Michigan Ross Dean Scott DeRue To Step Down

Scott DeRue, dean of the Michigan Ross School of Business, is stepping down in May. Courtesy photo

In an unexpected announcement today (April 9), Dean Scott DeRue of the University of Michigan Ross School of Business told members of the school community by email that he will step down in May.

DeRue, dean since 2016 and a member of the Michigan Ross faculty since 2007 who was once named to P&Q‘s 40 Best Professors Under 40 list, says he is taking a job in the private sector, but did not provide further details on his plans. He says university Provost Susan Collins is planning to announce an interim dean and begin the search for a permanent successor.

“I am writing to you with mixed emotions, as this is one of the most difficult decisions I have ever made,” DeRue says in the email, obtained by Poets&Quants. “On May 23rd, I will serve my last day as dean of Michigan Ross. Shortly thereafter, I will assume a senior executive position in the private sector, with details forthcoming in early June.”

LAUNCHED AN ONLINE MBA, DOUBLED DOWN ON EXPERIENTIAL LEARNING

DeRue’s email, sent at 9:02 a.m. today, comes almost five years to the day he was announced as the youngest dean of a major business school in May of 2016. Through his five years in the job, the 44-year-old DeRue brought much energy, passion and personality to the job. An avid mountaineer, he has successfully summited some of the world’s tallest mountains, including Mount Everest and has led students and alumni on major climbs.

During his stint as dean, DeRue doubled down on the MBA program’s core differentiation, experiential learning, successfully launched an online MBA option, launched a major renovation of the school’s executive eduction facilities, and brought in an additional $50 million gift from the school’s namesake, real estate mogul Stephen M. Ross. DeRue’s response to George Floyd’s death made him one of the leaders in the business school community for his immediate actions on diversity and inclusion.

His decision, he made clear in his announcement, brought mixed emotions to the surface. “When I arrived in Ann Arbor in 2007 and joined the Michigan Ross faculty, it was my dream job. I was surrounded by my academic heroes, wonderful faculty and staff colleagues, exceptionally talented students, amazing alumni, and a campus community that embodies what it means to be the Leaders and Best. I felt a deep sense of pride and good fortune to be part of such a wonderful community, and after 14 years, I still wake every morning feeling the same way.

“Our community, and each and every one of you, holds a special place in my heart, and I will forever consider the University of Michigan and Ross School of Business my family.”

UPS & DOWNS IN RECENT YEARS

Michigan Ross’ Scott DeRue. Ross photo

Michigan Ross is ranked 13th in both the latest U.S. News ranking as well as the 2020 Poets&Quants ranking, having slipped out of the top 10 in recent years in both lists. In both rankings this year, the Ross School dropped one place from the previous year.

Ross has also had a rough time since coronavirus. It suffered some of the worst MBA application volume in recent years in 2020. Even as most of its peers saw a resurgence in interest in full-time MBA programs through extended deadlines and loose testing requirements, Ross app volume fell for a third straight year, slipping by more than 14% from 2019. Meanwhile, thanks largely to a liberal deferment policy, the school’s international population cratered to just 23% — a loss of nearly 30% since 2017.

However, in his resignation announcement, DeRue states that applications to the school’s degree programs have increased by 86%, indicating a strong app cycle in 2020-2021. In more good news, the Ross School was also the only one to rank in every one of the 13 specializations in the recent U.S. News ranking, as voted on by peers in graduate business education.

‘CAME AS A SURPRISE TO ALL OF US’

DeRue’s resignation “came as a surprise to all of us,” a current Ross student tells P&Q. “We are not sure where he’s headed besides the private sector, as he announced.

“We are hoping Ross can lure one of the deans from a top-tier school. It would be great to see an amazing public university business school reach that level of those private universities.”

Susan Collins, Michigan’s provost and executive vice president for academic affairs, sent an email Friday to the Ross community  titled “Ross Leadership Transition” in which she praised the outgoing dean and outlined the school’s plans for replacing him.

“During the 5 years he served as its leader, the Ross School has achieved many important accomplishments from enhancing programs for students, faculty research, and much more,” Collins writes. “While we will certainly miss his engaged leadership, this is an exciting next step, and I wish him the very best in this next chapter.

“I will very quickly begin the process of identifying an interim dean. I will be seeking feedback from the School’s Executive Committee, area chairs, and associate deans. The interim dean will serve until a new dean is appointed. The university will conduct a search for a new Michigan Ross dean, beginning with gathering input from the entire Ross community; details regarding a search advisory committee and timeline will be shared soon.”

‘MORE WORK TO DO’ ON RACE ISSUES

DeRue’s return to an undisclosed firm in the private sector completes something of a round trip for a person who came to the world of academics after spending five and one-half years in business. After earning his undergraduate degree in management from UNC’s Kenan-Flagler Business School in 1999, DeRue began his career at the Monitor Group, the strategy consulting firm acquired by Deloitte after it went bankrupt. He started in Monitor Group’s private equity business, called Monitor-Clipper Partners. DeRue then was a management consultant focusing on corporate and innovation strategy for both public companies, private enterprises, and nonprofits. After leaving the Monitor Group in 2003, DeRue worked as a marketing executive for Hinckley Yachts, a luxury yacht builder. It was then that he began work on his Ph.D. in management at Michigan State University’s Broad College of Business. He joined the Ross School faculty in 2007 after earning his doctorate.

Much of DeRue’s last year as Michigan Ross dean has been focused on race issues. In August 2020, the school announced that it had received a new major gift from namesake Stephen Ross to support new efforts at achieving greater diversity at the B-school. Following a major report in April 2020 from the Graduate Management Admission Council that described an improving landscape for graduate business prospects of Hispanic descent, but a stagnating one for Black candidates, DeRue acknowledged to Poets&Quants that in the top 25 U.S. B-schools, Michigan Ross was in the bottom quarter for MBA minority representation. The Ross School had 23.2% U.S. minorities in the Class of 2019, down slightly from the previous two years; in 2020, according to U.S. News, the incoming MBA class is up to about 27% minority, including 8.2% Black and 5.4% Hispanic.

DeRue’s Council for Diversity, Equity, and Inclusion — designated in his June 2020 “commitment to action” as the “primary advisory group for DEI-related initiatives and priorities, establishing goals and tracking progress with visible metrics and reporting, and mobilizing people and resources to ensure we achieve our shared goals” — was launched to help change that. The $6 million investment from Stephen Ross and Jeff Blau represents another step toward that goal, and one that already is paying off. DeRue says a day after the school announced the donation it has found its first student scholar to be part of the new program.

“We already have our first student coming in from Texas — our first Related scholar,” he says. “So she’s a pioneer. And so this year, both for our MBAs as well as our undergraduates, we’re seeing an increase in diversity in our class, and we’re really proud of that. But we also recognize that we have more work to do.”

In his resignation statement, DeRue takes care to note that among the Ross School’s accomplishments under his leadership is that it “achieved new records for gender, URM, and first-generation representation among our students, introduced DEI into core classes and new electives, and last year, 65% of our faculty contributed to our DEI mission through their research, teaching, and/or service.”

‘RACIAL JUSTICE IS A CORE PART OF B-SCHOOLS’ MISSION’

In a conversation about race and the B-school classroom with other deans from elite schools in October, DeRue said graduate business education leaders in the U.S. are “leading and lagging” on the issue.

“When I look across business schools, I see our students’ voices — their empowered voices — and their strong desire to be part of the solution to racial injustice and a broader set of diversity-and-inclusion-related issues,” DeRue said. “I think business schools relative to industry are proactively leaning in to these conversations and the really hard work that’s necessary to create awareness, to mobilize people to address racism in education, address racism in business.

“When we look across universities and business schools, I think more often than not we are coming to the realization that racial justice and other forms of justice are a core part of our mission — scholarship, research, teaching. … We have both an opportunity and a responsibility because we’re a pipeline of talent to industry. And so we’re leaning into these conversations, such as this one, because we’re coming to the realization that this is a core part of our mission.

“And if I compare that to industry: Many companies, many organizations around the world, I don’t think have woken up to the opportunity and the responsibility to have diversity, equity, and inclusion as a core part of their mission. And to those companies, I would encourage them to review closely the data on the value of diversity, the value of inclusion for business results, because if you care about business results you also care about diversity, equity, and inclusion.”

As he states in his resignation email:

“Looking forward, as we reimagine the future of business education and rebound from the pandemic, I am filled with hope and optimism knowing that Michigan Ross has a strong foundation to build upon and is positioned for a very bright future.”

See the next page for Scott DeRue’s entire resignation statement to the Michigan Ross community.

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