By the time the 46-year-old John McArthur became the seventh dean of the Harvard Business School in 1980, the finger-pointing had already begun.
American business was in crisis, the Japanese were ascendant, and Harvard Business School—the holiest of corporate temples—was viewed by critics as something of a culprit for churning out MBAs obsessed with profit and a horizon no longer than a quarter worth of income statements.
Japan Inc. had gained so much market share in autos, electronics, and supercomputers, causing massive layoffs of U.S. manufacturing workers, that many believed whole American industries could be obliterated.
Harvard Business School—the place where many of America’s corporate elite had been educated—became a convenient scapegoat for what was wrong. The attacks would even come from within. Little more than a year after becoming dean, McArthur read a scathing 1980 essay written by two Harvard professors for the Harvard Business Review, “Managing Our Way To Economic Decline.” The pair decried MBA programs for turning out people more interested in manipulating numbers than in making products.
AS DEAN FROM 1980 TO 1995, HE STEERED HARVARD BUSINESS SCHOOL INTO THE MODERN ERA
McArthur, who once taught courses on corporate finance, even faced criticism from his new boss, Harvard University Derek Bok who publicly challenged the school’s academic legitimacy, criticizing HBS for its narrow emphasis on the case method and the training of private enterprise managers.
McArthur’s death at the age of 85 on Aug. 20th brought many well-earned, even predictable accolades but little to no detail on the daunting criticism he had to confront as dean. Time tends to diminish the challenges of the past, but McArthur had plenty of them, survived and ultimately thrived over a 15-year stint as dean of HBS from 1980 to 1995.
A compassionate and visionary leader, he did not look tor act he part of a heroic chief. In his short sleeve shirts, wire-rimmed eyeglasses and rumpled suits, however, he steered HBS into the modern era, building the faculty through the recruitment and promotion of outstanding professors, strengthening research, expanding executive education, and launching major initiatives in ethics and social enterprise.
QUIETLY LED THE SCHOOL WITH HUMANITY AND DEEP INTELLIGENCE
The numbers give a sense of his impact, though little justice to his legacy. McArthur increased the annual budget for research and course development at Harvard Business School fivefold to $50 million from $10 million, boosted the school’s endowment nearly sixfold to $600 million from $106 million, and raised enough money to increase the number of endowed professorships to 81 from 50.
He is remembered for all those accomplishments, but just as importantly, for leading Harvard Business School with humanity and deep intelligence. “He always was so smart and way out front,” recalls Angela Crispi, executive dean for administration at HBS. “But it was his kindness and his warmth that was an extraordinary gift. He wanted to know you as a person. He would read the faculty’s books and write them handwritten notes. If a staff member got a promotion or a new house, he would say pick out some tools and I’ll get them for you. When my son was born, he showed up at my house with a Polaroid camera. He said, ‘All parents want to take pictures of their children.’ And I didn’t even report to him at the time.”
A Canadian, McArthur arrived at Harvard Business School as an MBA student in 1959 after graduating from the University of British Columbia two years earlier with a bachelor’s degree in forestry. When admitted to HBS, he had a competing offer from the Sloan School at the Massachusetts Institute of Technology. He and his wife, Natty, were all that much impressed with MIT’s student housing, so they walked along the Charles River to Harvard.
ACCEPTED TO THE MBA PROGRAMS AT HARVARD & MIT, HE CHOSE HBS THANKS TO A SUNSET
“We walked up and we got to the footbridge, and the sun was going down behind the stadium,” he recalled in a 1993 Boston Globe interview. “The business school was between the sunset and the river, and it was beautiful, and we decided sitting on the footbridge to go to Harvard instead of MIT.”
After earning his MBA in 1961, McArthur never really left the school for the next 34 years. Granted a scholarship to pursue a doctorate at HBS, he jumped at the chance, receiving his degree in 1963. “I felt guilty about having scholarships all the way,” he told the Globe, “so I decided to teach for five years.”
McArthur began teaching at the school while still a graduate student, was named dean in late 1979. Unpretentious and wary of the limelight, McArthur quietly guided Harvard Business School through one of the most tumultuous economic periods of the postwar era. Critics attacked the school’s exclusive use of the case method to teach students business. They said the school hadn’t done enough to teach ethics to future business leaders. And some complained that international students were disadvantaged in class discussions, while others pointed out that little more than 20 of the 700 case studies featured women protagonists.
KEPT A LOW PROFILE, SHUNNING THE MEDIA AND SPEAKING ENGAGEMENTS
McArthur went to work on these and other issues quietly, behind the scenes to make progress. His leadership style was to accomplish things through gentle persuasion and guidance.“He was never directive, saying this is what we should do, but more working closely with people and planting ideas about the direction we should go in,” remembers Crispi. “And you never wanted to let him down.”
He kept a low public profile, shunning most media interviews and speaking engagements. He and his wife decided against living on campus in the dean’s residence, preferring to raise their two children in a more natural environment in the Boston suburb of Wayland.
Avoiding public attention or notice, McArthur made a difference. “He had the ability to have a vision of where something should go,” says Crispi. “He had this incredible chessboard. He knew exactly the direction the school should be headed.” He spearheaded initiatives designed to promote the teaching of ethics, procuring a $20 million gift to fund ethics from the former head of the Securities and Exchange Commission, John Shad. He encouraged good corporate citizenship, even guiding some students toward volunteerism and jobs in the nonprofit sector.