In the 15 months since Madhav V. Rajan took over the deanship of the Booth School of Business at the University of Chicago, Booth has won yet another Nobel Prize for a faculty member and landed in first place in U.S. News’ ranking of the best full-time MBA programs for the very first time.
It would be temping to say that Rajan, who had spent 16 years at Stanford’s Graduate School of Business and who oversaw Stanford’s MBA program from 2010 to 2016, has the magic touch. But the former accounting professor-turned-academic leader thinks himself the beneficiary of “dumb luck.”
Regardless, Rajan is off to an incredibly fast start for a new business school dean, virtually insuring that his deanship will be as impactful as Edward ‘Ted’ Snyder who helped to significantly raise the visibility and reputation of the school from 2001 until 2010. Though Rajan’s official start date was July 1 of last year, he began working on Booth’s behalf in April, before his separation from Stanford.
HELPED TO REPLENISH YOUNG TALENT IN FINANCE & ECONOMICS
“In many ways, starting in April really helped to get it going,” says Rajan, who succeeded another former Stanford Senior Associate Dean Sunil Kumar at Booth. “The normal trajectory might have been you come in, you do the listening tour, you learn and I just didn’t have that option.”
Since officially arriving in July of 2017, Rajan has:
- Raised more than $200 million for the school’s $950 million capital campaign, part of the university’s effort to bring in $5 billion in philanthropic support.
- Completed an extensive listening tour of faculty and alumni, racking up roughly 180 meetings with Booth alumni.
- Hired away from Harvard University a superstar professor of behavioral economics to lead a new center in human machine intelligence.
- Launched a novel economics-business track for University of Chicago undergrads that will have Booth faculty teach 20 sections of undergraduates in this academic year.
- Begun a data analytics concentration in the full-time MBA program.
- Put greater emphasis on faculty recruiting, helping to replenish young talent particularly in the areas of finance and economics.
- Opened a new university campus in Hong Kong, one of the three base locales for Booth’s Executive MBA program.
As if that is not enough, Rajan is now planning to launch a $75 million fundraising effort exclusively devoted to MBA scholarships at a school that already is fairly generous in awarding the best incoming students financial aid packages. He will zero in on beefing up Booth’s faculty strength in marketing. And he is considering a building expansion because the Charles H. Harper Center on the Hyde Park campus and the Gleacher Center in downtown Chicago are already at capacity.
RAJAN ON THE SIMILARITIES & DIFFERENCES BETWEEN STANFORD GSB & BOOTH
In a wide-ranging interview with Poets&Quants in the dean’s corner office overlooking Frank Lloyd Wright’s world-famous Robie House, Rajan seems comfortably settled in his new role. He spoke candidly about the differences between the business school cultures at Stanford and Chicago, the value of the MBA, getting approval to teach Chicago undergrads, and arriving at Booth just in time to enjoy the school’s No 1 rank in U.S. News and the awarding of a Nobel Prize to behavioral economist Richard H. Thaler, the school’s eighth Nobel.
“Having dumb luck is a great thing,” he quips. “So you take a job, and you raise money, and you win a Nobel Prize and U.S. News says you are number one. It’s all been good. I’ll take dumb luck anytime. It’s been wonderful, super fun, and it probably has gone way better than I had any right to expect.”
Rajan believes he has taken over a school that is in great shape. “But, he says, “there is a way to go on a number of dimensions. This school has always had the best faculty and that is part of its reputation. But if you go back over the past four or five years, we’ve done well but not super well at recruiting. It was below the standards the school had set for itself so that is one of the issues I wanted to fix when I came in. In fields like finance and economics, which are the lifeblood of the school at many levels, we weren’t doing that well. So turning that around was one of my big priorities coming in last year.”
18 NEW FACULTY RECRUITED, INCLUDING A HARVARD SUPERSTAR
The new dean has already overseen the recruitment of 18 faculty, offering first time tenure-track appointments to assistant professors from Harvard, Stanford, MIT, Columbia, and NYU. Among the 18 new recruits, Booth brought aboard six profs in finance, four in economics, and a pair in econometrics and statistics.
Of all the hires, however, the biggest one was Sendhil Mullainathan, the renowned behavioral economist from Harvard University, who is expected to help develop a new discipline at the intersection of human and machine intelligence. A former MacArthur Fellow, Mullainathan helped co-found the non-profit organization ideas42, which applies behavioral science to positively change lives; and co-founded Abdul Latif Jameel Poverty Action Lab.
Rajan says “hiring Sendhil was a massive stroke of luck. A lot of people did a lot of work to recruit Sendhil here. You never want to say the dean does faculty recruiting because the faculty would want to fire me. John Heaton was the faculty dean and he manages all of those things. But obviously I met Sendhil, and we had lots of discussions about what he wanted. He is a superstar. It is a very big catch, getting someone with his stature at the prime of his career and doing things that are at the heart and soul of what we want to do at the school.”
‘CHICAGO BOOTH IS ABOUT DATA’
In fact, says Rajan, the Sendhil hire has already helped overall faculty recruiting. “A lot of people knew that he was thinking of coming here and that created some buzz as well. It will bring to Chicago people who are interested in doing things that combine behavioral science and economics which is increasingly a big field where we are uniquely positioned.”
Rajan says he always thought of Booth as a school that specializes in empirical research and its application to finance. In the late 1960s, the Center for Research into Security Prices was established at Booth, an initiative that allowed Booth’s finance profs direct access to massive amounts of data on the markets and trading.
“Chicago Booth is about data. In many ways, I feel like this is a school that was ahead of the curve and the world has moved to that model, and that has been massively helpful to the school. If you think about an area like marketing, for example, we have ended up with the best quant marketing group in the world simply because they did data in marketing long before anyone else. That to me is what we have to build upon. For any faculty who want to do novel, risky big data projects, this is the school that will support them and enable them to do it. So hiring Sendhil was fantastic because he is going to come and run a new center for us on human machine intelligence. and so this is a center that we want to do anyway. Having Sendhil come and run it was just a wonderful confluence of things.”