Why The B-School Dean Was Really Fired At George Washington

dean-guthrie_fileThe new programs helped Guthrie not only meet but exceed his annual revenue targets. In the year ended June 30th, the school’s revenue came in at $106 million against a target of $102 million. When Guthrie started three years ago, the school’s annual revenue was only $83 million. So the new dean had increased revenue by 27%, during a time when many business schools were retrenching.

This year, however, the university expected to keep $51 million of the school’s projected $102 million in revenue. Guthrie could retain the rest–some $51 million–to run the school. Instead, Guthrie spent $64 million and had only $42 million to hand over–a gap of $13 million. He was able to cover most of the shortfall with reserves and excess revenues (the school came in at $106 million), with the exception of the $2.5 million.

INVESTMENT WAS VITAL TO A TRANSFORMATION

Crucial to his transformation of the school was additional investment. “There is one statistic that is a perfect correlation with top 20 rankings,” says Guthrie. “It is expenditure per faculty member. The Top 20 schools are spending on average about $450,000 per faculty member on everything from research to career services. We were at $220,000. The agreement was that they wouldn’t completely change our budgeted expenses, but they would move them up gradually and I would pay for them from reserve funds.”

In the first year of his deanship, the university invested $7.5 million. In the second, Guthrie tapped into reserves for nearly $6 million more. But for whatever reason, now the administration wanted to pull back on the expansion plans. “We had an agreement and they wanted to cut way back,” explains Guthrie. “I said we already were not where we need to be. If we have to give the university more money, I don’t think I’m the right person for this. I didn’t come here to be the steward of a cash cow. I came here to build programs and make investments.”

That conversation occurred earlier this past summer. “I was feeling like I could maintain quality and run a school with a $60 million budget,” recalls Guthrie. “When I came in, the budget was $40 million and that was low for an elite school. They agreed to an ambitious plan and investment. Each year we knew we were going to be overspending but we would do that through a combination of reserve funds and university investment.”

‘I DIDN’T THINK THIS WAS THE RIGHT WAY TO GO’

He says the administration wanted his 2014 fiscal budget to be $57 million, some $7 million less than the school spent last year, and its net contribution to the university to rise more substantially. Guthrie figures he would have had to cut research funds for faculty, summer salaries for junior faculty, and other expenses. “I didn’t think this was the right way to go,” he says.

The business school, moreover, was in the middle of an accreditation review that required additional spending on faculty. A written report to the accreditation review committee is due in early September, while a site visit to the school is expected in December.

Guthrie made his case in a memo that he also shared with the deans of several of other schools at the university–a move that in retrospect hurt his standing with the administration. “I knew that the stand I was taking made it a pretty good chance they would say this isn’t working and let’s see it through accreditation. I decided I would be fine with it because I disagreed with the suggested budget cuts.”

Guthrie also suspects there was a personality clash with President Knapp, thought by some to be a mercurial leader who prefers that administrators toe the line. “They think i am a little bit uncontrollable,” says Guthrie. “And I understand how that makes them uncomfortable. We tried a lot of things here, and maybe it was too much too quickly. I do have a lot of passion for this school, though, and that has made me a successful fundraiser. In the end, I have enjoyed my time here, and I wish the school and the students the best.”

For now, the former dean of the school will remain at GW as a tenured professor. But he clearly didn’t come to George Washington merely to teach.

DON’T MISS: B-SCHOOL DEAN ABRUPTLY GONE AT GWU or THE B-SCHOOL DEAN WHO DIDN’T WANT TO BE DEAN

About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.