Anatomy of a major B-school turnaround
(Poets&Quants) — It was a March day in 2009 when several members of the senior leadership team at Emory University’s Goizueta School of Business walked into the dean’s office for an urgent meeting. Dean Larry Benveniste knew the news was bad.
“I could see the look on their faces,” he recalls. “They had something to tell me I knew I wasn’t going to like.”
The school had fallen five places to 27th from 22nd the year before, its lowest U.S. News ranking in years. Only four years earlier, Goizueta had been ranked a solid 18 on the list.
“Oh my,” Benveniste says he thought. “I knew this would be the worse because this was the in-between moment, and our focus would begin to pay off, and we would see better days ahead.”
That is exactly what happened. The school has since bounced back to a rank of No. 19 on the U.S. News & World Report ranking. More importantly, last year no top 25 school did a better job of placing its MBA graduates than Goizueta. Some 91% of the class of 2012 had job offers by graduation and 98% had offers three months later, better than Harvard (95%), Stanford (90%), or nearby Duke University’s Fuqua School (93%).
The school, moreover, has shown the largest growth in reported salary and bonuses among U.S. News’ top 25 schools over the last four years and the only double-digit growth during that time: 18.6%. Average Goizueta MBA salaries rose to $103,463 last year from $91,074 in recession-plagued 2009, while average bonuses jumped to $25,549 from $17,710.
Behind the impressive numbers is a tale of a leadership team that made painful decisions to dramatically overhaul a school that by all surface accounts was doing just fine. When Benveniste arrived at Goizueta in 2005, succeeding Tom Robertson, who went to Wharton as dean, the school had just achieved its highest U.S. News rank ever (No. 18).
Beneath the numerical ranking, however, the new dean sensed trouble. The performance gap between Goizueta and schools such as Carnegie Mellon and Cornell was considerable, largely because Goizueta trailed those schools on placement stats and starting salary numbers. “I had sensed we reached a plateau with the existing strategy, and something had to change,” says Benveniste.
A listening tour by the new dean, who had come to Goizueta after a stint as dean at the University of Minnesota’s Carlson School, yielded other key insights. Recruiters and alumni felt the graduates coming out of the school could be better prepared to use analytical tools to solve business problems.
The school put together a task force in 2007 to survey recruiters, alumni, and students. “The need for more rigor in the curriculum jumped out from both students and recruiters,” says Doug Bowman, a marketing professor and senior associate dean of external affairs who led the task force. “One sound bite from students was, ‘During my summer internship, the company presented me with a list of eight to 10 projects, and I didn’t feel comfortable doing all of them. So I was self-selecting out of the more rigorous ones.’”
From corporate recruiters, the school gained another telling insight. “They essentially told us, ‘We are paying these folks a lot of money. A few years ago, we could have a honeymoon period to allow them to get up to speed. We could even do some retraining. But no more.’”
And then there was the issue of culture. Over the years, faculty had noticed that students were less engaged and less interested in the academics, instead viewing the MBA experience as a two-year job search. Similar issues have cropped up at other schools. Stanford, before more recent curriculum changes, had surveyed its students only to find that they believed their undergraduate education was more demanding than their MBA schooling.
As a first move, Benveniste moved to appoint a strong academic to run the MBA program. In 2007, the dean flew to Brazil, where half the class of 2008 was on an international excursion, to let students know that changes were coming.
“We pulled the Band-Aid off quickly, and it was painful,” says Benveniste. “First of all, the sudden and intense focus on academics was a shock. We told students we want you to have fun, but alcohol is not the reason you are here. The class of 2008 was right in the middle of having one experience and then went to having a totally different experience. The class had just come in under one regime and suddenly was going to spend three quarters of their program under a completely different set of rules.”
In the classrooms, the faculty upped the rate of cold calls, paid more attention to a grading curve that gave penalty grades to 10% of the students, and piled on more individual work rather than team assignments.
“We weren’t going to let people hang in the back of the room anymore and not be deeply engaged,” says Rob Kazanjian, a management professor and vice dean of programs. “And we reduced the group assignments so you would no longer get the most experienced people sitting at a computer and doing the analysis while everyone else looked over his shoulder.”
The school asked professors to include a substantial data analysis project into every core course. “We made it a beefy part of the curriculum and the students’ grades,” says Bowman.
Some of the boldest changes, however, came as part of a new curriculum rolled out in 2008. Instead of starting off the MBA program closer to Labor Day, the school began its program in the first week of August — a full month earlier — and then ran its incoming students until mid-December. “What used to be a semester now became a semester-and-a-half worth of effort,” explains Bowman. “We put the entire core curriculum into that first semester, freeing up the second semester for five electives before the summer internship.” The idea was to ensure that Goizueta students, going out on their summer internships, would be ready to impress.
Surprisingly, the faculty agreed to the changes — including coming in to teach the core in early August — with little major debate. “I anticipated it would be an issue,” concedes Maryam Alavi, vice dean for faculty at Goizueta. “I thought people would say, ‘My God, you are getting me started on Aug. 1? What about my vacation?’ But I did not hear any complaints. They really stepped up.”
The faculty also used recruiter feedback on students to make changes in the classroom. “A marketing professor here attended a recruiter feedback session before starting his fall course, and he actually adjusted his curriculum plan because of it,” says Wendy Tsung, associate dean of Goizueta’s MBA Career Management Center. “He wanted to make sure he was teaching what the market needed.”
The school has seen dramatic results after putting these changes in place. The so-called conversion rate — the percentage of students who return from their internships with job offers in hand — went from around 25% to nearly 60% last year. In 2012, Goizueta beat every other top 25 business school in the U.S. in job placement, and average starting salary and bonuses have risen higher at the school than at any other major rival.
All told, it’s made for a major turnaround at an often overlooked and underappreciated top 20 school. “I have never seen a school respond to a fairly significant change in direction, from top to bottom, as this school has,” Benveniste says. “Everybody here lined up to do his or her part.
“I think we’ve proven over the last five years that what we add is hugely significant, because we have virtually taken the same pool and significantly changed the output. That can only happen for one reason: what has gone on in-between.”
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