The editors of the MBA student newspaper at Harvard Business School accused the administration of rival Stanford Graduate School of Business of “gross negligence” in handling a controversy over financial aid. The editorial, entitled “Can A Business School Die Of Shame?,” says the storm occurring over the issue is a case study in how not to do damage control. The MBA editors criticism of the dean of a school that is Harvard’s chief rival in business education is unprecedented..
For the past three weeks, Stanford Dean Jonathan Levin has been dealing with the fallout from the disclosure that the school’s long-time claims to only provide scholarship dollars to applicants and students on the basis of financial need is untrue. He has issued three public statements in three weeks about the issue, mainly focusing on a data breach that allowed one of the school’s current MBA students to access confidential financial aid data on the school’s shared network servers.
The student, Adam Allcock, found that Stanford had routinely granted fellowship money to students without regard to their financial needs, often favoring admits who were female and those from the financial sector, even though many had more savings than students who received no scholarship help or less financial support. His analysis also found what he termed “systemic biases against international students…This is inconsistent with a need-based financial aid system,” he wrote in an extensive report he did on the data.
‘A CASE STUDY IN HOW NOT TO DO DAMAGE CONTROL’
“We feel a tremendous amount of sympathy to our peers at Stanford GSB because had this happened at HBS, there is no doubt that our student body would be outraged beyond words,” wrote the editors of The Harbus in an unsigned editorial. “Not only is regressive economic discrimination in financial aid a breathtaking breach of trust, and a shocking disaffirmation of the school’s purported egalitarian values, but we believe that it also represents gross negligence by the Stanford Administration in their duty to uphold the most important element of any elite business school degree: the school’s brand.”
Though the school’s financial aid policies precede Dean Levin, who became dean in September of 2016, The Harbus editors took specific aim at how he has handled what has become the first public test of his leadership ability. “The response offered by Stanford administration offers a case study to MBA students in exactly what they should not do when in damage control,” according to The Harbus. “In seeking to explain the episode, Stanford GSB Dean John Levin diverted attention away from the core objection, focusing almost exclusively on the issue of the data security a serious technical breach of confidence to be sure, but one that pales in comparison to the revealed compromise in school values. In the few words he does devote to the true problem of the administration’s conduct, Dean Levin minimizes the systemic gender, economic, and national origin discrimination as a mere miscommunication about ‘base level’ versus ‘incremental’ fellowship awards. Instead of showing leadership by taking responsibility for these shortcomings, he offers only the vague promise to be ‘significantly more transparent about the principles and objectives being applied in making financial aid awards.’
“What are those objectives, exactly? In that same statement Dean Levin explains that ‘the school has offered additional fellowship awards to candidates whose biographies make them particularly compelling and competitive in trying to attract a diverse class.’ We have already seen that that group includes those who previously worked in finance who can help Stanford’s position on MBA program rankings by virtue of their high post-MBA salaries. But another set of students come to mind as likely beneficiaries of Stanford’s largesse: the prospective students who were also admitted to other top-tier business schools.
DEAN LEVIN ALSO CRITICIZED BY STANFORD UNIVERSITY’S OWN STUDENT NEWSPAPER’
“If these allegations are true and these implications are correct, then the administrators of Stanford GSB are saying loud and clear that they value their school’s competitive position vs. its peers more highly than they do the promises they make to its own students. It remains to be seen what the long-term effects to Stanford’s brand will be, but we hope that administrators from all MBA programs will look upon these allegations as a perfect case study for trust in branding: that of the bad protagonist.”
The Harbus editors have not been the first to criticize Dean Levin’s handling of the controversy. Allcock, the student who revealed that Stanford had misled thousands of applicants, students and alumni about its fellowship awards, also called out the dean after Levin’s first statement.
In a letter written by Allcock sent to his fellow students, Allcock wrote. “I didn’t hear a ‘sorry’ in your message, or even an admittance that what the GSB had been doing was wrong. Instead, I heard ‘sorry we got caught.’ The GSB secretly ranks students as to how valuable (or replaceable) they were seen, and awarded financial aid on that basis…The GSB also been systematically discriminating by gender, international status and more while lying to their faces for the last 10 to ~25 years.”
Chronology of What Happened at Stanford
|June, 2016||Some MBA student financial aid records are stored improperly in a shared folder|
|September, 2016||Jonathan Levin, a superstar professor in Stanford’s economics department, becomes dean of the Gradaute School of Business, succeeding Garth Saloner who had resigned|
|September, 2016||More financial aid records for MBA students became accessible on the same server, now totaling 5,120 financial aid applications from 2,288 students|
|January, 2017||First-year MBA student Adam Allcock accidentally gained access to the financial aid records on a shared network server open to the entire GSB community|
|February, 2017||Allcock informs financial aid director Jack Edwards of the data breach|
|February, 2017||Chief Digital Officer Ranga Jayaraman’s team begins to lock down the system, securing all files by early March|
|October, 2017||Allcock sends to GSB Dean Jonathan Levin a 378-page analysis of GSB’s financial aid policies, finding that the school had misled thousands of applicants and students for years|
|Nov. 17, 2017||Dean Levin publicly informs GSB community of breach and concedes the school misled applicants that all its fellowship awards had been granted on the basis of financial need when that was untrue|
|Nov. 30, 2017||Dean Levin apologizes for the data breach and says he was not informed of the problem until eight months after Allcock told Edwards in financial aid|
|Dec. 1, 2017||In a contrite email to colleagues, Chief Digital Officer Jayaraman says he is leaving his job after being fired by Dean Levin|
|Dec. 7, 2017||Dean Levin issues third statement in three weeks, conceding that the school’s financial aid policies have failed to meet the expectations of students and alumni donors and pledged that the school would be more transparent|
|Dec. 9, 2017||MBA editors of The Harbus at Harvard Business School accuse GSB Dean Levin of “gross negligence” in handling the controversy|