By John A. Byrne
January 7, 2013

(Poets&Quants) — It was four days before last year’s graduation at the Harvard Business School when Dean Nitin Nohria received the anguished phone call at his home on a Sunday afternoon. Two distressed MBA students had some rather tragic news: an MBA classmate had gone missing in Portland, Maine.

The evening before, the three students had ventured into a popular bar in Portland Harbor for a pre-graduation celebration. Just before midnight, 31-year-old Nate Bihlmaier left the bar without his friends. Apparently over-served, Bihlmaier stumbled off the pier and accidentally drowned.

The full extent of the tragedy was unknown to Nohria when he convened a telephone meeting late that Sunday evening with key HBS leaders, including Youngme Moon, faculty director of the MBA program.

“We had a family that was in a tragedy that none of us could ever imagine and we felt we should be there,” recalls Nohria. “This was the right thing to do. What could I ever do that was more important than this? My view was if I had gotten a call like that and my kid was in trouble, I would drop everything and go.”

So at 6 a.m. on Monday, Nohria and Moon got into a car and went straight to Portland to lend support and encouragement. Over the next two days, Nohria comforted family members and students, openly praised the integrity and intelligence of the missing student to reporters anxious to portray him as a spoiled rich kid, and pulled every string a Harvard Business School dean could find to ensure the search was a top priority. He called then U.S. Senator Olympia Snowe along with a key contact in the U.S. Coast Guard, and he walked into the Portland police station to speak directly with the chief of police.

“’I know that you have other things to do, but we have graduation in a couple of days and we need to get this resolved quickly,” Nohria recalls telling the police chief. “’The only thing that would make me unhappy is if the speed of resolution was in any way shaped by how many resources we brought to it. I can understand there is always uncertainty. What wouldn’t make me happy is if we didn’t do all we could.’”

When the body was pulled from the bottom of Casco Bay on Tuesday, Nohria had another delicate issue to manage. “You have one family that is in deep mourning and you have 900 families for whom this is the greatest celebration of their lives,” he explains. “How do you thread the needle of honoring both? We couldn’t allow the sorrow of this family to completely cloud the joy that other families had every right to feel. Yet, Nate’s family had every reason to feel sorrow, and we needed to honor their sorrow.”

On graduation day, Nohria managed to do both while not trivializing either. At commencement, he named a scholarship in honor of Bihlmaier, presented his diploma to the student’s pregnant wife and parents, and for the graduating students and their families celebrated what many regarded as a lifetime achievement. “I think we found a way to get through it in which everyone came together in amazing ways,” he says.

Nohria’s empathetic handling of the tragedy as well as his bold leadership of the Harvard Business School earn him Dean of the Year honors from Poets&Quants for 2012. As dean of the world’s most powerful and influential school of business, the 50-year-old Nohria has unflinchingly led the school into a new brave era.

Upgrading an 80-year-old approach to the MBA

When he became dean in July 2010, it would have been tempting for the leadership professor-turned-dean to go slow or to play the role of a mere steward at Harvard, where nothing was broken. Instead, Nohria has aggressively pushed through an overhaul of an already world-class MBA program, adding experiential learning to Harvard’s dominant case study method of teaching. He astutely used the convening power of the school to get into the center of the debate over U.S. competitiveness, leveraging the star power of HBS’ faculty, its alumni, and the Harvard Business Review to bring attention to a crucial economic concern. And he has been willing to openly confront controversial issues that most deans would sweep under the table, from sexual harassment to grading policies that had put female MBA candidates at a disadvantage.

Now, Nohria is in the quiet phase of a capital campaign that is intended to raise an unprecedented $850 million to $1 billion for an institution that already boasts an endowment of $2.8 billion, the largest of any business school in the world. The last HBS campaign brought in $600 million between 2000 and 2005. The newest fundraising effort will officially launch in September.

Nohria built important coalitions at the school since joining Harvard’s faculty as a leadership and management professor in 1988.  As soon as it was announced that he would take the reins as dean in May 2010 — two months before he assumed office — Nohria launched a “listening campaign” to put together an agenda. After having conversations with faculty, alumni, and students, Nohria came up with five priorities, which quickly became known as the five Is: innovation, intellectual ambition, internationalization, inclusion, and integration.

Against concerns that he was moving too fast, Nohria pushed through major changes in the MBA curriculum. The revisions diminished the school’s dependence on its previously sacrosanct case method of teaching, the dominant pedagogy at HBS since the mid-1920s.

The school’s most significant innovation: a new first-year course dubbed FIELD (Field Immersion Experiences for Leadership Development). The course is based on small-group learning experiences that focus on leadership, global business, and entrepreneurship. Among other things, FIELD includes a required eight-day global immersion experience during the January term and a requirement to think up and build a micro-business with seed capital from Harvard Business School. All told, Harvard spent $10 million to create and implement the changes.

Asked to grade himself on innovation, Nohria gives the school an “A” for what it has pulled off. “There are people who have sent students out on global trips. There are people who do entrepreneurial ventures. I think doing it in a structured, large-scale, systematic way with faculty oversight at every stage of the process” is what made this different. “It may sound immodest, but relative to how many people said to me, ‘Nitin, you’ve got to be crazy to do this in less than a year,’ it was a big success. If that doesn’t get us an A, I’m not sure what would.”

Yet, Nohria is hardly smug about the school’s progress. “That doesn’t mean we got all of it right,” he adds. “About two thirds of it worked and a third needs to be improved. So this year we have been ruthless about cutting out what our students told us didn’t work.”

Summoning Harvard’s intellectual firepower

Of course, MBA curriculum overhauls are nothing new. But the scale and breadth of Harvard’s changes make it noteworthy. The same is true of Nohria’s ambitions to enlist the school’s intellectual capital in an unprecedented effort around U.S. competitiveness. It was the dean who first went to HBS superstar Michael Porter and strategy professor Jan Rivkin to suggest that the two tackle the issue to both understand and improve how U.S. companies compete in the global economy.

“It felt to me that as we were thinking about internationalization and globalization, we were forgetting that America is an important part of the globe,” explains Nohria. “It was almost as if we took for granted that we knew America, and all we needed to understand is what was happening everywhere else in the world. My view was this is not a moment to take the … continued success of America for granted. We have a deep stake in the continued success of America because it is hard to be a great university in a B-grade country.”

The U.S. Competitiveness Project has deeply engaged a dozen professors at the school and involved as many as 20 members of the faculty. Their research has been informed by a global survey of nearly 10,000 Harvard Business School alumni that drew headlines all over the world. Harvard Business Review devoted an entire issue to the topic. And the school has brought the discussion off campus to well-attended alumni gatherings in New York, San Francisco, Chicago, Washington, D.C., Detroit, and Charlotte, N.C. Nohria says HBS will ultimately invest up to $5 million on the project.

What’s especially striking about the initiative is the way Norhia summoned the school’s intellectual assets to make an impact on a critical topic that has long been a victim of political rhetoric. “This is the first time we surveyed all of our alumni on an intellectual topic and we began to realize this amazing strength we have,” says Nohria.

“We have 50,000 people out there. Every day, they are making choices about whether they want to invest in America or not. Out of the 10,000 people who responded, we had 2,000 who reported on decisions that they made in the last year on location activities. I can imagine very few other samples that allow you a real window into how people are thinking about America as a destination to do business in versus other places.”

Harvard used the survey results to take the debate into the field. The competitiveness forums have drawn four to five times as many attendees as typical alumni events the school sponsors. In New York, some 700 alumni came to the forum, the largest alumni gathering ever in the city. “In each case, it is trying to get local leaders who care about this topic engaged with the school and to get the message out,” Nohria says.

Looking abroad

Nohria has also focused on making HBS more international. The school’s seven research centers in Shanghai, Tokyo, Hong Kong, Mumbai, Paris, Buenos Aires, and Silicon Valley have been used to help faculty do more global research and to globalize the MBA curriculum. In the last year, 50% of the roughly 250 case studies written at Harvard have been global, up from less than 5% a decade ago.

“I take no credit for that,” concedes Nohria. “That is the amazing legacy I have inherited from my predecessors. We remain committed to that strategy. We don’t want to build campuses. But now we are starting to use the research centers not merely to bring knowledge in or support our faculty as they were doing research outside. We are now trying to get these centers to support students going to FIELD. We are using these relationships to create more active engagement in the region by students. We are doing a little executive education, again with the goal of not trying to make that some revenue-enhancing move but because it is the best way of knowing what is going on in that country.

“You can teach people about China in Boston and they will accept anything you say because they don’t know China. But if you are forced to teach an aspect of China in China, then you know that it’s real. If those people tell you this is not the way it actually works, you know you’ve got it wrong.”

All in all, it has been a highly productive year for Dean Nohria, a year of unusual achievement, but also marked by tragedy. But even in the saddest moment on the job this year, Nohria knew what to do and how to do it.

“Sometimes, these things look like you exercise leadership,” he muses. “People think you were decisive. You knew what to do. It’s the fantasy of leadership. That is so far from the truth. The instincts of so many people at this institution made me feel fortunate to be dean of a place where our collective instincts were right.”

Editor’s note: A previous version of this story incorrectly stated that Nitin Nohria is 51 years old. He is 50.

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