For Doug Guthrie, dean of George Washington University’s business school, two Thursdays ago was like most work days. It was to start off with a meeting.
On his calendar on August 22nd was an early morning session with University President Steven Knapp to discuss the business school’s budget. Guthrie wasn’t expecting it to be all that pleasant. After all, the university had been asking him to cut the school’s budget by $7 million to $57 million this year and he had been resisting the pressure to do so.
However, Guthrie would never see President Knapp–and there would be no budget meeting that morning. Instead the dean was called aside by Provost Steven Lerman and asked to follow Lerman to his office. “As we walked back to his office, I realized something more serious was afoot,” recalls Guthrie.
Moments after sitting down, Lerman announced: “We’re firing you.”
“I was quite stunned,” says Guthrie, 44, who had been recruited from New York University’s Stern School to become dean in 2010. “I had thought a possible outcome (of the budget issues) would be they would say we can’t get this to work and we need you to help us with the transition. But the provost said ‘it seems to us that we’ve reached a point where there is a lack of trust and a lack of ability for us to work together.’”
Guthrie asked about the university’s plans for China, an area he also had led for the university as its vice president for China, and about the business school’s upcoming re-accreditation plans. The replies were terse, leading Guthrie to believe his firing was given little forethought. Within 15 minutes, he was ushered out of the office, without his job as dean.
‘FUNDAMENTAL DIFFERENCES…WARRANT A CHANGE IN LEADERSHIP’
Guthrie’s abrupt ouster shocked faculty and students alike, but what truly surprised them was the public nature of the dismissal. At 11:30 a.m. on the Thursday of his firing, Provost Lerman issued a statement to the GW community in which he noted that “fundamental differences about financial and operational performance were significant enough to warrant a change in leadership.” The following day, in an interview with the student newspaper, Lerman made clear that Guthrie was fired over a spending spree that resulted in the dean going over his school’s budget by $13 million in the fiscal year ended June 30th.
But there may be more to the dean’s dismissal than that. For one thing, the overspending of the budget was hardly a surprise to the administration which had approved the dean’s plans for growth along with the investments required to increase the school’s revenues and stature. In fact, Guthrie had been hired with a mandate to turn George Washington’s business school into an elite player.
While it’s true that the overspending was higher than expected, the administration had been prepared for a significant overrun—every contract the business school had was approved by the university administration—but not $13 million. On April 22, at one of the dean’s regular check-in meetings with the administration, Guthrie told the university that he was expected to overspend his budgeted expenses by about $8 million. But he could cover the full amount of overspending with reserve funds and higher-than-expected revenues. The overage was largely attributed to the costs to launch and market several new online degree programs and executive education programs.
FIRED OVER A $2.5 MILLION HOLE IN THE BUDGET?
By the time the fiscal year closed, the overrun ballooned to $13 million. Even so, the business school was able to cover most of the additional expenses with its own reserves, except for about $2.5 million out of a total budget of $64 million.
When Guthrie, a professor at Stern, came to GWU in 2010, it was the university’s intention to put its business school on the map. The management professor-turned-dean aggressively raised standards for faculty and put in place more competitive packages to retain the best professors and recruit better talent. He increased spending on marketing to get the school greater visibility and to promote an array of new and innovative programs.
An expert in China who speaks fluent Mandarin, Guthrie launched two new degree programs in China, a Master’s of Finance, a Master’s of Accounting, and was working on a new program, a Master’s in Business Analytics. He also revamped the undergraduate business curriculum and started a new B.S. in finance, requiring a double major with the liberal arts. And Guthrie plowed ahead in Internet education, signing a deal with Pearson to launch a new online MBA program and to revamp the school’s existing online programs in project management and information systems technology, and a healthcare MBA.