Darden Commencement Speech: “The hat you wear”

[Context: This is a farewell of sorts, since I’m stepping down as Dean of Darden this summer, and returning to the faculty. I started this speech wearing the traditional mortarboard hat. When I got to the part of talking about the baseball cap, I ad-libbed, saying, “Someone said, you can’t wear that hat at a UVA graduation.” I replied, “Well, yes I can: I’m the Dean.” As the speech progressed, I put on one hat or the other, to underline the properties of each.]

Part of my job this afternoon is to set a tone for the proceedings—and ideally for your lives going forward. They call this a “commencement” after all. It is a beginning of your career after Darden.

In American slang, we talk about wearing hats as a metaphor for shouldering responsibilities or expressing a point of view. We might say, “wearing my hat as a parent,” or “wearing my hat as a soccer coach,” or “wearing my hat as the CFO,” as a lead-in to an opinion or analytic insight. Typically, one uses this metaphor to validate the authority or expertise for the statement to follow. Today is a good day to reflect on the hats or points of view you acquired at Darden.

I processed into this ceremony wearing the traditional mortarboard. This particular hat was given to me by my mother, Marjorie Williamson Bruner. She wore it at her graduation as a newly-minted Ph.D. in comparative literature from the University of Chicago in 1933. And she wore it over several decades of graduations as a professor of English. She was a woman of great depth and considerable gumption: in addition to English, she could read several languages. She could play two musical instruments. She earned a Ph.D. in a day when professional work was not something that women did. She taught thousands of students how to write and speak better. She was married to my father for 51 years; she bore and raised five sons, all of whom went on to do their best work. And she still found time to serve on the local public school board for the better part of two decades. So when I wear this hat, I feel embraced by the spirit of a scholar who was in the world. It is this theme that I wish to underscore in my final send-off for Darden graduates, the theme of the scholar in the world.

This is a hat styled after the headgear of medieval scholars. It is thoroughly impractical and never worn outside of occasions such as this. It is ornate, formal, and traditional. It stands for schooling, visions, concepts, theories, ideas, curiosity, and critical thinking. It links us back to the Renaissance, when the Western world awoke from 1000 years of poverty superstition, anarchy, and barbarism. Wearing this hat is one way of reminding ourselves that, as John Dewey said, the barbarian is just a generation away and that education is the first bulwark against the barbarian. Universities and scholarship played a crucial role in the rebirth of civilization through critical thinking, debate, evidence-based research, and publication of ideas. From that standpoint, putting on this hat periodically is very satisfying.

But I’ll understand if you choose not to wear this hat to work. For there is an alternative that represents some compelling values. The American baseball cap fits better, shades the eyes better, and suits the current sensibility. It is ubiquitous in the United States, and indeed, around the world. It stands for practicality, simplicity, informality, comfort, and above all, action. As Thomas Edison said, “Vision without execution is hallucination.” The baseball cap is about execution.

Most of you probably own a baseball cap. And most of you will probably leave behind your mortarboard as you leave Darden today. Keeping one hat and leaving the other is a troubling metaphor to me. Will you keep the action-taking and leave the discipline of ideas and critical thinking?

Let that not be so. Take both hats with you, at least in spirit: a hat of thinking, and a hat of doing. Never leave either one behind. The managerial world is full of action that is thoughtless: the “Ready, Fire, Aim” kind of action-for-its-own-sake. Remember the mortarboard as a symbol of the need to think before you speak and act.

The mortarboard is a reminder to you that:

  • You will do better asking questions than answering them. Indeed, you can actually manage a company the way my colleagues lead case discussions, by asking questions.
  • You will do better by learning rather than knowing.
  • You will do better making meaning rather than simply taking the meanings provided by others.
  • You will do better by challenging assumptions rather than passively accepting them.
  • You will do better reading intentionally rather than surfing aimlessly.

You cannot be a person of effective action without also being an athlete of the mind. Train yourself relentlessly. UVA’s founder, Thomas Jefferson, was an exemplar of this.

The baseball cap is a reminder to you that:

  • The world needs your recommendations for action-taking.
  • The world needs you to run toward, not away from, society’s problems.
  • The world needs your robust moral voice—robust is the operative word.
  • The world needs you to lead.

You need both hats to survive and prosper in the world you face. Together, these hats make a great partnership. They will shield you from all kinds of business weather and will comfort you in the face of adversities. Hang on to both hats!

Good luck to you this day and forever more!

Thank you.

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Commencement speech, UVA 2015 “Go where you believe you can do your best work”

[Some context: I gave the commencement address at University of Virginia on May 17, 2015. UVA’s commencement stretches over three days, with a Valedictory address (given by comedian Ed Helms), a commencement address for graduates of the College of Arts and Sciences (given by Governor Terry McAuliffe), and a commencement address for all other graduates (given by me).  The video recording of this speech may be viewed at https://www.youtube.com/watch?v=Bd2qWp_B7MA.

I have blogged or spoken before on the general topic of going where you can do your best work (for instance, see this)—that subject is fertile ground for graduating students.  In this talk, I develop further the idea of “best work.”   I drew inspiration for this speech from various sources, which time and space would not allow me to express right in the speech, and therefore offer some annotations in the text that follows.] 

Rector Martin, President Sullivan, Visitors, distinguished guests, members of the faculty and staff, and the Class of 2015: [1]

I am grateful to the Graduation Committee for this opportunity to speak to you. And I understand that I’m the first faculty member to speak at Commencement in many years. It is tough to follow an entertainment celebrity and the Governor of Virginia both of whom have given remarks on this stage in the last 48 hours. I agree with them about the lamentable events visited upon UVA this year. I agree that higher education is critical to the future of this Commonwealth. What more can be said?

I feel like the late Elizabeth Taylor’s eighth husband. I mean, I know what needs to be done. The challenge is to make it interesting. [2]

So I will take up a new theme and invite you to picture this: a young girl falls down a rabbit hole and embarks on a fantastical journey. She doesn’t seem to feel lost, but she is looking for directions. Lewis Carroll’s Alice in Wonderland describes the point at which Alice encounters the Cheshire Cat. Alice says:

“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where–” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
“–so long as I get SOMEWHERE,” Alice added as an explanation.
“Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”

From this exchange comes the adage, “If you don’t know where you are going, any road will take you there.” [3] Today is a good day to reflect on these themes of limitless possibilities, of seeking direction, of taking roads, and trying to get somewhere.

Around this time of year, friends and loved ones ask students, “Where are you going?” “What’s next?” “What do you intend to make of yourself?” You’ve probably received all sorts of advice, much of it unsolicited and pointing in different directions: fame, fortune, fun, and so on. The big question is, where should you go with your life?

My advice is this: You should go where you believe that you can you do your best work. One could deconstruct that sentence in fine detail; but today, focus on just two words, best work. These are radical in orienting you to a high standard. And they imply the existence of a compass — one you can turn to in every wonderland you stumble into. Its “true north” is something called “best work.” Your time at UVA has given you the outlines of the compass and true north. Your challenge in the days to come is to fill in the details.

The word, “best,” directs you to think about what you really value, how you define success. Here’s where the lures of fame, fortune, and fun usually crop up—these are the conventional view of success. But there is a different way to think about your work: what is “best” is necessarily service to a calling. Many of you graduating today have a job lined up; and others don’t. But all of you do have a calling, which is to live a life that is worth living. [4] To “get a life” is not about getting a job; it is about getting a calling. This is hard work: it takes courage, wisdom, strength and grace. Making a living is hard enough. Making a calling is even harder—and more fulfilling. [5] It is gained by going where you can do your best work.

A calling is felt, not seen. One knows a calling imperfectly, as if viewed through a glass darkly. One’s best work is observable. A calling is a sense of intent. Best work is the instrument of that intent. Calling is mission; best work is implementation.

There are many in the world-wide UVA community who garnered all the trappings of conventional success, but did so as a consequence of their service to a calling. Some have jobs at the very top of their field where their service as leaders is prominent. Others served a calling in equally important, but less obvious, ways. Let me cite some examples.

Within the faculty and staff at UVA we have many who inspire us by the way they have lived out their calling: Kenneth Elzinga, Dennis Proffitt, Ed Freeman, Marva Barnett, John Colley, Amanda Mills, Pat Lampkin, and so many others that time would not allow me to tell. These exemplars found their best work to be in one field and at UVA for years.

Other sons and daughters of UVA traced their calling down unexpected paths:

· Will Shortz delights millions of readers each day as the crossword puzzle editor for the New York Times. One might not guess that he graduated from UVA’s School of Law in 1977.

· Carolyn Miles is the CEO of Save the Children. She is taking action to address the endemic deprivation faced by millions of children in poverty. One might not guess that after graduating from Darden, she started out in consumer marketing.

· Toby Cosgrove graduated from UVA’s Medical School in 1966 and was inspired by new concepts of health care delivery. He moved beyond his job as a surgeon to follow a calling into general management. Today he is the CEO of the Cleveland Clinic.

· Michael O’Neill majored in art history and served in the U.S. Marines. Then he followed a calling into the turnarounds of several large banks. He is taking action to save jobs and to restore confidence and stability in one of the largest financial institutions in the world as Chairman of the Board of Citigroup.

Among all such exemplars, I see several attributes:

“Best work” comes from within. If you’re waiting for a mentor or headhunter to tell you what to do, forget it. You must listen for the still, small voice of a calling.

“Best work” is persistent. It does not give up easily. It is a marathon, not a sprint. And when it hits an obstacle, it may drop back to pursue the calling from a different angle. Or it may morph over time. For instance, at some points in life one’s best work is to be a learner and follower. At other points your best work will be as a teacher, leader, or mentor.

“Best work” harnesses serendipity. It may dabble, experiment, and try stuff—all with a purpose. Creative writing and curiosity-driven research are kinds of purposive wandering. Therefore, “best work” may well not occur according to a well-defined plan or within the conventional boundaries of a discipline or career track.

“Best work” sparkles most in the details, such as the ending semiquaver of a soprano; the wrist action of a brain surgeon; the just-right word of the poet; or the moment a business leader takes to encourage an employee. [6]

“Best work” heeds no venue. It gets done both in the big-title corner offices, and at the entry level of an organization or among friends, family, and neighbors. It could entail serving a community, nurturing loved ones, or repairing some nagging interpersonal problem. A calling always begins with the question, “How can I serve others right here and now?”

“Best work” makes meaning. And meaning about what you do—no matter the uncertainties you face–gives courage to take sensible risks. Followers need leaders who give meaning. [7] Meaning creates resilience, with which to withstand setbacks and failures. And finding meaning in life’s big transitions supports one’s sense of growth.

“Best work” leaves the world a better place. It isn’t sufficient just to “do no harm.” Your best work will serve justice, mercy, integrity, joy, and other virtues that constitute a society in which we’d all like to live.

“Best work” is its own reward. It is not triumphal. If you frequently need applause or a gold medal to keep you going, you’re likely not at your calling. If your only goal is a pile of money, you will never achieve it. [8] Financial success is really a reward for other achievements such as invention, efficiency, strategic insight, or delighting someone. Service to a calling is about doing something well. [9] And it summons achievements that transcend any resume, achievements that build character and soul, around which your eulogy will be written. In the final analysis, “best work” may not feel like work at all.

The foundation of your future “best works” was forged here with bonds of friendship, with teaching and scholarship that stretched you, and with the acquisition of leadership skills that can never be written in code but are now in your DNA. Celebrate that. Smile. You came here to learn how to be a leader and you leave here with the obligation to lead in your life.

So the Cheshire Cat got it about right: each and every one of us is bound to wind up somewhere if we walk long enough. But just getting somewhere does not fulfill the faith placed in you by family, friends, this University, and even by the aspirations of our founder, Thomas Jefferson. You should go where you believe that you can do your best work. And the best work serves a calling. Everything else — money, fame, power, leisure — is ancillary; don’t waste your life chasing those. And hopefully thanks to UVA, you don’t have to — because you now have a compass. Follow it. Trust it. And, if like Alice, you stumble into a rabbit’s hole from time to time, there is no need for the Cheshire Cat. The direction is to be found in your calling.

Thank you for the privilege and trust you have given all of us to be your teachers. We now become your students. Teach us about the future, which we now bestow to you with all blessings.

Now, go do your best work.

Thank you.

  1. I am indebted for helpful comments from David Aufhauser, Bobbie Bruner, and Jonathan Bruner. []
  2. I wondered whether students would know who Elizabeth Taylor was (she died in 2011). The ensuing laughter suggests that this was no problem. I suspect that it is an old joke, and heard about it from Peter Gomes, who used it in a sermon in 2000. []
  3. Carroll never actually wrote this, though it is commonly attributed to him. And it has spawned derivatives, from Henry Kissinger (“If you don’t know where you are going, every road will get you nowhere”) to Yogi Berra (“If you don’t know where you are going, you will end up somewhere else”). []
  4. Peter Gomes made this point in a sermon. []
  5. This point is well-argued by Michael Novak in his book, Business as a Calling: Work and the Examined Life. []
  6. And as Mies van der Rohe once said, “God is in the details.” []
  7. This point is well-argued by Rudy Karsan and Kevin Kruse, in their book, We. []
  8. I suspect that this idea has many precedents.  For instance, John D. Rockefeller, the richest man of his day said something similar. []
  9. Writers as different as Benjamin Franklin, Thomas Edison, Martin Luther King, Aristotle, and Confucius have said as much. []
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Choosing an MBA School: the Principle of “Five Friends”

“You are the average of the five people you spend the most time with.” – Jim Rohn

Taken at face value, Rohn’s statement is preposterous. Who you are is a consequence not only of your current personal relationships, but also of chance (for instance, were you born into a wealthy family and/or prosperous country?), inherited capabilities (such as intelligence, athleticism, verbal or artistic skill), and life experience (such as war, illness, discrimination)—as well as people who influenced you in the past but are not with you today (such as grandparents, grade school teachers, youth coaches). Most importantly, are humans chameleons? As some of the great autobiographies (Gandhi, Mandela, Malcolm X) reveal, you can will to be different from those around you. Each of us has at least some say in the matter of who we are.

Yet Rohn’s maxim seems so relevant. It recognizes the great influence of one’s peers. Parents everywhere ask their children, “Who are your friends?” because parents know that friends can steer behavior. “No man is an island,” as John Donne wrote, we are all part of a larger fabric of relationships. Most importantly, if you can choose with whom you hang out, that choice can be a tell-tale of significant preferences and direction.

The idea of the “five friends” resonates with me, because at this time of year, business school applicants from around the world are choosing who will be their friends for the next couple of years. Some admitted applicants reach out to me for advice or with questions. To my regular surprise, few of them consider the impact of the prospective “five friends” with whom they will spend their time in business school. This is a serious oversight. Let me explain why and then offer some questions that the admitted applicant should ask.

You should care about the “friends” with whom you will spend your time in business school for several reasons:

· Learning. In graduate school, you learn more from the friends around you than from the faculty. After all, it is graduate school; it is tougher; the expectations for you to figure things out for yourself are higher. The faculty are there to facilitate, provoke, inspire, and evaluate. But students in graduate school do more of the heavy lifting of learning than in undergraduate school. In any of the professional graduate disciplines such as law, medicine, or business, you are not only learning about tools of the trade; you are also learning how to conduct yourself as a professional: you acquire expectations for high performance; you learn how to communicate effectively; you adopt an action-orientation; and you sharpen your ethical foundation. So much of this important learning is social. At Darden, we explicitly harness that fact in the way we teach and structure our programs: students are assigned to learning teams and sections within which cutting edge business concepts are explored in depth; nearly 45 student clubs yield extensive opportunities to exercise leadership.

· Network. An MBA program affords the opportunity for you to forge deep relationships with classmates, faculty and staff members, and even alumni of the school. This kind of social capital can prove to be crucially important in future years when you need insights, introductions, or advice in dealing with opportunities and challenges. At Darden, the purposely-small scale of our programs promotes deep bonding and learning. Our alumni respond actively to outreach by students. And our faculty often rank #1 because of their willingness to work closely with students. By the time a student graduates, he or she will have made an acquaintance with virtually everyone in the class, and with faculty and staff members.

· Brand. The behavior of your “five friends” in future years will polish or tarnish your own reputation. Though you may have nothing to do with the subsequent behavior of those people, the public perception can be powerful. You must be comfortable with the “five friends” you acquire today and with the prospect of whom they will become in the future. Our admission process at Darden goes beyond mere academic potential to consider indicators of character. We require students to sign on to UVA’s Honor Code as a condition of enrollment.

I want to emphasize that the wrong way to contemplate a choice of school based on the “five friends” principle is to pursue elitism. Nothing about elitism ensures personal growth. The right way to implement “five friends” is by finding a school in which your peers will stretch, challenge, coach, and bolster you. Through your peers, you should grow in confidence and competence.

So, what the “five friends” notion ultimately means is that the admitted applicant should give serious consideration to several questions that bear on learning, network, and brand. Answers to these questions can be gained from attendance at programs for admitted applicants, typically held by each school this spring.

1. Do you want to learn through engagement with other students? Though I have made the argument that you should want to learn from your peers, some people simply prefer the anonymity of the lecture hall or the online course—this carries the lost opportunity of engagement with others. If the answer to this first question is “no,” then stop here; the rest of the questions will be irrelevant to you. Darden’s MBA programs actively harness the collaborative learning among students.

2. How selective is the school? Most of the 15,000 institutions in the world that award degrees in business are “open enrollment” schools: if you can pay, you can be admitted. In 2013, only 55 schools in the world admitted less than a third of their applicants. In recent years, Darden has admitted about a quarter of its applicants.

3. On what attributes does the school select applicants? You should be able to see some dimensions that matter to you, because you will almost certainly be stretched in those ways. At Darden, we look to compose a class of students who bring diversity, intelligence, leadership, integrity, and business potential, among other attributes.

4. Do I get energy from the other admitted applicants? Do I like them? Can I learn from them? Some of the attributes of excellent teachers include positive motivation, an ability to connect at a personal level with the learner, and a perspective that broadens the learner—so it is with the best peers.

The “five friends” principle invites the applicant to consider the influence of future peers in selecting which school to attend. This influence is a vitally important contributor to the success of one’s learning experience in business school.


Dreamers and Leaders: An Appreciation for the Life of Martin Luther King, Jr.

“I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character. I have a dream today!…I still have a dream, a dream deeply rooted in the American dream – one day this nation will rise up and live up to its creed, ‘We hold these truths to be self-evident: that all men are created equal.’ I have a dream…” — Martin Luther King, Jr., August 28, 1963

These words, excerpted from King’s speech on the steps of the Lincoln Memorial in Washington D.C. during the March on Washington, are the heart of one of the greatest speeches of the 20th Century. Ironically, “I have a dream,” was an extemporaneous addition to his prepared remarks. The gospel singer, Mahalia Jackson, stood behind him and as King was approaching the end of his speech said, “Tell them about the dream, Martin.” So he set aside his prepared remarks and concluded his speech with a riff that he had used before in his preaching and speaking. It is the riff, more than the prepared section that propelled his speech to immortality. What is it about dreaming that proved to be so stirring?

Pragmatism is one of the defining attributes of American culture. Phrases like, “So what?” and “Prove it” are hallmarks of life here, especially in business. Ideas, theories, and especially “dreams,” invite attack. Envisioning the future is especially risky. Woody Allen brimmed with irony when he said, “I have seen the future. And it is very much like the present, only longer.”

The night before the speech, one of King’s advisers, Wyatt Walker, told King, “Don’t use the lines about ‘I have a dream…It’s trite, it’s cliché.” King’s speech met with only mild approval in editorials immediately after. Others were less impressed. Anne Moody, an activist from Mississippi, wrote, “I sat on the grass and listened to the speakers, to discover we had ‘dreamers’ instead of leaders leading us. Just about every one of them stood up there dreaming. Martin Luther King went on and on talking about his dream. I sat there thinking that in Canton we never had time to sleep, much less dream.” [1] Malcolm X wrote in his autobiography: “Who ever heard of angry revolutionaries swinging their bare feet together with their oppressor in lily pad pools, with gospels and guitars and ‘I have a dream’ speeches?” Within five years, King’s movement, based on nonviolent resistance to racism, had been marginalized by race riots, black radicals, and a drifting mission: King’s opposition to the Viet Nam War and his advocacy of guaranteed incomes cost him the support of political moderates and conservatives.

Yet over the ensuing years, the “I Have a Dream” speech gained iconic status. Some would attribute this to King’s oratorical skills. King anchors his plea to end racism in quotations from sources guaranteed to move the emotions of a broad spectrum of listeners: the Bible, the Declaration of Independence, Lincoln’s Emancipation Proclamation, and the Constitution. Like an Old Testament prophet, he seems to speak for a people and their destiny. Simple phrasing and the use of repetition ensure the grasp of his essential points. And his baritone voice conveys authority.

But rhetorical devices alone don’t explain the significance of the speech. Its power lies in the word, “dream.” In it, King expressed a vision of a better world, a vision that gained traction and unarguably changed attitudes and government policies. In this, there are lessons for business students and professionals.

  • The first task of a leader is to shape a vision toward which others can strive. Leading is about galvanizing people—but around what? “Where there is no vision, the people perish” says the proverb. [2] If you intend to lead, you must have a dream or vision. Otherwise, “If you don’t know where you’re going, any road will take you there,” as Lewis Carroll wrote. America may have a pragmatic culture, but pragmatism without dreams is rudderless.

  • The dream comes from looking over the horizon. Former business professor Theodore Levitt once said, “The future belongs to people who see possibilities before they become obvious.” Business marketers understand this intuitively. But there is a critical nuance here: visionary leadership is not opportunism. A naïve reading of the biography of Martin Luther King or of other transformational leaders such as Gandhi, Mandela, Walesa, and Gorbachev, might lead one to conclude that “circumstances changed; he saw his chance and took it.” No, we respect these leaders because they changed the circumstances by virtue of a courageous look at the way things might be as opposed to the way they are.

  • Not just any dream: the vision must be compelling enough to withstand challenges, discouragements, and obstacles. King and his compatriots faced laws, jail, police dogs, fire hoses, beatings, and pepper spray—yet they persisted. And the dream must be actionable, such as advocating the repeal of segregation laws and restrictions on voting rights. Dreams without a touch of pragmatism are effete. Ultimately, the dream must entail a call to action: “What are you waiting for? Let’s go!”

  • Business needs dreamers. Think of Steve Jobs, Walt Disney, Edwin Land, Henry Ford, and Thomas Edison and the host of creative people who imagined fantastic alternatives to the way things used to be. Martin Luther King shows us that imagining an alternative to the way things are is foundational to creating a better world. Business is a necessary part of creating that world. Dream about a better world and then shape a vision for others to follow. Do you value a clean environment? Safety and peace? Equal opportunity? Abundant food and shelter? Health and well-being? Employment for the willing? A good standard of living? Freedom? … Dream on and shape a vision for leadership.

This is my last blog post as Dean of Darden in which I celebrate the life of Martin Luther King (for earlier items, see this, this, this, this, this, this, this, and this). Why have I done this? Why bother? First, Martin Luther King Day is a wonderful teachable moment in which to reflect on leadership. I believe that business education should, first and foremost, aim to develop a new generation of leaders (not merely technicians!) to tackle the new problems that come along. King’s life helps us envision the leadership we need. Second, I value norms of tolerance and respect for diversity in society and therefore hope to promote these norms. Needless to say, the growing diversity of American society demands such tolerance and respect in the rising generation of business professionals. Schools that ignore diversity and inclusion do a disservice to their students. The Darden School itself is a work in progress: the high quality of our educational experience depends importantly on our inclusion of diverse students, or, as Darden Professor Martin Davidson says, “embracing the weird.” Finally, I draw strength for my own work as a leader from the example of Martin Luther King. My 33 years as a teacher lead me to conclude that you become the examples that you study. I have a long way to go to become like King, but as he would say, I’m keeping my “eyes on the prize.”

Pause for a moment this Martin Luther King day to reflect on his example and how you might benefit from it.

  1. Both quotations are from http://www.theguardian.com/world/2013/aug/09/martin-luther-king-dream-speech-history []
  2. Proverbs 29:18 []
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Leading in a Moderate Key

“Meg Greenfield, the late Post editorial page editor, counseled against writing in “High C” all the time. By this she meant that an editorialist or columnist who expressed equally noisy levels of indignation about everything would lack credibility when something truly outrageous came along that merited a well-crafted high-pitched scream. We now seem to be living in the Age of High C, a period when every fight is Armageddon, every foe is a monster, and every issue is either the key to national survival or the doorway to ruin.” — E.J. Dionne Jr., “To a Healthier Democracy,” Washington Post, 12/20/14

No doubt about it: society values the transformational leader, the One Who Gets Things Done and pronto. In the popular mind this leader is epitomized by General George Patton, Steve Jobs, Theodore Roosevelt, Margaret Thatcher, people who lived with passionate intensity—they led in “high C.” Is this a good model? I think not and as 2014 draws to a close I want to encourage you to lead with the entire tonal scale, not just high C.

The U.S. and the world have certainly had a lot to fret about in 2014: Ukraine, Ebola, deflation, tragic accidents, alleged police brutality, political polarization, etc. Given the volatile environment, it is understandable that enterprise leaders confront high uncertainty in their spheres. In the face of this volatility, the standard response of leaders is to raise the pitch and noise level of their exhortations; in my salad days I worked for a shouter who eventually burned out. Some enterprises may warrant this. But as a running coach once told me, “it’s a marathon, not a sprint.” Leading at high C is not sustainable indefinitely.

Nor does it promote high performance. Research reveals that transformational leadership is less about high C and more about reticence and determination. For instance, in his book, Good to Great, Jim Collins wrote, “leadership is not just about humility and modesty. It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great….leaders display a workmanlike diligence, more plow horse than show horse.” (p. 30, 39)

Nor does high C promote wise and just decisions. Shortly after the publication of the Rolling Stone article about UVA, I received a volume of email and two direct phone calls from alums: someone (most of UVA’s leaders) must be fired right away to correct things. “Don’t we want to serve justice?” I replied. “Let’s get the facts first. We’ve commenced two formal investigations.” The writers and callers would not be mollified: heads must roll. Later, when Rolling Stone retracted the article because of factual inaccuracies, just one of the high C’ers contacted me, abashed at the new news. All universities need to bring “ferocious resolve” and “workmanlike diligence” to the problem of sexual abuse on campus. But let’s not succumb to “ready, fire, aim.”

Nor does high C necessarily promote trust. To lead with high C and then not have the case for urgency can sever the bonds between leader and followers. Infrequently, some leader will show up on my doorstep with hair on fire: “something must be done about _____ and I’m ready to lead it; will you back me?” On closer examination the facts don’t support the cause—or worse, the facts reveal that the proposed cause is self-serving to the leader. In such instances, one feels betrayed or manipulated or reminded of William Butler Yeats’ poem, The Second Coming, “the worst are full of passionate intensity.” Mind you, the best can be passionately intense too—but the difference is that they have the case for their cause.

Nor does high C promote attention. On an airplane recently, the flight attendant literally shouted the flight safety briefing over the sound system. I had to cover my ears; and I suspect that others did too. Later she explained that she did this to make people listen. I observed that she failed to command our attention, though she did succeed in annoying some of us. In another instance, I co-edited a journal with a professor at another school: every single email he sent to me carried the little “urgent” icon. His high C but mostly unimportant messaging wore out my attention to him.

My wish for readers of this blog in 2015 is a future of tonal modulation. May you as leaders bring low C’s, middle C’s, and (a few) high C’s as needed. The ability to modulate will grant you more attention, better performance, more sustainable effort, more trust, and wiser and more just decision-making.  Easy does it.

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The Reading Leader: Recommended Books, 2014

There once was an enterprise leader who boasted that he read nothing: no books, periodicals, blogs, nothing. He claimed that this kept his mind pure of the conventional thinking that would be inimical to his foresight and originality. He was a boring dinner companion: highly opinionated on a narrow range of subjects and given to superficial exclamations on important issues beyond his field. He displayed no subtlety, critical appraisal, humor, or empathy. He brought nothing in the way of a surprise to colleagues; no ‘Aha!’ about life that made one grateful for the hours one spent with him. Before long, the company was doing poorly; the enterprise leader had lost his job—his foresight had become hindsight and customers found his originality banal. If this were an Aesop’s fable, the moral might be, “One who reads not, will want much.” [1]

Readers of this blog will not be surprised to learn that I believe that the association between reading and effective leadership is strong (see this, this, and this.) Most frequently, I seek the following eight attributes in people who aspire to leadership—reading widely strengthens them all: [2]

Leadership Attribute

How Wide Reading Strengthens the Attribute


Builds awareness of moral dilemmas, past, present and future. Illuminates trustworthy leadership. Trust is the magnet with which leaders attract followers; one builds trust by doing the right things, fulfilling commitments, telling the truth, etc.

Strategic Thinking

Builds anticipation; helps you see around corners. How histories, biographies, and fictional stories turn out become templates or rehearsals for how your story might turn out. Louis Pasteur said, “Fortune favors the prepared mind.” Reading prepares your mind for the unexpected.

Social Awareness

Widens your frame of reference and strengthens your ability to gain the sense of a group of people. It is said that “culture trumps strategy,” meaning that no matter how good is your strategy, if you cannot work through the culture of an organization, you will get nowhere. Edgar Schein famously wrote, “Culture is a pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid, and therefore, to be taught to new members as the correct way to perform, think, and feel in relation to those problems.” Reading helps you to anticipate and understand the shared assumptions in a culture.

Emotional Intelligence

Self-awareness is a high quality of leaders; they understand their weaknesses and their strengths, the impact these have on others, and ways to manage that impact. Reading promotes useful reflection on your own personality and character.

Excellent Communication Skills

Conveying your idea effectively to your followers is perhaps the #1 skill of leaders. The best communicators are voracious readers. Reading builds communication skills because it provides models of excellence. Francis Bacon wrote, “Reading maketh a full man, conference a ready man, and writing an exact man.” Note that Bacon started with reading; it is the foundation for conference (speaking), and writing.

Enterprise Point of View

Reading helps to reveal unexpected linkages among individuals and groups. Being a great CFO depends on understanding the nuances of marketing, production, human resources, supply chain, etc.—the whole firm is greater than the sum of the parts; this is the enterprise point of view. Russell Ackoff wrote, “Managers don’t solve problems, they manage messes.” To lead well and manage messes entails knowing how parts link together and anticipating side-effects of one’s actions. Reading helps you to connect the dots in the world around you.


All of the foregoing should lend a sense of proportion about one’s place in the universe. Biographies of humble leaders such as Gandhi, Mandela, and Grant are useful antidotes to the narcissistic qualities embedded in the media profiles of business and government leaders today.

Bias for Action

Shows the futility of over-analysis of problems. Promotes a sense of what is knowable, and what isn’t. Helps one to reach a definition of effective action—for instance, Ernest Hemingway wrote, “Never confuse movement with action.”

The point of all this is to convince the current or aspiring leader to read more. Here is my approach:

· Make reading a habit, like exercise. Losing the momentum of a story or argument is like losing one’s physical conditioning. Even a little reading every day will set you up for strengthening your attributes of leadership.

· Set aside a time and place to read every day. Most frequent question: “Where do you find the time?” Answer: make time every day; turn off the television; don’t surf the Web endlessly; learn to read on a stationary bike, bus, or subway; always carry things to read on trips. I read for 30-90 minutes each morning before and during breakfast, and before bedtime.

· Carry something to read with you all the time. On my iPad, I have three books going and subscriptions to several periodicals. Airline flight delays? No problem; I just pick up where I left off.

· Get out of your comfort zone. Lots of business professionals focus exclusively on business self-help books and magazines. Big mistake. You’ll boost your resilience, creativity, and repertoire by going farther afield.

· Don’t read junk. So many writers, so little time. Focus on the good stuff. The old socialist slogan, “You are what you eat” is relevant here: you are what you read. Ditch Fifty Shades of Grey and read Anna Karenina or Madame Bovary.

· Talk with others about your reading. As Darden’s MBA students readily discover, you really don’t know something until you can tell others about it. You might even be so bold as to start a discussion group in which you can actively debate the writer’s point of view. Such a group worked marvelously for Benjamin Franklin.

· Keep up with the news every day. Follow one major daily newspaper and your local newspaper. I recommend New York Times, Wall Street Journal, and Financial Times.

· Follow some periodicals. I read The Economist cover-to-cover usually in one sitting on the day it arrives. And I subscribe to Foreign Affairs, Foreign Policy, Bloomberg Businessweek, Harvard Business Review, Atlantic, Wired, and New Yorker.

· Keep one or more books going all the time. In contrast to newspapers and periodicals, books are immersive: they develop some theme or argument more fully; they show more evidence; they develop insights about character and leadership; and they enable you to think more critically along with the author. I read 30-50 books per year.

Here are some of the best books I’ve read over the past 12 months—this list ignores my recommended bibliography on higher education (see this) much of which I also read in 2014. I’ve arranged these recommendations by theme and have included books that I’m currently in the process of reading (and really like) as well as some books that I look forward to starting in 2015.

Inequality. Robert Frank and Philip Cook, The Winner-Take-All Society describes how certain markets lead to sharply asymmetric benefits for their participants; some competitors gain a lot, and others very little. This argument is intuitively appealing as an explanation for worsening income inequality in the U.S. I’m not sure that winner-take-all is as prevalent as the authors argue; but the book sparked quite a lot of reflection. The authors write, “One of our central claims is that although the competition for top slots in winner-take-all markets does indeed attract our most talented and productive workers, it also generates two forms of waste: first, by attracting too many contestants, and second, by giving rise to unproductive patterns of consumption and investment as contestants vie with one another for top positions.” (p.8)

Financial History. Ron Chernow’s book, The House of Morgan, summarizes in exhaustive length some 150 years of the firm presently known as J.P. Morgan & Company. The book is an iconic case study into how firms and institutions change with their times. And it illustrates how a forceful founder (J.P. Morgan himself) can tend to be supplanted by bureaucracy and systems of management.  Thomas McCraw, The Founders and Finance profiled the first three U.S. Treasury Secretaries (Morris, Hamilton, and Gallatin) and showed how very artful leadership by them probably saved the fledgling nation. Flash Boys, by Michael Lewis, caught the attention of investors and regulators alike in 2014 with its dramatic characterization of flash trading on the U.S. stock markets. It suggests that the U.S. equity markets are rigged, which will surprise, enrage, and/or intrigue the reader. Paul Erdman’s, The Silver Bears, is an amusing and quick-to-read novel set in the 1970s about a group of investors who aim to corner the market in silver. Earlier this month, I led a discussion in New York City of Edwin Lefevre’s, Reminiscences of a Stock Operator, published in 1923 and still a classic in the field of investment management. Waiting to be read are two books in financial history, to be discussed in a special seminar led by Richard A. Mayo and myself. Battle of Bretton Woods, by Benn Steil, illuminates the founding of the post-WWII global financial structure (World Bank, International Monetary Fund, and other systems) meant to forestall a future depression—our ability to understand the Panic of 2008 and the Global Financial Crisis depends in part on an assessment of how well the Bretton Woods system served us, and why. Stress Test, by Tim Geithner, is the memoir of the pre-eminent fire-fighter of the recent financial crisis.

Geopolitics. Henry Kissinger’s, On China, is recommended reading for students in our GEMBA (Global Executive MBA) program. It is a brilliant summary of Chinese history and China’s rising position in the world. Kissinger is a pragmatist, a practitioner of real politik, which may annoy the idealistic reader. But his observations on current tensions and the history of the opening of China with President Nixon in 1971 lend tangible examples of the behavior we observe in business negotiations. Making a big impression on me what Kissinger’s discussion of Sun Tzu’s The Art of War as a foundation for Chinese culture and diplomatic outlook. I highly recommend this book, and recently acquired his latest book, World Order, from which I expect more insights.

Technology and learning. Spending any amount of time in high-tech ecosystems convinces one of the need to keep learning to stay ahead of what technology can and will do to your life. I highly recommend two books that outline the profound impact that automation and artificial intelligence will have on society: Brynjolfsson and McAfee, The Second Machine Age and Ed Hess, Learn or Die. Hess (full disclosure: he is a wise and productive Darden colleague) ably argues that the only response to automation and artificial intelligence is faster and better learning, and that high-performance learning organizations become so through great recruiting, great culture, and great processes. Read his book before your competitor does.

Old Age and Beyond. Sherwin Neuland’s, How We Die: Reflections on Life’s Final Chapter, riveted my attention in the context of the illness and/or passing of some friends. This is required reading for many medical students. But written in plain language, it is accessible to the lay reader. What impressed me most was his description of how aging causes mortality—or in words offered by my colleague, emeritus professor Robert Spekman, “things wear out and the parts go out of warranty.” Living sensibly can decelerate the aging process, but not forestall it. Neuland’s advice on living well resonated with me.

Bible. I’ve read the Bible (Old and New Testaments) clear through three or four times. The Bible has had immense influence on world literature; reading the Bible gives you a frame of reference for so much else that you read.  For similar reasons, I’d eventually like to read the Qur’an of Muhammad and the Analects of Confucius.  Now, I’m reading the Bible again and have finished the second volume of the very best and most highly annotated edition I’ve seen, The English Bible: King James Version, New Testament and The Apocrypha, edited by Gerald Hammond and Austin Busch. The footnotes and chapter commentaries are both brilliantly illuminating and accessible to the lay reader and have helped me to understand the composition and origin of the New Testament. This edition of the Bible came to my attention through a rave review in The New Republic. Similarly, a provocative commentary in the New Yorker brought Mark Larrimore’s, The Book of Job: A Biography, to my doorstep. For me, Job has been one of the most interesting and puzzling books of the Bible. Larrimore gives an outstanding summary of the deep questions posed in the book, and of its critical interpretations over the centuries. Last summer, I took a short course at UVA’s Rare Book School, and was assigned to read Christopher De Hamel’s, The Book: A History of the Bible. De Hamel covers the publication history of the Bible, rather than its theological contents, from papyrus scrolls, to parchment manuscripts, to early printed books, and ultimately to digital representation—this is the Bible as art form. What impressed me about this history was how the Bible changed physically and in contents as time passed.

Presidential Leadership. I have a longstanding interest in the US Presidents and in distilling from their examples some insights about leadership that we might convey to the next generation. James MacGregor Burns’, Leadership, offers a provocative distinction between “transactional” and “transformational” leaders. This is one of the most widely-cited discussions about leadership by contemporary writers. Joseph Nye’s, Presidential Leadership and the Creation of the American Era, says that leaders need “certain soft and hard power skills to be effective…soft power skills are emotional intelligence…vision…and communication…hard power skills are particularly important: organizational capacity and the Machiavellian political skills of bullying, buying, and bargaining in the formation of winning coalitions.” (p. 12) And Stephen Skowronek in two books (The Politics Presidents Make and Presidential Leadership in Political Time Reprise and Reappraisal) argues that the impact a President has made depends in part on his place in the “political cycle,” whether one sets a new political order or simply helps to sustain a political order previously set. For instance, Skowronek argues that Thomas Jefferson set a new political order of party politics, James Monroe articulated it, and John Quincy Adams struggled (and failed) to maintain it in the face of turbulent new forces in American society. So Jackson set a new political order and the cycle repeated itself. Skowronek’s big idea is that to understand the impact of a President’s leadership, we must understand the political context. All of these books have rich insights for enterprise leaders.

Role of Women. It is conventionally thought that universities incubate the big cultural changes to come. If so, then women-in-leadership is the next big step in the liberalization in the role of women in society. A straw in the wind: for the past couple of years, women have led the Darden Students Association and a majority of Darden’s 45 student clubs. In this context, I see women students “leaning in” in just the way that Sheryl Sandberg’s, Lean In: Women, Work, and the Will to Lead, prescribes. Sandberg—the COO of Facebook and one of Time’s 100 most influential people in the world–has written an inspiring, accessible, and entirely practical manifesto for women to rise to positions of enterprise leadership. I highly recommend it to women and for men.

Autobiography. As I argued earlier, autobiography, as a class of literature, can give the rising reader clues as to what and what not to do. This year, I’m leading a special seminar on autobiographies of US Presidents. We began with Thomas Jefferson’s Autobiography, which yields remarkable insights into his entry into public service, his capacity to learn, and his role in drafting the Declaration of Independence. Theodore Roosevelt’s An Autobiography, conveys an intense soul, one who advocated the “strenuous life” and molded the Presidency into the role of an activist. In the next semester, the students in our seminar have selected the autobiographies of Harry Truman, Lyndon Johnson, and Richard Nixon—I’ll have more to say about these in my book round-up a year from now. Also in 2014, I finished two books that are on the short list of very best autobiographies in history, Benjamin Franklin’s Autobiography and St. Augustine’s Confessions—these stand out for their incredible self-revelation, for their witness to transformative experiences, and for the presentation of values that represented a pivot in their times and culture. (Garry Wills’ Augustine’s Confessions is an excellent interpretive companion to the original book.) Finally, I loved Robert Gates’, Duty: Memoirs of a Secretary at War, a memoir of his years as Secretary of Defense under Presidents Bush and Obama. Gates presents a vivid picture of a wartime leader who struggled with the Federal bureaucracy, the White House, and Congress to prosecute the war effort and yet managed to retain the perspective of the troops on the ground.

Remember my fable: “One who reads not will want much.” I hope these recommendations are helpful. Read and enjoy. Better yet, read and grow as a leader.

  1. This fable is based on no person in particular but on a few individual conversations I’ve had with managers over the years. Often such conversations entail the bold assertion that “There’s nothing you academics can’t tell me that I don’t already know and find relevant.” As the saying goes, they are waiting for a fall. []
  2. These eight are a small fraction of a long potential list. My colleague, Jim Clawson, once documented over 300 leadership attributes generated by academic research. []

To Strengthen a Learning Community of Safety and Trust

“She was shaking inside. She didn’t hurt anymore, but what had happened inside her?…So horrible, so horrible…Charlotte felt dirty and sore.” —Tom Wolfe, I Am Charlotte Simmons (pgs. 522-523)

Tom Wolfe’s blistering satire of higher education includes a long episode of seduction that culminates in date rape. The central figure of the story, Charlotte Simmons, is shattered by the experience and only survives the vaulting cynicism of those around her through the kindness of strangers and strengths of which she was unaware. It is the most troubing satire I’ve read.

Wolfe’s novel came back to me as I read the recent article about an alleged gang-rape of a first-year student at a UVA fraternity in 2012. The behavior depicted in that article mirrors so many details in Wolfe’s novel that it constitutes a nightmarish instance of life imitating art.

In some emails, tweets, and phone calls, members of Darden’s worldwide community want to know our stand on the article—in effect, they ask, is UVA like Tom Wolfe’s cynical university?

No! UVA does not tolerate violence, including sexual violence, in any form. Rape is an abominable crime. Darden stands with the University community in our anger at the alleged actions described in the article. I write today to express my outrage, to extend my support to survivors of sexual abuse, and to encourage everyone to reflect on what each can do strengthen safety and trust in our community. As we teach, organizational excellence is defined less by the absence of bad events, and more by what the organizations do about them. Let’s set things right.

The first step is to suspend disbelief. The alleged events in the article exceed one’s grasp. UVA President Terry Sullivan has called for a criminal investigation of the attack, which will establish the facts. No matter how this investigation turns out, sexual abuse is bigger and closer than you may think. Headlines in recent years have arrested our attention with reports of sexual violence by celebrities, athletes, and institutional officials. One survey found that nearly one in five American women had been raped or experienced an attempted rape.

Second, speak up for what you value. Tell your co-workers, stakeholders, and family that sexual violence exists in many parts of the world, including our own. It can derail lives; and it is wrong. If America names the crisis, we are on the road to restoring safety and trust. Judging by public revulsion at the news reports and survey results, American society seems at last to be pivoting away from tolerance for aggressive sexual behavior. The spotlight is now on the University. This community of trust and honor must create something better. And we will.

Third, act on behalf of our values and vision for society. If you see something, say something. Be aware of how situations may veer toward abuse—then, intervene.

I encourage everyone to get educated on the topic. Share information and resources. And learn about the options and the policies. UVA Today is publishing a list of important University of Virginia messages regarding sexual assault, including the statement issued yesterday by President Sullivan. Darden students can gain insights from the Darden Office of Student Affairs and the policy document, Student Sexual Misconduct: What You Need to Know. The “For Students” section of UVA’s Sexual Misconduct Reporting Website includes an expanded list of resources: see the Staying Safe Tip Sheet. Last month, Terry Sullivan announced a campaign to encourage bystander intervention, “Not On Our Grounds.” And to support this effort, students have produced a video, Hoos Got Your Back, that involves students, faculty, staff, Corner merchants and other members of the University community.

The “For Employees” section of  UVA’s Sexual Misconduct Reporting Website includes the reporting policy and FAQs.  And the UVA Alumni Association has set up an online portal for UVA alumni to express their concerns, thoughts and recommendations for the University on the subject of sexual misconduct on Grounds. The Alumni Association will collect all responses and deliver them to the University.

Another practical way you can help is provided by President Sullivan. The newly proposed student sexual misconduct policy is available for review and public comment. Read the Executive Summary, then the full policy and provide candid feedback by December 5.

Lastly, I invite members of the Darden community to share their concerns and suggestions directly with me at brunerr@virginia.edu.

The thoughts and prayers of the Darden Community go out to all survivors of sexual violence—and to their caregivers. We must collectively “take back the night” of sexual misconduct, along with the indifference, cynicism, and despair that nurture it. Our Thanksgiving holiday this week lends an opportunity to reflect on what we can do—both as a community and as individuals—to strengthen UVA as an oasis for learning and a community of safety and trust. Let’s rally behind all of these efforts.


Optimistic Investors

We just concluded the 7th annual University of Virginia Investing Conference (UVIC). For the first time in seven years, I (and many veteran participants) emerged from the conference rather buoyant. Professional investors tend not to be wild-and-crazy personalities: phrases like “prudent fiduciary” and “careful analyst” appear with some regularity at our conference. Therefore, the optimism among keynoters, panelists, and the audience arrested me. Let me tell you why…and what caught my attention.

The Context

We chose the conference theme of “Investing in Innovation” to recognize that the only real economic recovery for America would come from the creation of new value. And ultimately, innovation in products and services is what creates new value. Thus, we asked the range of speakers to brief us on some themes that represent promising investment opportunities.

For the past six years, investors have struggled with the Global Financial Crisis, Great Recession, gridlock in Washington, and sequestration. And just in the past few months, the news has not been the happiest: market volatility, plunging commodity prices, deflation in Europe, geopolitical uncertainties, ISIS, and ebola. Some pundits have been forecasting that this decade would echo the “lost decade” of 2000-2009. I was rather prepared for another dour narrative.

Instead, what we heard was simply tonic.

The Themes

Energy renaissance. Bob Craine, an independent producer, and Barnes Hauptfuhrer, a private equity investor, argued that horizontal drilling techniques are revolutionizing the production of gas and oil in the U.S. Energy independence and the export of hydrocarbons, will strengthen America’s trade balance, increase the Federal budget, and permit America to reduce its dependence on nation-states in the Middle East and elsewhere. Low prices and the location of gas fields near industrial centers will stimulate a manufacturing renaissance in America. The impact of these developments will have a long duration. However, recent declines in the price of oil will have an asymmetric impact on the energy producers and will affect M&A activity in that field. Investors should focus on the most efficient producers, who can make a profit even if oil drops to $70/barrel.

Digital healthcare. The high cost of health care will be ameliorated by digital technology—this isn’t just digitization of medical records. Digitization entails making biology predictable through the collection of data, the subsequent analysis of each patient’s health, and the delivery of therapies to treat the specific needs of patients. Medicine will become “personalized.” The sense of panelists Bob Hugin, Sam Isaly, Bryan Johnson, and Bob Hariri was that Obamacare is here to stay, though we are likely to see significant amendments to the healthcare legislation. Bryan Johnson said that “the returns in programmable biology will be astronomical,” as if the operating system of the medical system were completely rewritten.

Cybersecurity. Kathy Warden asserted that one of the biggest issues in technology is how to defend against cyberattacks. Everyone is at risk for these attacks, launched by both individuals and nation-states. Therefore, investment in “predictive threat detection” will be needed and well-rewarded. CEOs will find the budget to cover such investments because the consequences of failing to defend against such risks are huge.

Abundance. Peter Diamandis, the founder of the X-Prize, told us that the news media overemphasize negative news, when in fact human existence is getting better and better at an exponential rate. He offered a host of metrics in areas such as digitization of information, dematerialization, democratization, and demonetization. “100 years old will become the new 60.” Healthcare and education will experience “massive disruption.” In the process of realizing this new abundance, whole industries will be disrupted: “linear thinking companies will be disrupted by exponential-thinking” innovators. Diamandis plugged his new book, Abundance: The Future Is Better Than You Think, which elaborates on the thesis. A question from the audience prompted Diamandis to say that his two favorite investment areas are human longevity and planetary exploration—he is actively exploring the possibility of mining asteroids.

Information technology. Ned Hooper said that some pundits had decried the decline in R&D by corporations. Yet he showed data that the rate of innovation in information technology had in fact never declined and instead had been growing exponentially. Microprocessors, solid-state storage, cloud computing, mobility and wireless (“everything connected everywhere wirelessly”), cloud software platforms, and data gathering and analytics—all of these areas show breakout rates of growth. A panel including Hooper, Charles Cory, John Siegel, and Michael Sola identified some specific sectors of information technology for special attention: the cloud (such as Amazon Web Services), software as a service (SaaS), and security. In response to a question from the audience, John Siegel said that he expected four firms to emerge as significant players from the current tech environment: Google, Microsoft (yes, a turnaround under the new CEO), Amazon, and IBM. Memorable quotes: “One thing you get in tech is a very short memory” (Ned Hooper); “Find a seam in a large growth market and work it hard” (Hooper), “Strategy is for amateurs; operations is for professionals” (Hooper quoting General George S. Patton), “we’ve seen a dramatic decline in the risk premium for investing in growth” (Hooper), “as costs of computing and storage go to zero, security becomes more important” (Cory), “ CEOs will find funds for security because being vulnerable to hacking is a risk for which CEOs can get fired” (Cory), “Amazon has great staying power; it’s not about generating earnings but about disrupting markets” (Sola), “Amazon is really the most advanced distribution company in the world, an interesting merchant enabled by technology rather than a tech company” (Cory). In response to a question from the audience, the panel asked for a show of hands: “are you more concerned about cybersecurity or privacy?” The audience voted heavily for cybersecurity.

Big pivot. Nancy Lazar urged us to close the book on everything we know. We are paying too much attention to the bad conditions of the past few years. Instead, the fundamentals point to the fact that America is at a turning point toward prosperity, much as it was in the early 1980s. She said, “I am exceptionally bullish on the U.S.” These fundamentals include the plunge in the price of hydrocarbons, the decline in global short-term interest rates, deleveraging of the U.S. economy, growth in U.S. bank loans, growth in U.S. government spending, growth in real private GDP and capital spending, a “smarter” U.S. consumer, a moderate housing recovery, the manufacturing renaissance, and the “huge strengthening” of the dollar. I cannot remember having heard a more buoyant economist.

Argentina. Kyle Bass lent a surprising close to the conference with a presentation on the attractiveness of investing in Argentina’s sovereign debt. He is an event-driven investor who looks for outsized returns based on an assessment of probabilities—in the case of Argentina, these assessments consider the resolution of court cases, the actions of “hold-out” investors, and the outcome of a forthcoming Presidential election there. Bass said that he, too, is “bullish on the U.S.” and believes that we will see a massively strong dollar. He also quoted a statement by Ben Bernanke in a private meeting that “interest rates will not normalize in our lifetime.”

Advice to students.

1. Learn to code—not to be professional software coders, but to be able to talk to those who are. (Cory)

2. Develop an ability to think creatively (differently and faster). (Johnson)

3. Think hard about risk: evaluate it, assess your appetite for it. And be careful of the obvious: to be in a “low risk” job in a firm and industry that are “low risk” may mean that you are ripe for disruption and therefore in an extremely risky place. (Hooper)

My take

Are happy times here again? Maybe. All this talk about disruption means that we may face a rather volatile era: winners winning a lot; losers losing a lot. Some folks are likely to wind up worse off. As automation and artificial intelligence displace workers in the middle of corporate organizations, we’re likely to see some arresting developments—I’ve blogged earlier about this point and referenced a book by Brynjolfson and McAfee who provide a longer discussion. During a break, one participant said that the vaulting tech forecasts seemed a bit arrogant in the face of the possible human cost.

All of the forecasts at this conference suggest to me that America may be where it was in, say the mid-1930s or late 1870s: times of enormous technological, political, and social change. In such times it is better to be relatively young, well-educated, with a strong social network, and relatively risk-tolerant. These are interesting times—which reminds me of the apocryphal Chinese curse, “May you be born in interesting times.”

We’ll convene the University of Virginia Investing Conference again next year. Watch the website of the Richard A. Mayo Center for Asset Management for forthcoming details. And if you find these notes interesting, join us next year!

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The Happy Warrior

”WHO is the happy Warrior? Who is he
What every man in arms should wish to be?“

—Character of the Happy Warrior” by William Wordsworth, 1806

Two days ago, I hosted the Darden Military Association of students at our home for dinner. It’s an annual event that my wife and I hold to thank our veterans for their service and to reflect a bit on what that service teaches us. In some brief remarks, I read from William Wordsworth’s poem.

Wordsworth composed “Character of the Happy Warrior” following the death of Horatio Nelson at the battle of Trafalgar in 1806. Presumably, Wordsworth was describing Nelson’s character. But the attributes are instructive to us all; the character he describes is one that I see in many of Darden’s veteran students. Consider the attributes that Wordsworth cites: a “generous spirit;” an “inward light”; a diligent learner with a “natural instinct to discern;” controls fear; is self-knowledgeable; “owes to virtue every triumph that he knows;” keeps faithful; and “finds comfort in himself and in his cause.” I hear from students, faculty, staff, alumni, and recruiters an appreciation for qualities such as these that they see in our veteran students.

But are our veterans, America’s returning warriors, happy? The transition from military to civilian life is a hard road. This morning, Will Kohlbrenner (D’15) gave a remarkable talk at First Coffee on the plight of many returning veterans. Among other details he cited were that

  • (75%) of veterans are unable to translate skills from the military to civilian life.
  • 30.2% of veterans aged 18 to 24 are unemployed as of 2011 BLS data.
  • 968,000 veterans (age 18 to 64) had been in poverty within the last year in 2010.
  • Over half of all homeless veterans are African-American, despite the fact that only 11% of the total veteran population are African-American.

Will noted that a few companies are working on not just hiring vets, but investing in them and training them, including Amazon, Troops 2 Roughnecks (trains service members to work on oil rigs), GE Junior Officer Leadership Program, and Prudential Financial. John Strangfeld (D’77), Prudential’s Chairman and CEO, has been a leader in the developmentof the business world’s response to the plight of returning veterans. Additionally, two Second Year students, JT Pruitt and Steven Benz, are working with Prudential and John Strangfeld in writing a case detailing this program.

Darden is committed to working with returning veterans, and indeed, with people from many fields who have volunteered to put themselves in a difficult way for the sake of others—these include students from the Peace Corps, Teach for America, law enforcement, NGOs, and public service. They all inspire us with the attributes of the happy warrior.

Character of the Happy Warrior

William Wordsworth (1770–1850)

WHO is the happy Warrior? Who is he

What every man in arms should wish to be?

—It is the generous Spirit, who, when brought

Among the tasks of real life, hath wrought

Upon the plan that pleased his childish thought:

Whose high endeavours are an inward light

That makes the path before him always bright:

Who, with a natural instinct to discern

What knowledge can perform, is diligent to learn,

Abides by this resolve, and stops not there,

But makes his moral being his prime care;

Who, doomed to go in company with Pain,

And Fear, and Bloodshed, miserable train!

Turns his necessity to glorious gain;

In face of these doth exercise a power

Which is our human nature’s highest dower;

Controls them and subdues, transmutes, bereaves

Of their bad influence, and their good receives:

By objects, which might force the soul to abate

Her feeling, rendered more compassionate;

Is placable—because occasions rise

So often that demand such sacrifice;

More skilful in self-knowledge, even more pure,

As tempted more; more able to endure,

As more exposed to suffering and distress;

Thence, also, more alive to tenderness.

—’Tis he whose law is reason; who depends

Upon that law as on the best of friends;

Whence, in a state where men are tempted still

To evil for a guard against worse ill,

And what in quality or act is best

Doth seldom on a right foundation rest,

He labours good on good to fix, and owes

To virtue every triumph that he knows:

—Who, if he rise to station of command,

Rises by open means; and there will stand

On honourable terms, or else retire,

And in himself possess his own desire;

Who comprehends his trust, and to the same

Keeps faithful with a singleness of aim;

And therefore does not stoop, nor lie in wait

For wealth, or honours, or for worldly state,

Whom they must follow; on whose head must fall,

Like showers of manna, if they come at all:

Whose power shed round him in the common strife,

Or mild concerns of ordinary life,

A constant influence, a peculiar grace;

But who, if he be called upon to face

Some awful moment to which Heaven has joined

Great issues, good or bad for humankind,

Is happy as a Lover; and attired

With sudden brightness, like a Man inspired;

And, through the heat of conflict, keeps the law

In calmness made, and sees what he foresaw:

Or if an unexpected call succeed,

Come when it will, is equal to the need:

—He who, though thus endued as with a sense

And faculty for storm and turbulence,

Is yet a Soul whose master-bias leans

To homefelt pleasures and to gentle scenes;

Sweet images! which, whereso’er he be,

Are at his heart; and such fidelity

It is his darling passion to approve;

More brave for this, that he hath much to love:—

’Tis, finally, the Man, who, lifted high,

Conspicuous object in a Nation’s eye,

Or left unthought-of in obscurity,—

Who, with a toward or untoward lot,

Prosperous or adverse, to his wish or not,

Plays, in the many games of life, that one

Where what he most doth value must be won.

Whom neither shape of danger can dismay,

Nor thought of tender happiness betray;

Who, not content that former worth stand fast,

Looks forward, persevering to the last,

From well to better, daily self-surpast:

Who, whether praise of him must walk the earth

Forever, and to noble deeds give birth,

Or he must fall to sleep without his fame,

And leave a dead unprofitable name,

Finds comfort in himself and in his cause;

And, while the mortal mist is gathering, draws

His breath in confidence of Heaven’s applause:

This is the happy Warrior; this is he

Whom every Man in arms should wish to be.

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“The Trouble Is…”: Crisis and Critics in American Higher Education

We’re no good, we’re no good!
We’re no earthly good,
Like the best of us is no damn good!
The trouble is he’s crazy.
The trouble is he drinks.
The trouble is he’s lazy.
The trouble is he stinks.
The trouble is he’s growing.
The trouble is he’s grown.
Krupke, we got troubles of our own!
Gee, Officer Krupke,
We’re down on our knees,
‘Cause no one wants a fellow with a social disease.
— “Gee, Officer Krupke,” West Side Story, Lyrics by Stephen Sondheim, music by Leonard Bernstein.

In my last post, I listed the large range of readings I’ve absorbed on the subject of the crisis in American [1] higher education. And I offered to follow up with a post of commentary on that literature. Here it is.

Opinions about the ills of American higher education are almost as diverse as the causes of juvenile delinquency in 1957, when West Side Story was first produced. The consequences of this diversity are important, as I’ll discuss in this survey. The field of criticism is simply vast; much of it is repetitive. My aim here is to highlight some prominent themes as a foundation for an informed discussion among concerned citizens. It pays to think critically about the mountain of research and opinion: along the way I will comment on the critics and their criticisms. Some overarching conclusions are that:

· There is a crisis in higher education in America. Academicians love to mince words; but whether you call it a crossroads, crunch, climacteric, critical situation, or crisis, virtually no one thinks that the present situation is acceptable or that it is likely to get better. What is at issue are the dimensions of the crisis, their materiality and priority, and who is accountable.

· No stakeholder in higher education escapes unscathed. There is plenty of blame to go around. A sophisticated reading of the field entails knowing who is bringing what interests to the debate. Many stakeholders don’t seem to recognize the plurality of claims and interests; and, many amount to single-issue advocates, which complicates the conversation.

· The criticism of higher ed varies enormously in quality. The best material is very well-researched, objective, exquisitely-written, and guides the intelligent reader to reasonable conclusions. The worst material is superficial, wreathed in betrayal and polemic in nature, like being yelled at for 200 pages. Such critics will tell you your house is on fire, but not where to point the fire hose to good effect. See the just-previous blog post for an annotated list of books and articles on which this commentary draws (references to books are given in numbers, to articles in alphabet.)

At the end of it all, most objective observers would conclude that American higher education faces a “wicked problem”: restoring the effectiveness of American higher education and putting it on a sound and sustainable path entails reaching some alignment on the causes of the crisis, who is accountable, and where are the points of greatest leverage for setting things right. Even the notion of “right” invites a debate about who should decide what is “right” and how? Given what one can read about the problem it is no wonder that boards of trustees, professors, administrators, journalists, public officials, students, parents, and other stakeholders are pulling in different directions.

Overview of the Field

Higher education in America is big business, so to speak. As of 2012, there were 4,706 colleges and universities for whom students were eligible to receive federally-funded financial aid. In 2011, these schools had 21 million students enrolled, or 5.7% of the US population. According to the National Science Foundation, total spending on tertiary education was 3.1% of the U.S. Gross Domestic Product in 2007—though not the largest industry in America, it is very influential on culture, growth, and innovation.

Higher education is highly segmented. Of the 4,706 schools, prominent rankings pay attention to about 10%. For instance, US News & World Report covers only 300 universities and 250 liberal arts colleges. An even smaller percentage of schools are deemed “research-intensive”: only 60 U.S. universities and two Canadian universities belong to the prestigious American Association of Universities, a group of leading research institutions. Smaller numbers of schools are regarded as “selective” in their admissions or have sizeable financial endowments. Other dimensions on which to subdivide the field are public/private, religious/secular, four-year/two-year, etc. This means that the reader should be wary of generalizations across the entire field. One size does not fit all.

For instance, the view of many observers is that the crisis in higher education will not substantially threaten the “elite” schools (top-ranked, best endowed, most selective, etc.) or the community colleges. Rather, it will have its greatest impact in the big middle ranks of the field. [2] I have blogged before on the problem of being “Stuck in the Middle.” But others (see [43]) predict that that regional publics, like James Madison University, are in the best position to grow and adjust to changing demographics and financial constraints.

Dimensions of the Crisis in American Higher Education

The evidence of a crisis is hard to ignore. It seems to be material, pervasive, and increasing. Observers will argue about facts, research methodologies and conclusions. Cast your eyes down the following points and decide for yourself:

· Dropout rates. Barely more than a third of students who start a degree program finish it. Ranking America concluded, “According to the OECD, the United States had a tertiary (college and university) graduation rate of 36.5% in 2007. This rate was low enough for the United States to rank fifteenth out of 30 countries in this category. Iceland ranks first with a tertiary graduation rate of 63.1%.” [3] Even for the field at large, the US lags in the ability of higher education to produce graduates at the Bachelor’s degree level.

· Vaulting cost of attendance and rising student debt. Tuition has been rising at rates well in excess of inflation for 30 years. The price of a four-year college education averages more than $100,000 and is forecasted to exceed $250,000 by 2025. The class of 2013 graduated with an average of $35,200 in debt per student—the face value of all student debt now exceeds $1 trillion. [4]

· Disappointing learning. Recent reports of research of what students actually learn in college show scant gains in writing and analytical skills. Richard Arun and Josipa Roksa [2] found that 45% of college students made no gain in writing, complex reasoning, or critical thinking during their first two years in college; by graduation, that percentage was still high: 36%. They wrote, “American higher education is characterized by limited or no learning for a large proportion of students.”

· Rising vocationalism and low employment. Increasingly, students come to colleges and universities out of a desire to get a job, rather than an education. Yet, in recent years new college graduates have not found the employment they hoped to gain. One assessment claimed that “53% of recent college grads are jobless or underemployed.” [5] High unemployment should always be a concern to civic and corporate leaders—but do current unemployment levels presage a secular worsening of employment among college graduates, or are they an artifact of the Panic of 2008 and the Great Recession?

· Declining public support and bad press. The long term trend of declining government support for higher education in America mirrors worsening public opinion: one survey interviewee said, “Higher education has been knocked off the pedestal of public opinion in recent years because of the perception that colleges are not doing enough to innovate and keep costs low for students.” [6]

· Leadership turmoil. Public friction and instability among top leadership is a classic sign of stress in an enterprise. In 2014, University of Texas—Austin witnessed a fight between the President versus the Chancellor of the UT system, and the Governor of Texas. Prominent universities including Arizona, Illinois, Massachusetts, Oregon, and Wisconsin have seen their leaders retire or resign under pressure from boards of trustees. In 2012, University of Virginia witnessed a similar resignation under pressure—and then a reinstatement. The average tenure of a college or university president fell from 8.5 years in 2006 to 7 years in 2011. [7]

· Worsening finances, bond ratings, and state support. Moody’s [Q] recently issued a report questioning the financial viability of many colleges and universities. Revenue growth for many schools is nil or negative: net tuition is expected to decline at a quarter of all schools; in 2013 net tuition was flat or declining for three quarters of public colleges and three-fifths of private colleges, and most schools feel unprepared for MOOCs and other digital technology.

· Winner-take-all economics. In a previous blog post (“Higher Education When Winners Take All”) I presented a range of data showing a highly asymmetric distribution among schools of a range of outcomes such as research grants, pricing, endowment wealth, and stature. It seems that the rich keep getting richer. Perhaps this means that the sunny results for American higher education accrue from a small number of elite universities and are not characteristic of the entire population—this has led Kevin Carey [F] and others to conclude that “Americans think we have the best colleges. We don’t.”

· Exits and disruptive entrants: Instability or displacement of many competitors is another classic indicator of turmoil. Annually, we see only a small percentage of schools closing their doors or merging with other institutions, typically for reasons of financial failure. Antioch College was one prominent example, closing in 2008 and then reopening in 2011. Incumbents may be experiencing a share-of-market displacement with new entrants in higher ed. The appearance of for-profit schools (e.g., Phoenix, Corinthian, Kaplan) and online competitors (e.g., Coursera, Udemy) challenge conventional models. Amanda Ripley wrote in Time, “Elite universities…are unlikely to go away in the near future, as even Udacity’s co-founder (and Stanford alum) David Stavens concedes. “I think the top 50 schools are probably safe,” he says. There a magic that goes on inside a university campus that, if you can afford to live inside that bubble, is wonderful.”…It seems likely that very selective—and very unselective—colleges will continue to thrive…The colleges in the middle, though—especially the for-profit ones that are expensive but not particularly prestigious—will need to work harder to justify their costs. Ideally, Udacity and other MOOC providers will help strip away all their distractions of higher education—the brand, the price and the facilities—and remind all of us that education is about learning.”([S], p. 41.) Of course, stripping away the distractions may strip away important avenues of student learning and growth, through leadership opportunities, socialization, deep engagement with faculty, and so on.

On their own, the dimensions of the crisis are serious enough. But, these dimensions have spillover effects of possibly greater concern. Given the association between education and social mobility, civic engagement, productivity, income equality, and employment, the stagnation and/or disruption of American higher education could adversely affect the fabric of American society.

The Paradox: Looks Good, Feels Bad

Can all this be true? Yes, though there are conflicting opinions on the severity of the crisis. Chait and First [I] give a rather bullish perspective on the outlook for private colleges. Cole [13] lauds the strengths of America’s research universities. Rosovsky [31] attributes the sense of crisis to exaggerated expectations, nostalgia, and difficult times. On the other hand, Selingo [T] presents some rather downbeat survey results of presidents of colleges and universities, folks who probably have a better inside view than anyone. The paradox is this: higher education in America is criticized on so many dimensions, yet it garners a very high return on investment for students (see my earlier blog post, “The ROI on One’s Own Higher Education”), students who are willing to pay high and rising prices, incredible philanthropic support, the most selective admissions, high levels of satisfaction among many alumni, and the highest rankings in the world. Former President of Harvard, Derek Bok, [7] wrote,

How can writers condemn our colleges so harshly if students, parents, and graduates value them so highly? On this point, the authors are silent. Whether they are simply unaware of student opinion or consider undergraduates incompetent to judge…they fail to explain why those attending college do not complain more loudly. Are the critics right and the students wrong? Or is it the reverse? Or are both right or both wrong? (p.7)

How you look at Bok’s paradox invites a range of remedies. Consider five possibilities:

1. Fraud. Perhaps there is a “vast conspiracy” to dupe constituents on all fronts. Conspiracy theorists might argue that the lovely outcomes would disappear were all parties to fully understand the true state of things. In the belief that sunlight is the best disinfectant, they will lobby for external reports, benchmarking, more rankings, and even government inspection and accreditation. The intensifying focus of government on the for-profit institutions seems justified in terms of billions of dollars in government-subsidized student loans and recent news reports about very low graduation rates and inflated promises. But can a focus on the not-for-profit institutions be far behind? Touted remedies: more regulatory reporting, standards, and jail for fraudsters.

2. Bad thinking. A second possibility is cognitive error on the part of various stakeholders. For instance, perhaps students are irrational in their consumption of educational services. Research has documented a host of behavioral influences on decision-making that cause consumers, investors, managers, and employees to deviate from rational decision-making. By this argument, some will suggest that government should intervene to direct students, faculty, and capital to their proper places. Touted remedies: Behavioral guidance for the decision-making of students and parents; more regulation for institutions.

3. Uncertainty: education is risky; and courses and schools are not easy substitutes for each other. To some extent constituents engage in a discovery process about their preferred habitats in the field: some students ought to study cosmology at a leading research university; other students should study cosmetology at a trade school or community college. If students and schools pair up in the wrong way, one or both will be unhappy. Not all career paths beyond school are equally remunerative. Plus, students will change their minds as they mature and learn. No school guarantees graduation or employment because these depend heavily on student effort and ability and on market conditions. Recent data on trends may be skewed by the Panic of 2008 and Great Recession. Is the recent record on employment temporary or permanent? Touted remedies: more risk-reduction and safety nets for students.

4. Complexity: colleges and universities have grown in size and in mission reach. This makes it hard to understand the institutions or to make wise decisions. Touted remedies: simplification, streamlining, cut non-core activities, fire administrators and faculty, ditch tenure, etc. The more radical critics advocate simply letting the system implode and rebuilding it anew.

5. The “Old Normal.” Since at least the 12th Century, higher education has always been this way, with some variation through time. Periodic upheavals are followed by periods of silent advancement. When hasn’t higher ed been in a crisis of some kind? The “new normal” is really the “old normal.” Remedies: let the schools figure it out; they’ll eventually adapt in appropriate ways.

There is evidence to support all of these explanations for Bok’s paradox. This guarantees a bubbling stew of controversy.

Who is accountable for this crisis?

The sense of many critics is that if we can identify the parties accountable for this crisis, the remedies should become clearer and the miscreants held accountable. The mass of writers (see the suggested readings in the previous blog post) focus especially on eleven targets. In the discussion that follows, I’ll simply cite an author’s last name and a number [X] to point the interested reader to a particular source.

1. It’s the professors’ fault. In 1988, Charles Sykes [34] sparked a firestorm of criticism of the professoriate for inattention to students, laziness, self-serving behavior, infidelity to the missions of their institutions, problems with academic tenure and the caste system of professorial ranks. Sykes marshals an abundance of foibles, facts, and outrages. But he over-reaches with a polemic style and questionable causation. Kingsley Amis [1] lampoons the agonies of a junior faculty member going through the tenure decision—in the end, “Lucky Jim” is fortunate in that he doesn’t get tenure and therefore won’t spend his career in the company of petty and vindictive colleagues. Andrew Hacker and Claudia Dreifus [20] describe a professoriate that is simply sour on the work they do: “Though often exceptionally well paid and able to exercise more control over their lives than the members of practically any other profession, college and university professors often express surprisingly low levels of job satisfaction…Whether we were in Berkeley or Boston, the talk was similar: the students are semi-literate; the school’s president is anti-intellectual; the new parking rules are inequitable; and there’s this boorish colleague who filibusters at meetings. At the end of the day, this strange little world often alienates the genuinely smart and idealistic.” Less polemic and more research-based are Richard Arum and Josipa Roksa [2] who document a decline in student learning and write that, “many students have been left academically adrift on today’s campuses. The typical student meets with faculty outside of the classroom only once per month, with 9 percent of students never meeting with faculty…their inflated ambitions and high aspirations have not institutionally been met by equivalently high academic demands from their professors, nor have many of them found a sense of academic purpose or academic commitment at contemporary colleges.” (pgs. 88-89) Arum and Roksa explain, “when faculty have high expectations and expect students to read and write reasonable amounts, students learn more. In addition, when students report that they have taken a class in which they had to read more than forty pages a week and write more than twenty pages over the course of a semester, they also report spending more time studying; more than two additional hours per week than students who do not have to meet such requirements. Thus, requiring that students attend to their class work has the potential to shape their actions in ways that are conducive to their intellectual development.” (p. 119) Teaching is not the whole focus of most professors. David Damrosch [14] focused his critique on the research mission of the faculty. He argues that professors produce a great deal of work oriented mainly toward a narrow circle of other professors. This specialization is costly, in terms of social isolation, organizational dysfunction, and alienation. It was not always thus in universities. He calls for a return to more collaborative, integrative, and interdisciplinary engagement within the scholarly community. Louis Menand [24] points to the “professionalization” of faculty, who identify more with the research mission of their discipline than with the welfare of their students. Gerald Graff [19] indicts professors for rendering their audiences “clueless” by failing to communicate well to those outside academe. Former Princeton President, Harold T. Shapiro [33], and former Harvard Dean, Harry R. Lewis [23], suggest that faculty and administrators have forgotten or been distracted from their foundational obligations to build the character of their students.

2. It’s the administrators’ fault. Financial problems and mission drift are due to “administrative aggrandizement,” according to Benjamin Ginsberg [17]. This professor at Johns Hopkins points to the rising number of administrators per student, rising costs, proliferation of bureaucracy, decline of faculty governance and autonomy, and spread of left-wing political correctness or right-wing corporatism. He notes that in 1975 there were 250,000 university administrators; by 2005, the number had grown to 750,000, eclipsing the number of tenured and tenure-track faculty. Administrators are the principal stewards of a university’s resources. Therefore the spiraling costs must point to the failure of administrative leadership—thus says Richard Vedder [39], a prominent economic critic. But William J. Baumol [3] presents a counterpoint: maybe universities suffer from a “cost disease” in which expenses perennially rise faster than inflation because of the labor intensity of their activities. Productivity improvements are difficult because schools are like string quartets: after 400 years, it still takes four performers to play a Haydn quartet. Another charge against administrators is that they focus too much on safe and sustaining investments rather than grappling with larger and riskier opportunities. Clayton Christensen coined the phrase “disruptive innovation” in which great firms decline by “aggressively investing in the products and services that the most profitable customers want” ([10] p. xxiv) and thereby fail to invest in the new disruptive products that the next generation of customers want—Christensen suggests that such products tend to be better in some respect (cheaper, simpler, smaller, more convenient) but may not be consistent with the mind-set of prevailing customers. But in industry after industry, disruptive innovations worm their way in, grow, and eventually dominate—higher ed seems ripe for disruption. On the other hand, enthusiastic application of the concept of “disruptive innovation” to a variety of fields has drawn the cogent criticism of Jill Lepore [P]. Nevertheless, transformative impact of digital communication seems likely to collide with the immutability of traditional service delivery in higher education. Clayton Christensen and Henry Eyring [11] argue a larger point, well beyond technological disruption: most colleges and universities are spending their resources inappropriately, trying to emulate Harvard and other elite research universities, in pursuit of rising prestige. They argue that the solution is to shed the superstructure of high-end research and refocus on the core teaching mission of higher education. The larger point is that administrators have succumbed to an “arm’s race” in spending, or like a game of musical chairs to see who can outlast the others, as resources become more constrained.

3. It’s the students’ fault. Tom Wolfe [42] portrays college as four years of entertainment, alcohol, and, well, fornication—students aren’t mature enough to demand anything more like an immersion in ideas, growth in critical thinking, or a transformational learning experience. In the opening pages of Wolfe’s novel, a character calls DuPont University a “MasterCard” implying a device for immediate gratification with deferred payment—this is a theme presaged by David Reisman [30] who decried rising student “consumerism.” What should students demand? Derek Bok [7] surveys the dismal record of student learning over the past few decades. And he offers a profile of a great college education: learning to communicate, learning to think, building character, preparing for citizenship, living with diversity, preparing for a global society, acquiring broader interests, and preparing for a career. Richard Arum and Josipa Roksa [2] write that the amount of time students spend in class and studying has fallen from around 40 hours per week in the 1960s to 27 hours per week recently. (pg. 3) They write, “Many students have come to believe that they ‘should enjoy their college social life since they will obtain a great job and salary after graduation.’ This stems from their expectation that they will be employed soon after graduation and that all they need to secure that employment is a college degree.” (p. 88). Perhaps the rising vocational focus of students today reflects a generational shift in culture—and it is the reaction to their environment. Perhaps this begins during the college admissions sweepstakes: Lloyd Thacker [35] writes of a “student-unfriendly marketplace” characterized by marketeering of education, rankings, “customerization” of students, radical use of financial aid to boost schools’ admissions yields, consultants, test-preps, falsification of applications, and out-of-control parents. William J. Bennett and David Wilezol [4] sustain the view that the value of getting a degree is not what it used to be and that too many people are going to universities when what they should be doing is going to vocational or technical schools.

4. It’s the fault of the alums. Graduates of a school form a powerful constituency of influence and philanthropy. They shape and amplify public opinion when the school is both doing well and when it isn’t. Rarely do they speak with one voice, for instance: young vs. old, domestic vs. international, quants vs. poets, East Coast vs. West Coast—in consequence, they can give conflicting advice to institutional leaders. And some may want to preserve the institution as they knew it at a certain moment and therefore can impede the adaptation of a school to its changing times. Just as often, they want their friends and children to enjoy access to the experience they had. As Henry Rosovsky [31] describes with candor, schools respond to alumni demands for legacy favoritism in admissions in hopes of reaping donations—a similar pressure can come from government officials toward state schools. [8] Legacy policies have drawn powerful criticism in recent years as promoting cronyism, bias, and worsening economic inequality in America. [9]

5. It’s the failure of boards of trustees and their governance. Jeffrey Selingo [32] faults the “mission creep” of many universities: Trustees succumb to the expansive ambitions of administrators and the lure of greater prestige. The failure of governance perhaps presages the replacement of entire institutions, says Harold Shapiro [33]—he asserts that the test should be the ability of an institution to “articulate and meet society’s evolving needs.” Perhaps the model of governance of universities is outdated: John Sexton, President of NYU, said, “There are 85 institutions in the world today that exist as they did 500 years ago. [These are] the English Parliament, the Papacy, eight Swiss cantons—and of the 75 remaining, 70 are universities.” [10] Henry Rosovsky wrote that decision-making is not necessarily improved by making it more democratic: “There are basic differences between the rights of citizenship in a nation and the risks that are attained by joining a voluntary organization…rights and responsibilities in universities should reflect the length of commitment to the institution…in a university, those with knowledge are entitled to a greater say…To function well, a hierarchical system of governance requires explicit mechanism of consultation and accountability.” ([31] p. 265) These are themes that University of Virginia confronted in the events of June, 2012. I have blogged about the importance of consultation and accountability (“To Fight for the Truth,” and “The Importance of Governance and Consultation”). Even Moody’s, the credit rating agency, opined that the UVA episode presages governance pressures in higher education: “For the US higher education sector overall, we expect governance and leadership clashes to increase in coming years as the sector’s ability to grow revenues dwindles, and its emphasis shifts to new operating efficiencies and cost containment. On-line learning technologies will play an increasing role in creating new efficiencies and lowering cost per student.” (Italics added.)

6. It’s the fault of corporations and vocationalism. Andrew Delbanco [15], Mark Edmundson [16] and Martha Nussbaum [27] decry the narrow vocational focus with which many students enter higher education. They argue that vocationalism stifles critical thinking, self-discovery, and curiosity-driven learning—and it prompts an intense focus on getting grades and jobs as opposed to an education. In a classic essay, Alfred North Whitehead [40] warned that an over-emphasis on technical skills crowds out and ability to lead, direct, and think broadly. The private sector has engaged with universities ever more intensively since World War II, to harvest the bonanza of inventions, to hire the talented graduates, to gain advice, and to win popular approval through philanthropy. This has the effect of influencing student career agendas, curricula, research initiatives, university strategies, faculty hiring plans, endowment investments, and the stance of objectivity and independence of the university in society. It is feared that “corporatism” could divert the university away from its core educational mission toward seeking a profit from teaching, research, and other academic pursuits. Introduction of profit-seeking into colleges and universities may create a conflict of interest: make money versus terminate that failing student, the marginal degree program, or that valued student service. As early as 1918, elements of these fears were articulated by the eminent economist, Thorstein Veblen [38]. Derek Bok [9] writes, “If there is an intellectual confusion in the academy that encourages commercialization, it is a confusion over means rather than ends. To keep profit-seeking within reasonable bounds, a university must have a clear sense of the values needed to pursue its goals with a high degree of quality and integrity.” (p.6) One could add that government can have a similar influence on the objectivity and independence of universities through the disposition of largess in support of research, diversity, or various other social ends.

7. It’s the fault of big-time athletics. Division I schools allocate a substantial stream of resources toward athletics, and supposedly away from academics. At these schools, football and basketball coaches can earn in excess of $1 million per year, dwarfing the compensation of virtually everyone else on campus. [11] The investment in plant and equipment is considerable. In return, the schools look to receive broadcast revenues. But as Derek Bok writes [9], “the mounting costs of maintaining a competitive athletic program have made it difficult for universities to achieve real financial success from major sports. Although many Division I schools claim to make money on their football and basketball programs, many do not, especially if the capital costs of their facilities are accurately counted.” (p.38) And again, “There is no reliable evidence that successful athletic teams raise state appropriations or alumni giving to any appreciable extent.” (p. 50) A recent study by Moody’s [R] reported that 90% of athletic programs at universities require subsidies. And periodic athletic scandals remind one of how distorting a powerful athletic program can be. Paul Barrett [B] reported, that at UNC “the university’s own internal reviews and investigations—limited though they’ve been—have shown that since the 1990s, football and basketball players have been steered into fake “paper classes” that didn’t meet. Grades were routinely altered without authorization, and faculty signatures were forged.” Novelist Tom Wolfe [42] argues that university athletes are ‘hired’ for the sports business and are not students in a conventional sense. Leon Botstein [D] calls universities a “farm team for professional sports.”

8. It’s the fault of government. Gene Block [C], Chancellor of UCLA, noted that per-student government funding at UCLA fell 60% between 1992 and 2012. The only alternative to tuition increases would have been cutbacks in classes, which would have adversely affected access and graduation rates. Declining government support for higher education has shifted the burden of education from taxpayers to students. Subsequently, Federal government loans to students vaulted to more than $1 trillion. Recently, some regulators proposed rubrics for rating colleges and universities as a condition for eligibility for student loans—here, the criticisms of Diane Ravitch [29] about standards of evaluation for K-12 schools may become relevant to higher education: such rubrics imperfectly measure learning; and can warp the incentives for teachers and administrators.

9. It’s the fault (or promise) of technologists and/or their technology. The incredible rise of information technology in the past three decades is associated with dramatic strains in American society. Claudia Goldin and Lawrence Katz [18] studied the stagnating growth rate in American productivity and conclude that it is due in part to “skills-based technological change.” The American workforce has not adjusted rapidly enough to changing technology, thus sidelining parts of the workforce in terms of employment, income, and mobility. This is a message amplified by Erik Brynjolfsson and Andrew McAfee [10] and Jaron Lanier [22]: new technology threatens to hollow out the middle class. Have educational institutions kept pace with the vaulting advancements in information technology? Probably not. Techno-optimists have turned to higher education with the enthusiasm they brought to K-12 education. A few years ago, Clayton Christensen [12] turned his attention to disruptive innovation in K-12 education in the U.S. He advocates a turn to “student-centric” educational methods that rely on computer-based learning and the “flipped classroom” in which standardized teaching is abandoned in favor of a more tailored, tutorial approach. But Sherry Turkle [37] raises a concern relevant to higher education: what if something important, such as deep conversation, is lost in the digitization of human interaction? Last winter, the Chronicle of Higher Education reported, “MOOCs made no significant inroads in the past year in the existing credentialing system in higher education, calling into question whether they will be as disruptive to the status quo as some observers first thought Still, academic leaders remain worried that “credentials for MOOC completion will cause confusion about higher education degrees.” [12] Critics also fear the disruption in potential layoffs and school closings as curricula get digitized; even among elite universities there resides a fear that multi-device delivery of instruction will displace the person-to-person learning experience that has been the hallmark of university education for centuries. In previous posts, I have explored the potential and criticisms of digital technology in higher education (“Yes We Have No Nirvanas: The Arms Race in Online Ed,” “New Technology, B-Schools, and Darwin” and “The Frontier of Technology and the Educational Experience”). I prefer to think that technology can augment the learning experience if used wisely, but that it is yet very early in the regime shift that technology will cause and therefore is too early to tell whether our hopes or fears are justified.

10. It’s the fault of foreigners. It is suggested that globalization is altering the ability of higher education to fulfill its mission. The cross-border mobility of students, faculty, and staff has grown markedly over the past decades. Bruner [9] and Wildavsky [41] document rising mobility, globalization of American schools, and emergence of strong foreign schools contenting for top global rankings. And the traffic goes both ways: NYU has opened a campus in Abu Dhabi; Yale has founded a sibling school in Singapore. Globalization requires financial capital, and more importantly, greater attention from faculty and administrators—perhaps globalization is diverting resources from the core. Perhaps it indicates mission creep. In the view of some, this has put pressure on access to American colleges and universities—in a recent article, David Leonhardt [N] suggested that access to American schools has grown harder because “colleges are more globalized.” In my own blog post on the subject (see “The Case for International Students) I look at the facts and conclude that globalization is a net benefit to higher education and American society.

11. It’s the fault of the elites. The leitmotif of the preceding ten points is distrust in leaders. Are the elites really worth it? No doubt about it: for the past 15 years, America has been a simmering stew of populist reaction against executives, elected officials, the cognoscenti, and/or the wealthy. Think of the Tea Party and Occupy Wall Street. Or think of the anger at the response to Hurricane Katrina, Iraq/WMD, the Panic of 2008, or the roll-out of the Affordable Care Act. At record lows recently are confidence in President Obama (24%) and the U.S. Congress (14%). And the pay of academic leaders is a perennial piñata. But the market for talent in academia is pretty competitive; and faculty and staff members tend to sort themselves into different institutions by many attributes including talent, inclination, a sense of “calling,” and work ethic. Pay in academia is highly segmented by areas of expertise, experience, merit, and type of school. It’s not a perfect market, but generally, schools get the talent that they are willing to pay for. And one size does not fit all. If you want a top research university, you’ll have to pay the price. Academia survives on transparency and debate and therefore is an easy target for the populists’ anger. My take on all of this is that academic leaders should do a better job of building trust in themselves and their institutions.

Gee, Officer Krupke

The juvenile delinquents’ song in West Side Story isn’t really a plea for help from Officer Krupke; it’s an ironic satire about their critics. Each critic says what’s wrong, and then places the boys in someone else’s lap. The kids are just getting passed around by advocates of different remedies. Yet the problem continues. Reading the critics of American higher education prompts a similar sentiment.

The crisis in American higher education classifies as a “wicked problem,” which Wikipedia says is, “a problem that is difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognize. The term, “wicked,” is used to denote resistance to resolution, rather than evil. Moreover, because of complex interdependencies, the effort to solve one aspect of a wicked problem may reveal or create other problems.”

The prominent weakness of the critics is their failure to address the “wickedness” of the crisis: the incomplete and contradictory facts, the interdependence of effects and the strong resistance to obvious remedies. As H. L. Mencken wrote, “For every complex problem there is an answer that is clear, simple, and wrong.” To assert that everything will be fine if we just fire some administrators or eliminate tenure or invest in technology or cut research funding is simply boneheaded. We have to tackle the interdependencies within the wicked problem in a coordinated manner. This requires alignment among stakeholders. As in West Side Story, so it is among the critics of higher education: there is little alignment.

Not long ago, a colleague from another department came to see me about all of this. In the course of the conversation, he asked, “How much worse could it get?” The proper answer is, “plenty.” But the path is highly uncertain. An analysis of companies and industries that have endured a regime shift shows wide variance in outcomes—perhaps their examples can offer some insights about the way ahead. On that theme I hope to give some additional comments in the future.

  1. In this discussion, I focus mainly on America for the sake of focus and brevity. []
  2. See “Trouble in the Middle,” Economist, November 2011, http://www.economist.com/node/21532269. []
  3. http://rankingamerica.wordpress.com/?s=college+graduation+rate. []
  4. Data drawn from Matthews, “Tuition is Too Damn High” Washington Post, September 3, 2013. []
  5. The Atlantic, April 23, 2012 http://www.theatlantic.com/business/archive/2012/04/53-of-recent-college-grads-are-jobless-or-underemployed-how/256237/. []
  6. See “Public Opinion of Higher Education Continues Downward Slide” http://chronicle.com/article/Public-Opinion-of-Higher/64217/. []
  7. Association of Governing Boards of Universities and Colleges, 2012. http://agb.org/knowledge-center/faq/what-average-tenure-college-or-university-president. []
  8. For instance, see, “Texas Admissions Brawl,” Wall Street Journal, July 10, 2014. http://online.wsj.com/articles/texas-admissions-brawl-1404947400. []
  9. See, for instance, “Should Colleges Consider Legacies in the Admissions Process?” Wall Street Journal, July 9, 2012. http://online.wsj.com/news/articles/SB10001424052970204653604577249230164868846. []
  10. Joel Trachtenberg, [36] pages 3-4. []
  11. See “Is Your State’s Highest-Paid Employee a Coach? (Probably)” in Wall Street Journal. http://deadspin.com/infographic-is-your-states-highest-paid-employee-a-co-489635228. []
  12. “Doubts About MOOCs Continue to Rise, Survey Finds,” Chronicle of Higher Education, January 24, 2014, pg A17. http://chronicle.com/article/Doubts-About-MOOCs-Continue-to/144007/. []