A catalyst for 'reflection and renewal'
The recession is a global challenge, says Dean Dipak C. Jain, but it creates opportunities for stronger leadership, better risk management and refined frameworks
By Matt Golosinski
Millions of people have been affected by the U.S. recession, which has also resulted in a global market downturn.
These facts are top of mind for Kellogg School Dean Dipak C. Jain, whose interactions with students, alumni and recruiters bring him face to face with those at the front lines of the struggling economy.
But Jain also believes that tough times call for tough thinking and a structured plan to move forward. The marketing scholar and innovation expert says that getting through the downturn may even offer some upside to those who persevere and adopt the right perspective. For him, that means learning from the bitter lessons of the marketplace.
"What would compound the difficulties," Jain says, "would be for us to ignore the opportunity to understand how we arrived at this point, and what we might do differently to avoid a similar fate in years to come."
Jain reports that the downturn has had an impact on the school's endowment fund — just as it has at nearly every academic institution. (See related interview with Matt Ter Molen, associate dean for development and corporate relations.) As a result, the school is continuing its disciplined approach to investments in facilities and other resources as it negotiates this period of what Jain calls "cautious growth."
Kellogg World spoke with Dean Jain about the recession and how Kellogg is responding to the crisis.
Kellogg World: The recession is on everyone's mind, and each week it seems we hear about new challenges for the business world. Given this bleak economic news, how is the Kellogg School looking at the current market such that it can best serve its constituents?
Dean Dipak C. Jain: First, because we are a scholarly institution, our faculty and students are using this crisis as an opportunity to learn. In this way, we fulfill our primary mission of knowledge creation and dissemination, and we serve two of our key constituents — students and recruiters. Kellogg professors continue to be thought leaders in many disciplines, including finance, where they are making important contributions to understand the forces propelling the markets. By providing the latest frameworks, Kellogg offers its graduates the tools required for success. Of course, my colleagues and I remain close to recruiters so that we can understand the kind of talent they need to meet today's business challenges. Our curriculum reflects this ongoing research into the skills that leaders need to thrive.
In addition, through the efforts of our Career Management Center we remain committed to serving the needs of our students and alumni (see related story). My colleagues and I are mindful of how these challenging times impact our worldwide alumni community.
KW: What are some of the things people should bear in mind as they make their assessments of the downturn and try to learn from the crisis?
DJ: I believe there are three main parts, which I call reflection, renewal and responsibility. It is very important for practitioners, academics and especially for our students to reflect on what has happened in the financial markets. There should be a clear-eyed assessment of the facts such that there are no misperceptions of how this crisis arose.
Equally important is the need to cultivate renewed thinking to understand today's global markets. This is particularly key in the risk management area, since we now know that too many institutions appeared to have inadequate risk processes in place. The Kellogg School's Zell Center for Risk Research is one resource that we are using to create knowledge around this critical domain. What seems needed now is a deeper understanding of the implications for risk, especially given the increase in sophisticated financial instruments and practices in recent years. The crisis is offering us new insights, and we must take this time to appreciate how circumstances are shifting and what changes may be required to ensure stability and enduring value.
The third piece to keep in mind is responsibility. The gravity of this crisis demands accountability. Each of us must take stock to see how actions — large and small — may have contributed to the crisis. In some instances, financial institutions were remiss and should bear responsibility. Lax regulation and oversight may also have contributed to the problem. In some instances, personal consumer choices played a part. This is a complex situation with more than a single catalyst, and improving our system will require continued study in the months ahead. But it is important that taking responsibility be part of our response.
KW: Can you talk more specifically about the school's efforts on the "reflection" and "renewal" dimensions, since those are most clearly aligned with the Kellogg mission?
DJ: Since the crisis began last year, our finance faculty, along with senior alumni leaders from the banking sector, have held several town hall meetings, seminars and lectures to engage and educate our students and the public about the financial crisis. These have been opportunities to share Kellogg thought leadership and offer real-time analysis as circumstances unfolded. Our professors also have been very active in offering their insights more broadly to the mainstream media. The Zell Center for Risk Research (see related story) has been active too, hosting a risk management summit in November 2008 as well as conferences on private equity/venture capital and microfinance. We expect to remain vigorously engaged with this subject. Of course, our finance curriculum also will reflect the best and most cutting-edge thinking about the subject, as our professors continue their research into the crisis.
KW: What has this crisis suggested about the Kellogg School's overall approach to management education?
DJ: I believe that it underscores our unique value proposition. I think the crisis highlights the need for the sort of robust leadership that Kellogg offers. In particular, the crisis points out the importance of leadership education that is a synthesis of several critical areas — what we term the "Four Pillars." These are intellectual depth, experiential learning, global perspectives, and leadership and social responsibility. By bringing together all these crucial elements, Kellogg is preparing the next generation of leaders to make contributions of lasting success and significance.