When Peter Todd stepped down as dean of McGill University’s business school in 2014, he said his intention was to “head off to rest, reflect and regroup.” After all, Todd had been dean for a highly successful nine-year run at the Canadian school during which he moved to a self-funded MBA program that initially ran into political opposition.
Todd, 53, apparently has had enough time to reflect and regroup. HEC Paris yesterday (July 8) announced that the long-time professor of innovation and information technologies, will become its next dean, effective Sept. 1.
Todd was chosen after what HEC-Paris described as an “exhaustive selection process” that led a search committee to study more than 20 candidates. He was among seven finalists who underwent “an intensive interview process about their experience and strategic plans for HEC,” according to the school. The final decision on his appointment was made by CCI Paris Ile-de-France President Pierre-Antoine Gailly.
A BOLD AND CONTROVERSIAL MOVE TO SELF-FUND THE MCGILL MBA PROGRAM
Todd succeeds Bernard Ramanantsoa, who has led HEC since 1995, a time that has brought the institution increasing prominence as one of the leading European business schools. HEC said that Ramantsoa, who was consulted on the choice, has been able to “greatly transform the school by giving it a true international dimension, ensuring renowned academic excellence and developing management research.”
Todd brings considerable experience to the job, most notably his stint as dean of the McGill Desautels Faculty of Management, where he faced down heavy resistance to a bold plan to make McGill’s MBA program self funded. At first, the Quebec government threatened to fine McGill but backed down in 2011, recognizing the Desautels MBA as a specialized program that could be excused from the provincial government’s tuition cap.
That bold and controversial move led to a massive increase in tuition, but one that was badly needed to bring in cash to better fund the program. Tuition for McGill’s two-year MBA had been a fraction of market rates, costing only $3,400 in Canadian dollars in 2009. At the time, the school was losing $10,000 on every MBA student. After Todd got his way, the school has since increased the full tuition to $79,500, began more actively recruiting international students, added scholarships and an international academic experience. The school also reduced the size of the entering class in its MBA program to 75 from 125 students.
‘BY MY ESTIMATE, THE OPTIMAL CLASS SIZE FOR OUR MBA PROGRAM WAS ZERO’
But the changes caused an uproar, at one point leading to a $2 million fine for violating provincial tuition guidelines. In a recent essay written for the website of the AACSB International, the business school accreditation agency, Todd explained the decision. “By my estimate, the optimal class size for our MBA program was zero,” Todd wrote. “Our MBA program was completely unsustainable. We admitted about 120 students per year to our two-year full-time MBA program, for which government-regulated annual tuition and fees were less than $2,500.
“We received an additional $7,000 government subsidy per full-time student per year. However, it cost us approximately $20,000 per student to deliver the program, which meant that we lost nearly $10,000 each year for every MBA student we admitted. The government would not allow a substantial tuition increase due to a powerful student lobby and strong public opposition to higher tuition rates. Something had to change.”
He smartly enlisted the support of the university’s president and board, alumni and business leaders in gaining approval to privatize the MBA program. More controversy ensued with his decision to hike annual tuition 12-fold immediately when critics argued for phasing in the increase over several years. The end result: While doubling the school’s operating budget to $40 million per year, Todd also reduced the portion of the budget funded by the government to 25% from 75%.
TODD WILL FACE A SIMILAR CHALLENGE AT HEC
That experience may well come in handy for Todd’s forthcoming role at HEC. Starting in January of next year, HEC will no longer be a department of the Paris Ile-de-France Chamber of Commerce. Its new status, the result of the passage of a law last December, will provide HEC with a greater degree of independence to seek funding from benefactors.
Despite the big jump in tuition at McGill, Todd left the deanship in good stead. In a farewell gift, faculty, students, alumni and members of the Desautels faculty advisory board raised more than $518,000 for a scholarship, named for the dean and his wife, Connie, to assist a bachelor of commerce student who receives an international internship with a non-profit.
Among other things, Todd oversaw a highly successful fundraising effort at McGill, bringing in a $32 million naming gift for the business school from Marcel Desautels, the former head of Creditel of Canada, the country’s largest commercial credit and debt recover bureau. When Desautels kicked in $22 million to the school in 2005, it was the largest donation ever made to a Canadian business school. A subsequent $10 million gift three years later led to the creation of the Marcel Desautels Institute for Integrated Management.