Madhav Rajan: ‘I’m Exactly Where I’d Like to Be’

Incoming Dean Madhav Rajan

Incoming Dean Madhav Rajan

Why are you here and not somewhere else?

I guess I’m just lucky. Steve Jobs famously said that you can never connect the dots looking forward but only backwards. However, considering my background, the things I have done and where the new role might lead me, I’m pretty much exactly where I would like to be. In particular, I believe I think very similarly about academic life and research as does the University of Chicago: I share the belief of using the latest research as a basis for teaching, business practice and policy making.

Speaking of research, how did you discover your passion for accounting?

I wouldn’t say this is how I became an accounting professor. One makes several decisions for all kinds of random reasons. My older brothers were engineers, which is the standard thing that everyone does in India. And I thought I didn’t want to be exactly like my brothers, I wanted to do something different. So, I decided to study ‘commerce’, which is an equivalent of Wharton’s undergrad business degree. However, becoming an accounting professor obviously was not on my radar.

Later, I moved to pursue a masters degree at Carnegie Mellon University where my father worked. I did well and eventually a faculty member asked me whether I had ever thought about doing a Ph.D. – I hadn't. But they offered me funding and I thought, "hey, getting paid to study, that’s really cool! This particular professor was in accounting and that’s how I also ended up in accounting. However, Carnegie is very unique in not having an economics department separate from the business school. I did all the coursework for economics even though I majored in accounting.

Even then I wasn’t sure I would become an academic. Many of my Ph.D. friends ended up in consulting and I always thought the same would happen to me. But I liked the academic work and I was successful at it, so when I got a job offer from Wharton it was opportunity to keep going.

What made you take the step from research to school administration later?

When I joined Stanford, they hired me as faculty member because they liked the research I was doing. A year later, the head of the accounting department stepped down and asked whether I would be interested in overseeing the area. Being still quite new at the school, I thought I needed to engage in school matters as a service.

However, the intersection of faculty that have interest in working with the school administration and faculty who are at least mildly competent at it, is extremely small. If you exhibit even a little bit of talent, or just don’t say no, you will keep getting asked to do more. Eventually 7 years ago, I join the Dean’s Office. First, I thought it would be an interesting thing to try. I think I wasn’t fully aware at the time that if you take that step and if you are successful in the new position for a while, it’s very hard to return to being a pure academic.

At Stanford, I oversaw the MBA program and a part of faculty matters. Some time ago, when former Stanford dean went on a sabbatical, I became the acting dean and here is where I am now.

How do you see your new role at Booth? What areas do you plan to focus on?

I think the big difference being the Dean instead of a Deputy Dean is that the focus shifts from internal to external. I expect to spend perhaps 50% of my time being the face and voice of the school towards external audiences, primarily the alumni. That’s the big change and it’s particularly important now when the university is running an ongoing fundraising campaign, which has been a slightly disrupted by the transition. Therefore, getting into this role will be a big priority from the beginning.

The second area that I’m keen on is connecting Booth more closely with the university. Booth has largely been a stand-alone entity and the university would like to see Booth taking on a bigger role. This was a considerable part of my work at Stanford.

What would this mean for Booth students?

One thing that I want to push for is increasing the number of joint degree students (JD, MD, computer science etc.) to ~25% of all degrees awarded. That’s a lot, but Stanford, an admittedly smaller business school, is almost there now. There are joint degrees at Booth already but very few students actually do them. So, I’m very interested in understanding why and identifying the pain points.

Secondly, we may be able to better serve the University of Chicago undergrads. I spent 12 years at Wharton and I always loved teaching undergrads, they were amazing students. Quality of undergrad students at Chicago has gone up dramatically in the past 10-15 years. For instance, the econ majors are a great student body and Booth should engage them more.

What opportunities for undergrads do you see specifically?

Many of Chicago’s econ majors eventually end up doing an MBA. Perhaps, we could offer them to the opportunity to take some Booth courses now, go away to work for 2 years and come back to finish their MBA. The 2+2 model, wherein you apply to MBA as a senior at college and get deferred admission, is currently very popular at HBS and Stanford. Booth doesn’t do that too much yet. But it’s a great pool of talent, at Stanford it forms about 20% of the class.

How much room for collaboration do you see at the faculty level?

We should consider engaging more with other parts of the university in research. I see Booth as a preeminent institution that believes in empirical research, data and analytics. But that world is changing – you have different types and sizes of data sets and new processing tools. Booth needs to remain at the forefront, and to that effect, collaborating with the computer science and other departments of the university would be beneficial.

Historically, Booth has been reputed mostly for finance. What is your perception of that?

I think about Booth as an economics-based school and finance is just one application of that. When you look at the current faculty, economics, finance and accounting are certainly huge areas of strength. But at the heart of all these disciplines are data and analytics. Booth should profile itself accordingly. That’s where the world is going and we are uniquely positioned due to our strengths.

Marketing is a good example. Externally, Booth doesn’t seem to have the reputation for being a marketing school. But we have a phenomenal marketing group that is very good at the quantitative aspects of marketing. The trend towards more a more data-driven approach to not just marketing but also other functions, is clearly in our favor. We just need to capture it.

There exists a perception that Booth produces CFOs or COOs but Stanford and Harvard produce CEOs. Do you think there is any merit to this argument and if yes, should Booth try and change that image?

I think data doesn’t really support that claim. Harvard and Stanford are general management schools, they don’t offer any concentrations. So maybe that’s where the perception comes from. Regardless, we should definitely aspire to change that perception. Anybody who comes to a school like Booth has the ability to become a general manager, entrepreneur or a c-suite executive.

What students actually do at Booth has changed dramatically over past 10 years. Entrepreneurship is the top concentration now. Investment banking no longer tops student target industry surveys, more people want to work in technology. Our aspiration should continue to be this: being the best school that provides discipline-based learning in the most important business fields and let students decide where they want to go.

Recently, there is an increasing debate over the usefulness of a business education and MBA programs, in particular. What is your take on this?

If you take the top 10-20 business schools, the MBA market has not changed significantly. However, the market below that market has almost completely dropped out, with second-tier schools struggling to fill even their full-time programs. Students question the ROI of doing an MBA and losing their job security. As a result, they are increasingly interested in evening or part-time programs.

Nevertheless, applications to Booth have been going up and students’ caliber in terms of GMAT or GPA has also improved dramatically. People still see the value of a top MBA and I don’t think it’s going to change. However, the set of skills demanded by industries is evolving and we need to adapt. Whether it’s entrepreneurship, machine learning or whatever else. If we keep innovating, we will be fine.

In some parts of the world such as Europe, one-year program have become the standard MBA format. Do you think Booth will ever move in that direction?

Europe has moved there, Asia is mixed. But essentially, no top US school has followed that route and I don’t see it that changing. Treating an MBA as a purely academic degree that you finish in 10 months would not create the same value in terms of skills, connections or the opportunity to do an internship.

However, I see changes in what you actually do during the two years. Be it joint degrees or other experiences, the ability to skip basic courses if you have a specific background. I can see that happening.

As you are about to move to a new city, do you have a list of things you would like to do in Chicago? What are your hobbies?

I honestly don’t know enough about the city yet. My wife and I definitely want to do the architecture tour. This weekend we are going house-hunting. We would like to live downtown like all the MBAs, although probably not in MPP. :-) Both at Wharton and Stanford, we lived in the suburbs so I’m quite excited about exploring city life.

With respect to hobbies, I used to do trivia. At Stanford, I organized trivia contests for faculty and the executive program participants. Perhaps I’ll get to do at Booth as well, at some point.

Finally, how would you recommend MBA students to make the best use of their time at school?

At Stanford, I used to tell students not to feel the need to do everything right now. I think MBA students tend to be highly driven by what other students are doing and I would discourage that. Take your time and enjoy the experience. For almost all of you, this is the last time you will be in school. There is plenty of time after you graduate, so do not neglect the academic experience. Also, don’t obsess about the first job and the recruiting process. A vast majority of you will change your job within 2 years of graduation– it’s just another stepping stone.