By Dan LeClair, Chief Operating Officer, AACSB International
The University of California, San Diego, just announced that Evelyn and Ernest Rady and the Rady Foundation committed 100 million USD to continue supporting the Rady School of Management. On such occasions I usually write a short and personal congratulatory note to the dean—in this case, Robert S. Sullivan, founding dean and AACSB’s immediate past chair. But this time I felt compelled to write more, and publicly, because I believe the investment reflects three larger changes happening in our industry: management education and development is become more important to fostering innovation and entrepreneurship; relationships between business schools and their local communities are getting deeper and more symbiotic; and the way we measure business school success is shifting toward impact.
First, more and more business schools have been making innovation and entrepreneurship central to their missions. Both have been the focus at the Rady School since its inception, so it is not a coincidence that Sullivan chaired an AACSB task force that issued a path-breaking report called Business Schools on an Innovation Mission in 2010. The report described a variety of ways business schools foster innovation, including directly supporting startups and bringing together multiple perspectives, encouraging schools to build platforms that stimulate creativity. The Rady School runs a portfolio of startup programs under the umbrella California Institute for Innovation and Development, and literally sits at the crossroads of biological and other sciences on campus.
Second, business schools have been building more symbiotic relationships with their local communities, especially finding ways to capitalize on the strengths of their home city or region. In the past, my conversations on business school campuses often seemed oddly generic, as if the context didn’t matter. On the Rady campus, conversations are about tech—and biotech in particular—reflecting the well-known San Diego life sciences cluster. The increasing interdependence of business schools and their communities may be due partly to changing funding models, as public support shrinks in favor of private support. I am told that the Rady School does not receive any government funding at all; it even had to buy the land for its buildings. Indeed, Sullivan describes Rady as community supported.
Third, the way we measure business school success is changing. Ask most people today how they know a university or business school has been successful, and they will cite a ranking—and there are plenty of them to cite. But to Rady and the community that supports it, the impact or difference the school makes seems to matter more. It is more important to create new solutions to challenging problems—not just business problems but social ones—and to create new businesses and jobs from these solutions. In fact, existing rankings formulas are based on inputs, satisfaction, or more standard career outcomes such as salaries and progression. Instead, the Rady School counts the number of new businesses, jobs, and economic impact created by its students and graduates. In the future more investors will look for similar evidence of business schools' impact.
When the Rady School was founded a little more than a decade ago, people questioned whether a new business school could survive. MBA enrollments were declining and business schools were under attack in the media, from inside and outside the academy. Today, Rady has not only survived, it has thrived, demonstrating that it is not about age, size, or rank; it is about impact. It is about providing a “Return on Life,” to quote Ernest Rady. Congratulations to the whole Rady community for helping to develop new models for business schools.