Academic or commercial chief?

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As the competitive pressures on European business schools mount, one might expect them to seek a stronger infusion of talent from commerce and industry into the top job of dean or principal – a unique role that combines the responsibilities of chairman, chief executive and chief academic officer in differing proportions.

In fact, the vast majority of deans come from the academic world. Of more than 100 business schools in the UK, fewer than half a dozen deans or equivalent have come into the job with significant commercial or industrial experience, says Jonathan Slack, chief executive of the Association of Business Schools. The picture is much the same across the rest of Europe.

“The tradition has been that people have come up within higher education,” says Mr Slack. Most schools, he adds, are already multi-million pound businesses: “They have got to where they are – which is to be very successful – by being led by people who have come up the academic route. Of course, they are very keenly aware that they are in business and need to be close to business, and their clients expect a business-like response from them.”

The standard argument in favour of this approach is that, without an academic background or a sound understanding of how the academic world works, a dean would lack credibility with faculty, which could make their job harder.

On the other hand there is a “halo effect” that comes from having a dean with strong academic credentials and a high profile in industry – so long as they are able to handle both roles. For example, Lord Currie of Marylebone (David Currie, a well-known expert in economics forecasting) was appointed dean of City University’s Cass Business School in January 2001 and named as founding chairman of Ofcom, the telecoms regulatory body, 20 months later.

The interval helped Prof Currie gain credibility with faculty and understand the school’s culture and processes, Cass says, but now it derives a spin-off from his Ofcom role. “David’s high profile at Ofcom has certainly helped in our efforts to establish ourselves as a first-class institution and global player,” says Henrietta Royle, chief operating officer.

To adjust to Prof Currie’s dual role, a devolved management system has been introduced in which he sets the school’s strategic direction in conjunction with senior management, but day-to-day running of the school is overseen by the deputy dean, Steve Haberman, and Ms Royle.

Although business schools are usually businesses in themselves, the vast majority are linked with, or part of, a university, and in many cases benefit from a shared back office, free or low-cost rent or cross-subsidy from the undergraduate to the masters programme. These arrangements allow the school to shelter, to a greater or lesser extent, under the larger institution’s wing.

Significantly, two schools that do not have such a link or receive any state funding, Henley Management College and Ashridge, have taken an unconventional approach when appointing their dean or equivalent.

At Henley, Chris Bones was appointed principal in January this year after 22 years in business, working for Shell, Diageo and Cadbury-Schweppes, where his last job was director of group organisation effectiveness and development. Having become an expert on human resources issues and executive education – and a client of Henley – he says the principal’s job there was “one of two or three jobs I always wanted to do”.

To Mr Bones, most business schools seem to be far less relevant to business, in terms of the advice they can offer on practice, than consultancies or other organisations. “They don’t talk the language of management, but the language of academics,” he says. “The successful business schools in the 21st century will be those that can talk both languages equally well.”

At Ashridge, the status of the school is emphasised by the title of its leader – chief executive. In 2003 Prue Leith, the internationally renowned culinary expert who is also chair of the school’s governors, was looking for a chief executive and turned to Odgers Ray & Berndtson, the headhunter.

“My brief was that we didn’t want an academic and that they should trawl only the business world,” she says. “Ashridge is a business, we don’t get any grants or go down the funding route, so the school has to practice what it preaches.”

Ms Leith felt that the strength in marketing the school would need in its chief executive, if it were to prosper in a challenging environment, would come only from the business sector. However, Odgers advised her not to turn her back on the academic world, where there were potential candidates with the required business background.

This led to the appointment in the summer of 2003 of Kai Peters, who was not only dean of the Rotterdam School of Management at Erasmus University in the Netherlands, but also the owner – and former managing director – of a German publishing company and board member of several Dutch companies and organisations. “Kai has been fantastic,” says Ms Leith.

However, the few businesspeople that have landed the top job at schools have often struggled with the cultural and historical differences between their new and previous worlds, says Mr Slack. “One or two have said that when they were in business, they used to pull the levers of power and things happened, but in universities they pulled the lever and it came away in their hand. One or two have given up in frustration.”

A notable exception was Leo Murray, a former director at Rothmans International who was director of Cranfield School of Management for nearly 17 years until he retired in May 2003. He is remembered among other achievements for building the executive-class Cranfield Management Development Centre. (The current director at Cranfield, Michael Osbaldeston, has also straddled both camps, having been dean and then chief executive at Ashridge before a spell as head of global learning at Shell International.)

Even in a non-university affiliated school, Mr Bones says he “can lose the will to live occasionally, but it doesn’t happen as often as some people thought it might”. He is grateful not to have to deal with the politics of university-based business schools, and has wasted no time in introducing a new faculty structure based around the key issues for businesses and public sector organisations, and the dilemmas which managers face, rather than a more traditional university-type structure.

“Managers [at client companies] will only want to work with us if we have something relevant to say about the things sitting on their desks today,” he says. “The vast majority of the faculty have got behind [the new approach] and see the logic of it,” he says.

As yet, appointments such as that of Mr Bones are rare exceptions. Whether there are more might depend on just how challenging the business school environment becomes over the next few years, and the extent to which Europe’s universities are able or willing to shelter their business schools from the full force of international competition.

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