iinnovate 5: Dean Joss & Prof. Saloner


Matt and Julio – Episode 5: Dean Bob Joss and Professor Garth Saloner 


Hi and welcome to iinovate, a podcast about innovation and entrepreneurship with Julio Vasconcellos and Matt Wyndowe.   

Hi and welcome to the fifth episode of iinnovate.  In this episode we are fortunate to feature from the Stanford Graduate School of Business, Dean Joss and Professor Saloner.  A little bit of background on each: Dean Joss was previously vice-chairman of Wells Fargo Bank and then CEO of Westpac Banking Corporation, which is one of Australia’s largest banks.  Professor Saloner has been a professor at MIT Sloan, Harvard Business School and of course Stanford, where he is also the director for the Centre of Entrepreneurship Studies.  You may have noticed that Julio takes the lead on this one, I’m actually in Shang Hai right now, and hopefully will be featuring a couple of interviews from Shang Hai, which are looking to be pretty cool, so hopefully we’ll have those for you in the next couple of weeks.  Just a reminder that you can subscribe to iinovate on itunes: just search for iinnovate, and you can always check out our interviews at iinnovatecast.com.  Hope you enjoy the podcast and once again, thanks for listening. 

Julio: Gentleman, welcome to the podcast. 

Both:  Thank you. 

Julio: Professor Saloner, you’re also the Director of the Centre for Entrepreneurial Studies here at Stanford.  If I’m an aspiring entrepreneur, how should I think about the option of getting an MBA versus going out there and starting a business or working at a startup? 

Professor Saloner:  I think it’s an interesting question.  You know, I think a lot of folks look out at who are some of the most successful entrepreneurs in history.  You look at the Bill Gates, you look at the Larry Ellisons and you know, in Bill Gates’ case, he dropped out of college to pursue Microsoft.  A lot of these folks never went to college.  I think that’s a mistake because of course there’s a survivor bias, in that if we look only at the most successful, we’re not really asking ourselves on average, what would an MBA education have done.  And I think that really, if you go into business for yourself, you’re looking at an enormous amount.  I mean, you move down the line curve pretty quickly, but you really have to learn from your own mistakes.  If you come to business school, you have the advantage in a short period of time, of learning from other peoples’ mistakes, because we as a faculty study this as a set of general principles, so you’re exposed in two years, not just to your own two-year experience, but to a myriad of other peoples’ multi-year experience.  And from that, you get a much broader perspective of, even as an entrepreneur, what kind of ventures make sense and what kind of ventures don’t as opposed as having to work that out for yourself, you know, one attempt at a time. 

Julio:  For an aspiring entrepreneur that’s in business school or heading into business school, what are some of the things that you think are the most valuable pieces of knowledge that you can come away from that business school experience with? 

Professor Saloner:  Well I think, I think there are several, and I think ultimately, what you want as a young entrepreneur is good judgment.  You want to be able to tell good opportunities from bad, you want to be able to tell where to put your investment dollars and where not.  And where does that come from?  Well that comes from developing a set of critical thinking skills of the kind that an MBA program is designed to give you.  So it’s, you know, for me more than the specific content, and I could go through the courses, but for me it’s not about the courses it’s about a mindset, it’s about being able to think critically about a problem in a way that you couldn’t before you came here, and that’s what our conceptual frameworks and our courses are designed to give you.  So that’s one big piece of it.  I think the second piece of it is, is getting to know yourself better.  You’re going to be a leader of a young organization, you’re going to want to grow that organization, you need to know your own strengths and weaknesses, you need to develop your own leadership skills; and that’s something that the school in particular really strives to do in the two years that you’re here.  The final thing I’ll say is, you know, even if you’re an entrepreneur and you’re building a young company, ultimately you’re going to grow that company, that’s your goal, and in growing a company, you need to know, you need to have a view of what a company that is big and successful looks like when it’s doing things well so that you have a goal and a target to guide you; and it is very hard to learn that just by being a serial entrepreneur.  And one of the things you get in business school as an entrepreneur, is a vision of what a successful larger company looks like. 

Dean Joss:  Let me just add a thought to that.  I, you know, experience is a great teacher, but you’ve got to be able to learn from that experience.  If it’s going to be valuable, you’ve got to make sense out of that experience, so what Garth is saying, if you have a framework, if you have a way of thinking, which I think is the most value, you have a way of thinking that enables you to make sense out of your experience so you keep learning and growing, and that, of course, the experience is a great teacher, but only if you learn from it and make sense of it. 

Julio:  So, recently on the news we saw the Nike founder and GSB Alum Phil Knight made a donation of $105 million to GSB, which I think is one of the biggest donations if not the biggest donation to any business school in history.  What role do you feel that the gift is going to play in the future of the GSB? 

Dean Joss:  Well I think the gift really enables us to translate a very exciting academic vision that we have for the future of our school, which Garth Saloner could talk about.  To translate that vision into reality, because without the reality of a new physical infrastructure with all the flexibility, alternative ways of teaching and learning in the classroom, it just wouldn’t be possible.  So, we’re really excited.  The gift together with all the hard work of the faculty and the vision they have for our academic future, makes it come alive. 

Julio:  So Professor Saloner, you just spearheaded one the most drastic curriculum changes, I think, that the GSB or any business school for that matter, has seen in recent history.  Could you give us a little bit of an overview of what those changes are?  What they mean for the GSB? 

Professor Saloner: We are really putting an enormous amount of effort into stepping back and really, with almost a blank sheet of paper, asking ourselves, “What kind of education will our students need to effectively manage in the next century?’”  And we’ve put together what we think is a very exciting and challenging blueprint to do that.   

Dean Joss:  There are several main changes to the curriculum.  First, we have completely changed the first quarter, the full quarter of the first year.  So students will come in and have a very integrated, very managerial first quarter experience so that they really get engaged in curriculum and in the process.  And while they are here doing that in the first quarter, we’re going to use that time to do something which we’ve certainly not done before, and I don’t think any business school has done before, which is to work closely with those students in small group settings to assist very carefully who each one of them is in terms of background and experience.  Each of them will have a faculty advisor during this period who will be working with them in a small seminar, and use that time to figure out what each student’s needs are and how we can appropriately challenge each of them.  And then we’re going to put them into a curriculum for the next six months where we will expose them to a set of managerial cornerstones, but where each of those is going to be offered at a variety of different degrees of challenge, depending on students’ backgrounds.  So we’re going to personalize each student’s experience by putting them in a curriculum that very closely matches their own background and experience.   

Julio:   This next question was actually submitted to us by one of our listeners.  We’ve put a blog post on our blog and asked people for submissions of questions, and it actually is for you, Dean Joss. Someone asked, that you came from running one of the world’s largest banks to leading a non-profit organization, employing a couple hundred people.  Has that required a big change in your leadership style? 

Dean Joss:  Not really a change in the style, I mean, I am who I am and I operate in a leadership role pretty much in a similar way, but I spend my time very differently.  For example, I spend almost 40% of my time trying to finance the enterprise, and as a CEO of a company, you wouldn’t have spent more than 5-10% of your time, particularly a profitable company that has an ongoing source of capital just from retained earnings; so, a big difference in how I spend my time.  Now where do I spend less time, you know, doing strategic business reviews, which is a big part of a private company, particularly a multi-product, multi-business company; we don’t have to do that here.  It’s pretty clear what our strategy is and we’re a school, and we produce ideas, and we produce great graduates.  So you don’t do a lot of strategic re-thinking, you don’t spend as much time on those kind of strategy and operating reviews, and I don’t spend time on government relations, which is something I had to worry about with a big public company that’s very visible. 

Julio:  I would love to hear your thoughts on what you think a leader of a corporation can do to maintain innovative culture. 

Dean Joss:  I think the critical job of somebody who is a CEO or in a leadership role is to try to create that healthy dissatisfaction with a status quo.  You have to change, you have to keep renewing and reinventing any organization to get better and to improve.  And so I think it’s very critical to keep focused on that. 

Professor Saloner:  Well I think one obviously which is up and said but is true is, is to try and develop a culture which is accepting a failure if the failure is for the right reason, which is to say, an appropriate risk was taken, the appropriate effort was put in, but it just turned out to have been a dead end.  That’ll happen.  If you want people to take those risks and you want people to take chances, you need an environment in which that kind of risk-taking is encouraged, and therefore failure is seen as learning and not as failure. 

Dean Joss:  And I think also, if the environment’s changing, then you have to change, your organization has to change, and the most important thing for a leader of the organization is you’ve got to change yourself personally.  You have to be prepared to change if you’re asking for change in others; change in habits, ways of doing things, ways of thinking.  But the most critical thing for a leader of an organization, large or small, is to be thinking about where do we have to go, how do we have to change, how can I instill in others a desire to create that change, ‘cause change has very few friends.  It has a lot of enemies.  There are a lot of things that resist change and yet, an organization needs to continually change and reinvent itself to stay on top. 

Julio:  If you could think of any one person that you could convince to teach here, whether they’re an academic or practitioner, who would that be and why? 

Dean Joss:  Well one candidate I’d put out is Steve Jobs.  I would love to see Steve be part of a tradition that we’ve had here for a long time where people, for example, like Andy Grove, have been in our classroom for the last 14 or 15 years, and I think Steve would be a very interesting candidate to play that role, teaming up with one of our faculty.  So that’s just one example of somebody here in the business community from the practitioner side. 

Julio:  Have you tried approaching that? 

Dean Joss:  Well we’ve talked about it.   

Julio:  Well? 

Professor Saloner:  So, I actually had jotten down a couple names and I wanted to show you that one of them was Steve Jobs.  The same thing, we’ve not spoken about this before: I have tremendous admiration for Steve; this is someone who’s been successful over and over again; you know, twice at Apple, and of course at Pixar in between, and we do have this wonderful tradition where we take tenure-line people and put them together with a practitioner.  I’ve had the great opportunity of working with four different practitioners in the entrepreneurship class and I learn every time, and I would love to have somebody like Steve.  Now, the other person who I jotted down is Jack Welch, but in a very different context.  In that case I’m thinking more in terms of the, the strategic management class, which I teach, and I think that class has been enormously formed by his thinking and experience at General Electric, and boy it would be great to have him standing beside me when I delivered a class like that. 

Julio:  I think we’re all aware there’s an infamous question in the Stanford Application that asks applicants to say what matters most to them and why, and we wanted to ask the two of you what matters most to you and why? 

Dean Joss:  Well at a personal level, what matters most is your family, I mean, that’s really what sustains you.  At a professional level, what matters most to me, and I realize this more and more throughout my life, is the performance of the organizations of which I’m a part.  I really only want to be part of organizations that want to be truly outstanding and want to find a way to be the best at whatever it is they choose to be, and to do.  So, the performance of organizations really aspiring to be great and do great things, that really is what matters to me. 

Professor Saloner:  My answer’s not dissimilar on the personal side, it’s of course family, and I have a wonderful wife and three lovely daughters, and they’re clearly what it’s all about in the end.  On the professional side, while I agree with Bob’s general characterization, my specifics are more precise.  Right now, what’s most important to me is to see the successful implementation of this vision for a new curriculum that we outlined this year because I really think we figured it out, for us at least. It is a very exciting curriculum, we did a very careful diagnosis of the situation, we think we have the answer, and if we implement it well, I think there is no doubt we will have, not just the most exciting, but the best management education available to any young person today. 

Julio:  Thank you very much for being on the podcast, it’s great having you on. 

Professor Saloner: Thank you. 

Dean Joss:  Thanks for having us.   

Thanks for listening.  A transcript of this interview as well as bios and comments are available at iinnovatecast.com.