What’s New At Chicago Booth? Plenty

CREATING A NEW BUSINESS ECON UNDERGRAD TRACK ‘WASN’T WITHOUT CONTROVERSY’

The single biggest change, however, has to do with Rajan’s goal to increase the ties between Booth and the University of Chicago. When Rajan was hired, University President Robert Zimmer told him that one of the he especially liked the fact that Rajan had put together a number of joint degrees for Stanford GSB including programs with computer science, electrical engineering, and foreign policy. At Chicago, there was the opportunity to connect with the university undergraduate population, particularly around economics, the top undergraduate major.

Even so, for a new dean from the outside it could have been a particularly controversial move. Rajan concedes it took “a lot of negotiation” to get the university to go along. “This wasn’t without controversy,” notes Rajan. “There are faculty in the humanities who feel we may be doing too much pre-professional education. But more and more students want that. They want to do things that are applied and drive them into careers they want to do. Within the economics track, which was a very theoretical major, if we can carve out the 70% to 80% who want something more applied, it can potentially be a big play for us and the university as a whole.”

Though the change was approved in May and not yet advertised, the fall classes already were  sold out. Booth will do 20 sections of undergraduate teaching this year, and that will grow over time.

‘A NO-BRAINER’ TO CONNECT WITH CHICAGO’S ECONOMICS DEPARTMENT

“One of the reasons that is important is if you look at the last 15 years the reputation of Chicago undergrad has grown phenomenally,” says Rajan. “They are now in the top two or three universities and they have amazing admission rates. The fact that Booth had no connection with the university was just a missed opportunity. This was an incredible asset base. These were students our faculty would enjoy teaching. The students I knew would want to learn from our faculty. But Booth was pretty isolated from the university campus for a very long time.”

When Rajan began his academic career at Wharton, he especially enjoyed teaching undergraduate business students. “I still think they were among the smartest kids I ever taught in my life,” he says. “Here you have some of the best and brightest undergraduates, many of whom want to do economics. How can you as a business school not want to play a role in that? It just seemed like a no-brainer to try to push that. So this fall, we started a new business economics track in the econ major.”

The full major includes nine classes, with a minimum of four and  maximum of six from Booth, all taught by the school’s tenured faculty. “So the new business econ major is taught half by us and half by the economics department,” adds Rajan. “It fulfills one goal because it connects us better to the department which is an amazing department and we are doing it together. It is jointly governed with three faculty from the department and three from Booth.

‘OUR ALUMNI SAY THEY ARE GOING TO COME AND HIRE EVERYONE OF THESE KIDS’

“A student coming into the university would do the Chicago core, the liberal arts curriculum, then they would take classes in the department, things like macro and micro economics and empirical methods, and then they would take classes at Booth in things like accounting, marketing, and finance. These will be students with incredible market value when they finish. When I speak to our alumni in private equity and other fields, they say they are going to come and hire everyone of these kids.

“There will be a lot of finance courses because there is a huge appetite among the undergrads to get into finance which I feel is great for us. The proportion of our MBA grads going into financial services is declining because more and more finance firms like to hire from undergrad. But this connects us back to those companies. So to me it is just a perfect hedge because we’ll get alumni now from the college who are going to work for the banks and private equity firms. If they choose to come back to Booth for an MBA, it doesn’t really matter to me because they are our alumni anyway. Those students are fantastic. They love finance and our faculty love teaching them. It’s also a great recruiting advantage for faculty.”

One of the things he immediately inherited at Booth was an existing capital campaign to raise $850 million, a goal that has since been revised to $950 million. Rajan expects to surpass the goal this month, seven months before the June, 2019, end of the fundraising initiative. “When I came in it was the final two years to go which is not the ideal time for a new dean to come in,” he says. “I spent 50% to 60% of my time this past year visIting alumni, doing the meet- the-dean tour but also doing a lot of fundraising. That part has gone very well. Since I arrived, we have raised more than $200 million. It’s one of those things you don’t know until you do it, but I have loved it. And it was good because having that done makes it that much easier to do the other things as opposed to figuring out priorities and then getting the funding for it. We have a good endowment but it is not great by any stretch of the imagination so doing more in terms of traveling and connecting to alumni was immediately important.”

‘THE SCHOOL DIDN’T THINK ALUMNI HAPPINESS WAS A GREAT METRIC. IT WAS NOT THE CHICAGO WAY’

The contact he has had with alumni in roughly 180 separate meetings have demonstrated to him the loyalty of the Booth network. “These are people who graduated 30 years ago and at that point I don’t think the school thought of alumni happiness as a great metric,” he says. “It was not the Chicago way. But what is great is that they value what the school has done for them. They knew what they knew coming in and what they knew coming out and they know how that has helped them throughout their careers. So that connection comes from a place of gratitude toward the school and what it gave them to become successful.”

His transition to Booth, Rajan thinks, may have been so smooth because of the similar faculty cultures between Stanford GSB and Chicago Booth. “If you look at it on the faculty dimension, the schools are pretty similar,” he says. “In fact, there are three schools that are very similar on faculty: Chicago, Stanford, and MIT. If you look at what the faculty wants to do and to which they aspire, those three schools are very similar and that has been a huge benefit to me coming from Stanford to here.”

What’s different, he believes, is the student culture and the size and scope of the business school’s offerings. “Stanford was like one MBA program and that was all we did. All your hopes and fears are attached to the MBA program, for better or worse. It’s just a very different feeling here. The students, I think, come in and they buy into what the school does. they are prepared to work hard. This is an old school in many ways and what the school really does a good job of is orienting the students who come in to understand what the school does.

THE GSB CURRICULUM CREATES ‘MORE TENSION BETWEEN STUDENTS & THE ADMINISTRATION’

“For Stanford, the small size helps in forming a really good community among the students. But the curriculum there creates more tension between the students and the administration and the students and what the faculty wants to do. There is just less of that here. The faculty tend to teach things that they do research on, and the students buy into that in terms of what they want to study so it is a much more aligned place than Stanford.”

Obviously, location is a big part of the change. “Silicon Valley plays a big role at Stanford,” acknowledges Rajan. “The students, particularly the international students, have never seen anything like it. They come there and they want o be a part of that. Even if entrepreneurship wasn’t really what they wanted to do, the environment sort of moves people in that direction a lot more than even the school ever wanted it to. So the school pushes back against it quite a bit. So there is the push trying to keep students away from Silicon Valley as much as possible and getting them to focus on their studies. That’s much less of a distraction here.”

One significant difference between Booth and the GSB is the greater flexibility built into the core MBA curriculum at Booth. “At Stanford,” Rajan notes, “the goal was to sell it as being flexible but it was a lot of work because it wasn’t. A lot of the tweaks I had to do was trying to make it feel like students had good options. At the end of the day, I always felt they were disappointed because it wasn’t as flexible as they had hoped.