Last updated: May 17, 2004 2:34 pm

Working for $1 a year

Few business school deans truly practise what they preach. Kenneth Dunn is one. A former finance and economics professor at Carnegie Mellon’s business school in Pittsburgh, Prof Dunn left in 1989 to put his teaching into action and become a portfolio specialist at Miller Anderson Sherrerd, which was subsequently acquired by Morgan Stanley Asset Management.

He made his millions at Morgan Stanley and decided to give back to the business school. Most men of money would get out their chequebook, but Prof Dunn did that and more. He became dean of the business school for just $1 a year.

His decision to forgo his dean’s salary was not announced with fanfares and flag-waving: word trickled out when Prof Dunn agreed to his first interview as dean with a Korean media organisation.

Few deans can boast - should Prof Dunn ever want to - that in the first year in the job he had doubled the cash given to the annual fund (the money given to the school every year), and in less than two years managed to raise $55m from a single donor to help support the business school. But that is just what he announced in March this year when Carnegie Mellon alumnus David Tepper gave the school its naming-gift

Mr Tepper cited the return of Prof Dunn to the school as one of the reasons for the gift but he is also a great fan of the way the school approaches business education, as is his former finance teacher. “We invented the science of management,” says Prof Dunn. “We believe we teach the fundamentals and the frameworks for solving problems. This school has huge strengths.”

He acknowledges the school has its own set of problems. In particular it is relatively young for a US school - started in 1949 - and still quite small with just 100 full-time faculty and 230 full-time MBA students. Perhaps even more significantly, 50 per cent of the alumni of the school have graduated since 1990, and there are just 7,000 of those. In comparison, one of the big US schools, such as the Wharton school at the University of Pennsylvania, has about 80,000 alumni.

That makes Prof Dunn’s fundraising efforts all the more remarkable but it also stymies his second aspiration as dean, to increase the profile of the school.

Building a profile overseas, and particularly in Europe, is one of Prof Dunn’s big aims. To date the Tepper school has spurned formal alliances, although it is setting up a branch campus in the Middle Eastern state of Qatar to teach undergraduate business education, as part of the country’s Education City initiative.

The programme is intended to draw in students from around the world and from different ethnic and cultural backgrounds. “It’s a small step but it’s a right step,” says Prof Dunn.

The first move in developing the school’s profile has been to articulate and focus on its strength. The jargon phrase is that Carnegie Mellon “owns the space where business and technology intercept”. The school has been particularly woolly in the past over its strategic position, promoting itself at different times as both a technology school and a general management school.

A first step was to get the message out through the website, which has been completely redesigned, a job Prof Dunn says had to be tackled. The previous website was “lousy” he says, and detracted from the school message that this was a school that was good at tech.

Prof Dunn has further backed up the marketing hype by building on existing relationships with other departments within the university, notably engineering and computer science, and developing both joint courses and degrees. Being a small school means faculty can be swift to innovate, he points out.

As a result of the website re-design more MBAs applied for the programme in the second round of applications last year (after the new website was in place) than in the first round - highly unusual in US business school circles. “It tells me the things we are doing are working,” says Prof Dunn. With admitted students for the class of 2005 having an average GMAT score of more than 690 for the first time, the quality of students is looking up. But it is as much about attracting applications from the right students as from the brightest. “We don’t want students who want a different kind of education [to the one they offer].”

When evaluating new projects Prof Dunn looks at three criteria. “I look at everything in terms of intellectual content, visibility and money. If it doesn’t do the first two, then it doesn’t fit.” One of the areas Prof Dunn is hoping to expand is executive education, particularly on the custom side of the business. “I think we need to develop partnerships with corporations, says Prof Dunn. “I would start with the people who recruit our students.” Executive education, as he points out, is one area that is profitable, particularly important for the man who is spending the money these days rather than earning it.

So busy is he planning new courses, attracting faculty and developing infrastructure that he no longer has time to teach classes in finance. But there is one course on which he does teach - ethics for the first year MBA students. Somehow, that seems particularly appropriate.

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