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It was on December 1, 1969 that Jay Light joined the faculty of Harvard Business School. And it was on December 2, 2009, some 40 years later, that he announced his retirement.

Prof Light, who is 68, will not stop work until next year, and says the decision to retire was not an easy one, but the timing felt right. In announcing his departure, Prof Light, who has been dean of the school since 2005, said: “[I am leaving] not because I am unhappy; this is the greatest job I’ve ever had. But it is time for a new leader.”

If he had confessed to unhappiness, it would not be hard to blame him, for the past five years have been some of the toughest years in the business school’s 101-year history. Even the ordinarily unflappable Prof Light admits that this year has been difficult.

The global financial crisis hit higher education hard, and Harvard University was hit harder than most. Its endowment fell 26 per cent to $26bn in the 2009 fiscal year, and suddenly the world’s wealthiest university was forced to slash budgets and eliminate some 275 jobs. HBS is less dependent on the endowment than some other parts of the university – it accounts for 20 per cent of its revenues, while some of Harvard’s schools rely on it for as much as 50 per cent of their budgets – but it still felt the impact.

Prof Light says the economic crisis has changed both how HBS operates, and what it teaches. “In periods of growth you put on costs, and one should take advantage of times like these to do things better and more efficiently,” he says glancing around his office, which is decorated with antique maps of waterways – he is an avid sailor and a voracious reader of the history of exploration. “We’ve had to rethink some of the things we do, and that’s a good thing.”

Earlier this year, HBS laid off more than a dozen staff members, and others have left through attrition and early retirement plans. The school made other cuts, too. It altered the way staff travel, for instance, reduced the use of temporary employees, and removed some on-campus dining options. “We adjusted early and quickly: we’re a leaner organisation and I think a better organisation,” says Prof Light. “We’ve had to scale back on the cost structure, but you have to make sure you keep your focus on what you’re trying to do.”

And what the school is trying to do, it should be noted, has not changed over the years. “We take in 900 students a year and we try to develop them into more effective leaders,” he says. “We try to sharpen their judgment, and give them an entrepreneurial perspective – a focus on where the opportunities lie. We’re trying to hone their ability to communicate, and give them an understanding of how to incorporate values and integrity into management, and finally, we’re trying to help them develop the courage to act in complex, ambiguous, and confusing situations.”

Even though the school’s mission remains the same, HBS is looking at new ways to develop its students, Prof Light says. This year, for instance, it is experimenting with a January “term”. The term – known as the immersion experience programme, IEP for short – is a three week-long intensive course that involves classes, company visits, and group project work. Some students will travel to countries including China, Vietnam, Peru, Brazil, India and Rwanda for their January term, while others will travel to California for a course on venture capital or remain in Boston for one on healthcare. The idea is to give professors the chance to deliver content in a new format with more intimate, workshop-style lectures, and give students the opportunity for global, experiential learning.

Such schemes are relatively commonplace in smaller programmes, where the organisation required is less demanding. At Harvard, 1,050 students will participate in the scheme.

The business school is also collaborating more closely with other graduate schools within Harvard, again something that schools such as MIT Sloan and Stanford have been doing for some time. In addition to the school’s five-year dual MD/MBA programme with the medical school, HBS recently launched a joint programme with Harvard’s Kennedy School of Government for students who aspire to careers that span policy and business.

Prof Light and the faculty have worked to incorporate the lessons of the financial crisis into its curriculum. In September, HBS introduced several elective courses aimed at giving second-year students a deeper understanding of risk management in the financial markets. It also added new material about the failure of Bear Stearns, the defunct investment bank, to its required course for first-year students.

Harvard has in recent years seen increasing competition from the other top US and European business schools. Prof Light measures the school’s success by its continuing ability to draw the best professors and the brightest students. Last year, 89 per cent of students offered a place at Harvard took up the opportunity – the highest “yield rate” of any of the leading business schools.

Increasingly, the school is looking to attract a younger student body. In 2007, it launched a deferred MBA admissions programme for undergraduate students. The programme guarantees college students a place in a future HBS class, contingent upon their graduation and the completion of two years of approved work experience. It is designed especially for those who might not otherwise consider a business school education – such as those who major in fields that are not traditional business school feeders. This year, applications to the programme rose 30 per cent, and its yield was 100 per cent.

While several other top US business schools admit students with little or no work experience, the drive to appeal to younger participants has provoked some concern among some industry leaders and recruiters. Today, the average age of HBS students is 27, and the average work experience is 4.5 years.

Some critics charge that students with less work experience will not add as much to classroom discussion. Others say that corporate recruiters might greet these new, untested MBAs with scepticism because they lack the managerial acumen that comes with experience.

Prof Light says: “The quality of our applications continues to go up … We’re constantly looking at two things: are we sure that we’re getting the best students to apply, and are we doing the same with our faculty? If so, we’re half-way home. It’s all about people in the end.”

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