academy of Arts and Sciences.

Three GSB faculty earned the Nobel Prize in Economics, for work done before they came to Stanford: William Sharpe (1990), Myron Scholes (1997), and A. Michael Spence (2001).

The GSB’s emphasis on entrepreneurship was initiated under the administration of Dean A. Michael Spence with the founding of the Center for Entrepreneurial Studies in 1996, the first of the GSB research centers.

In the following years, entrepreneurship would come into increasing importance in the school and in the business world at large.

Under Dean Robert Joss, Stanford GSB reached out to forge ties with other schools across the Stanford campus, building strength through interaction. In 2006 Nike founder and chairman Philip H. Knight, MBA ‘62 presented the business school with $105 million, the majority of the gift earmarked to construct a new home for the business school, the Knight Management Center.

Founded in 2011 as a result of a $150 million gift from Bob (MBA ’60) and Dottie King, SEED (Stanford Institute for Innovation in Developing Economies) aimed to transform lives of people in poverty by stimulating economic opportunities through innovation, entrepreneurship and growth of businesses around the world.

90 YEARS OF PROGRESS AND INNOVATION

GOING GLOBAL The Global Management Program started as a certificate program in 1994. A major revision of the curriculum adopted in 2006 furthered the process of learning about unfamiliar economies and other cultures. These curriculum changes signaled the growing importance of the international perspective as an important component of management education, introducing students to the process of learning about unfamiliar economies, increasing awareness of cultural differences and their implications for business, and helping students appreciate complexities of managing in the international and global environment.

Under Dean Garth Saloner, global awareness has become an important priority. International student study trips incorporating global awareness have become an integral part of the school. The driving concept has been to learn about cultures and bring insights back to the GSB. Education technology has become a powerful medium to enrich the student experience at the GSB and extend our global reach in certificate and executive education programs outside the United States.

One of the most recent initiatives to further and foster innovation has been the Stanford Ignite program, a certificate program which teaches innovators to formulate, develop, and commercialize their ideas. Ignite is offered on the Stanford campus, as well as in Bangalore, Beijing, London, New York City, S達o Paulo and Santiago.

Through these and other changes, Stanford GSB continues to position itself to be fully integrated into the global economy of the future.

90 YEARS OF PROGRESS AND INNOVATION

90 YEARS OF PROGRESS AND INNOVATION

BEGINNINGS

authors Mie Augier and Paul Reist visual designer Daphne Chang publisher Oral History Program, Stanford GSB Library October 2015 Š 2015 Graduate School of Business Stanford University

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Published by Stanford GSB Oral History Program, 2015, in celebration of the 90th anniversary of Stanford Graduate School of Business