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September 24, 2006 5:43 pm

Pay cuts, passion and the call of the campus

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Contrary to popular opinion, life in a university business school is no easier than one in industry or commerce. Many academics work more than 60 hours a week and top academics are just as driven as leaders in the private sector.

Their earnings – and here at least preconceptions are correct – are likely to be far less than those of their senior executive counterparts. Yet, teaching, researching and thinking deeply about business can be so satisfying that, for many, it is worth taking a big pay cut and leaving a materially comfortable corporate lifestyle.

Julie Hodges, Colin ­­As­hurst and Les Graham were private sector high-fliers until, driven partly by intellectual thirst, they left senior jobs to reinvent themselves as business school academics.

“I was at that stage where I was beginning to think about reaching 40,” says Ms Hodges, explaining her career change. In her twenties, after completing a PhD in organisational change and stress management at Sheffield University, she had considered an academic life but decided she wanted to experience business. She worked internationally for the British Council and in the UK for outsourcing company Vertex and management consultancy PwC before joining Royal Bank of Scotland in her native ­Edinburgh.

As an RBS senior human resources consultant, she began to feel unchallenged and that her job was becoming routine. “I wanted a job that I got up and felt passionate about.”

Ms Hodges, now 42, re­signed from RBS and moved to Durham, in the north of England, to join Durham Business School as its latest Foundation for Management Education fellow.

She now has the challenge she craved. She is preparing to teach operational management and information systems to undergraduates, is helping to design and develop an MA in business transformation and is about to start research funded by Sage, a north England-based FTSE 100 software company. She is also starting a one-year postgraduate certificate in education. She will offer pastoral support to students as a college tutor and participate in DBS’s MBA boardroom simulation module.

Ms Hodges is DBS’s fourth FME fellow. Mr Ashurst, now senior teaching fellow in information systems, moved there from Microsoft two years ago. Mr Graham, director of the full-time MBA programme and senior teaching fellow in operations management and strategy, joined three years ago from Nissan supplier MKL, where he was general manager. David Bright, Durham’s first FME fellow, is now a senior lecturer at The University of Hull Business School in the north of England.

An MBA, completed in 1997, “opened my eyes to how much I didn’t know as a reasonably senior manager,” says Mr Ashurst. At Durham, “there have been great opportunities to start new things up,” he says. These include the business transformation Master’s and a business transformation forum.

Mr Graham, who has resisted being lured back into industry by headhunters, won a university teaching and learning excellence award this year. Now, three years into his doctorate on leadership and interpersonal relationships, he comments: “We have the privilege of time, the privilege of thinking deeply about things.”

The FME, which made these career changes possible, is a charity founded in 1960 and funded by corporate donations to help develop management education institutions, skills and knowledge in the UK. Its teaching fellowships have helped hundreds of experienced managers join business schools and become fully fledged academics, through programmes covering teaching, research, pastoral care, consultancy and delivery of executive education.

Would-be FME fellows need to show commitment and evidence of aptitude for academia; applicants should have a higher degree, such as a Master’s, doctorate or MBA.

“They have an interest and appetite for learning,” says Mike Jones, FME ­director. They are likely to be in their forties. “We are looking for people who are going to do at least 10 years as a business school academic,” he says. Former FME fellows include John Arnold, dean of Manchester Business School and Howard Thomas, dean of Warwick Business School.

The FME pays 50 per cent of fellows’ salaries, with the university where the fellows work funding the rest. Fellows earn about £40,000 ($76,000) a year – often 50 per cent less than in their previous occupation. Across the sector, the FME spends £160,000 annually on fellows. As business schools are the fastest growing sector in university education, Mr Jones estimates the UK’s 130 schools need 450 new academic staff a year to cover growing student numbers and retiring faculty. Yet, while he has no trouble finding high-quality applicants for fellowships, he has “huge trouble in finding schools who will take them”.

The difficulty is that the research assessment exercise (RAE), on which funding hangs, means universities are anxious to recruit those who already have an academic pedigree. This can deter them from taking on FME fellows even though, during their two to three-year teaching fellowship, they are supernumerary and therefore not included in the RAE process.

Also, new universities, in particular, may lack the culture to support and develop fellows’ research capabilities. Nor does Mr Jones want his fellows in “student factories”. “I’m not prepared to fund somebody for three years to stand in front of 200 students a time every day. I want to train academics.”

His fellows, he says, want to make a difference to the quality of management: “They are passionate about connecting business with business school.” They also inject relevance into research and teaching.

Timothy Clark, professor of organisational behaviour at Durham and mentor to Ms Hodges, says the fellows bring practitioner experience, different perspectives and novel ideas – and make existing staff reflect on their teaching.

“They have been greatly welcomed,” he says. “They are confident; they have been successful; they know how to speak their mind.”

Schools need strategies to recruit talent

Della Bradshaw outstanding query on this.

It is the number one worry on the list of business school deans from New York to Newcastle: how to recruit the best faculty when fewer PhD students, the bread and butter of academic employment, are graduating each year and a growing percentage of the academic elite is turning to better paid Wall Street or City of London jobs.

In the US, Richard Sorensen has been watching the changing scenario during his quarter century as dean of Pamplin College at Virginia Tech. He is champion of the doctoral faculty shortage initiative within the AACSB, the US business school accreditation body, charged with finding ways to recruit more faculty. Six years ago, he says, US business schools had 1,600 PhD students graduating; two years ago they had just 1,100.

Although that looks like a shortfall of 500 graduates a year the situation is even more serious. Of the 1,100 PhDs who graduated two years ago, 300 earned their degrees by mail and are not eligible for the tenure track advancement afforded to university-based colleagues.

The biggest faculty shortages are for those teaching finance – new finance PhD graduates are just as attractive to Wall Street and the City as they are to business schools. All of which means the cost of hiring finance faculty is rising rapidly. New PhDs who opt to teach finance at business school can earn salaries of $200,000 a year and more in the US. By comparison, the average salary for a new business PhD going into a US business school in 2005 (the last year for which data was available) was $93,780.

Marketing professors and those teaching accounting are also in short supply.

Prof Sorensen says the situation is not all doom and gloom, however, and that business schools in the US may be turning the corner. Initial soundings for PhD graduates for the 2005-06 academic year suggest that the numbers might be creeping slowly back – up to 1,200.

One idea being promoted by the AACSB to bring in more faculty is similar to that implemented by the Foundation for Management Education in the UK. That is, training those working in industry with appropriate qualifications to become clinical professors. Although a PhD is the preferred qualification, a masters degree or equivalent (an accountancy qualification, for example) with years of relevant commercial experience, would also count.

The FME gives two years’ training and other support to managers making the transition if they already hold a doctoral degree, and three years if they are educated to masters level. The AACSB is planning to run a series of five-day seminars starting next month to introduce would-be faculty to the ways of the academic.

The first schools taking part in the scheme are both in California, the Merage school at UC Irvine and the Marshall school at the University of Southern California, but executives from other regions and countries have applied for the programmes. Prof Sorensen believes there is a real possibility of ramping them up to develop more clinical faculty.

A second way for schools to attract top faculty, says Prof. Sorensen, is to persuade those from other rigorous academic disciplines to switch to business disciplines. Many top US business schools recruit faculty this way.

The third solution for US schools, he says, is to recruit from overseas, although many are reluctant to do this. “Many of the US schools don’t know the quality of the business schools in other countries,” he says.

Such a move can also cause bad feeling. Many Canadian business schools say that once graduating PhD students get their certificates, they head straight for the higher salaries south of the border.

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