August 2004

The Man at the Helm

by Barbara Buell

Robert L. Joss has just completed five years as dean, the midpoint of a typical deanship. What is the strategic vision of the School? And what drives Joss's passion for the job?

In 1968, Bob Joss had a choice. Finishing his doctoral studies at the Stanford Graduate School of Business, he had a junior faculty position waiting at the University of Michigan. He also had Business School dean and mentor Ernie Arbuckle supporting his application for a prestigious White House fellowship. Joss took Arbuckle's advice and the fellowship. Three years later, after a stint in the economic policy office at the U.S. Department of the Treasury, he again set aside academic ambitions when Arbuckle, by then chairman of Wells Fargo, talked him into taking a job at the bank. Starting as a staff analyst, Joss spent 22 years there, eventually rising to vice chairman. In 1993, he went deeper into global finance as CEO of Westpac, one of Australia's largest banking groups.

Then five years ago, after his long detour from academia, Joss was selected as the GSB's first dean from industry in 17 years. The search committee saw in Joss a seasoned business leader who also appreciated the intellectual properties of the School. "He's interested in ideas for their own sake," says management professor Chuck Holloway, who chaired the search team. "This is an important opportunity for him to help shape business education, to be seen as someone who made a lasting difference in management through education."

An agile tennis player, Joss loves any kind of competitive sport. On and off the court, he is persistent, according to present and former colleagues. He is an accomplished pianist, but modest about his skill and, except for the occasional GSB party, rarely plays in public. Joss believes in personal integrity as the essential ingredient for any leader. Very importantly, say those who know him, he understands the need for process, especially at Stanford, where the academy, which he greatly respects, has a lot to say about how the institution evolves. "Bob is deliberate and unrelenting," says GSB finance professor and longtime friend George Parker. "He's both a quick study and a careful study of his resources and the environment in which those resources have to function. Then he finds a way and charts a course. He doesn't tell people things they want to hear."

Guiding the School toward a vision for the 21st century has not been easy. When Joss arrived as dean in 1999, the atmosphere was euphoric. The Internet explosion was driving Silicon Valley's biggest economic boom in a generation. Venture capitalists had bottomless pockets. Most students were graduating with two or three job offers each. They also were founding or joining startups in record numbers. The School even sailed past a $75 million fundraising target for its 75th anniversary, netting $150 million.

But in 2000, after Joss was less than a year on the job, the economy suddenly imploded. The dot-com bubble popped. The stock market crashed. Endowments tumbled. Surpluses (including the School's) became deficits. Then, the events of Sept. 11, 2001, wiped away what was left of the optimism that had gone before. Worst of all, executives were doing perp walks on national television. Employees lost retirement savings and railed against out-of-control CEO pay and corrupt executives. There was a tremendous loss of faith in the business community.

That loss of confidence in management is something that troubles Bob Joss deeply. This is because he believes, with a passion, that management is a calling. A noble calling—as essential as medicine, as important as the law. After all, he says, tens of millions of us spend whole lifetimes in managed institutions, whether they are corporations or nonprofits. How well those institutions are managed largely determines what kind of day we've had, what kind of retirement we end up with, what kind of health care benefits we get, what kind of tax base the community has to fund schools and social programs, what kind of environment we live in, and what kind of investment gains shareholders reap from their trust in public companies. As evidenced by the crisis in business over the last several years, there isn't enough good management to go around.

Learning by Doing
Joss, who spent a lifetime in the world of real-time organizations, came to his post as dean armed with a Sloan Program certificate, an MBA, and a PhD, all from Stanford. He is keenly aware of what his education gave him—knowledge and critical thinking skills. He believes in the need to constantly test the knowledge we have to be sure we have it right—an important role that Stanford, as a research institution, plays. But Joss also learned some of his most important lessons through experience.

"The times of greatest personal growth are when you are most challenged," says former Wells Fargo Bank chief executive Paul Hazen, who was Joss's colleague and boss for many years. For example, when Mexico defaulted on its loans in 1982, banks in Texas and New England collapsed under the loan failures and regulators began breathing down the necks of U.S. banks to ensure their capital reserves were adequate. Hazen remembers Joss was part of the team that had to extract Wells, which had about $3 billion in loans across 22 countries, from that mess. "We made a major strategic decision to get out of the international business—which we did by 1984," said Hazen. "We had to restructure those loans and sell."

The leadership challenge was significant: Bank officers had to work not only with zealous regulators, but with other banks whose funds were tied up with the bad loans. That meant Joss, a member of the international management group at the time, had to help negotiate the loan restructuring to the satisfaction of all parties involved. Says Hazen: "There was no template, no background; it was real-time problem solving."

A taste of that sort of learning through working on tough problems with others is what Joss would like to see injected into the MBA Program. After discussion with faculty and alumni, and working closely with senior academic deans David Kreps and Mary Barth, Joss has articulated a strategic direction for the School. The new vision adds a dimension of experiential learning aimed at teaching students how to integrate and put into action the analytical skills and knowledge the School delivers to them. "It's not enough to be smart about the functions, such as accounting or finance or operations," says Joss. "It's learning about how you can be smart about yourself and how you handle your relations with other people so you can accomplish things that are beyond your own individual accomplishments."

Four Cornerstones
Joss believes a complete MBA education rests on four critical components: leadership, entrepreneurship, global awareness, and social accountability. Leadership means developing high ethical standards, strong self-knowledge, teamwork, and the ability to positively motivate people to change an organization for the better. Entrepreneurship means having a sense of ownership and an entrepreneurial mindset with a bias to innovation—whether your company is large or small. Global awareness is managing across cultural, political, geographic, and economic divides, and knowing the world standard for best practice. Social accountability means understanding the responsibility of managing businesses, which are not only economic institutions but also social institutions that profoundly affect their communities. "We are moving in a very positive direction," says Steven Denning, MBA '78, managing partner of General Atlantic Partners and a member of the School's Advisory Council. "He understands the underlying importance of leadership and the other centers the School is developing."

These four areas correspond to four key centers the School has developed or is developing. Each center, modeled after the School's successful Center for Entrepreneurial Studies launched in 1996, creates a critical mass of cases, courses, forums, projects, work experiences, and research, which will help integrate the already strong Stanford tradition of cross-disciplinary teaching. The new Center for Global Business and the Economy, for example, kicked off with a major international conference this year. The three-year-old Center for Social Innovation, which builds on the School's 32-year-old Public Management Program, launched an important new journal, the Stanford Social Innovation Review, in 2003.

The School's initiative in leadership and a new Center for Leadership Development and Research is of keen interest to many alumni. The School has introduced a cocurricular "leadership development platform" through which students experience simulations, teamwork, and personal coaching to evaluate their communication and behavioral style as well as clearly understand their personal values. Sixty students enrolled in the program last year and the School wants to scale it up to accommodate many more. "It has been one of the most exciting and differentiating elements of what Bob and the GSB are doing," says Advisory Council member John Donahoe, MBA '86, who is worldwide managing director at Bain & Co. "It's an unconventional, spot-on view to what's required to lead organizations in today's world."

The small size of the School's student body—less than half that of Harvard Business or Wharton—makes experiential learning that much more effective. Each entering class is composed of 370 students drawn from about 5,000 applications, making Stanford the most selective business school. The personal atmosphere that results is a hallmark of the School, an advantage it is committed to maintaining.

In five years, Joss would like to see all four centers fully supported and throwing off cases, forums, projects, and research in a sufficiently expansive way that "our students not only leave here learning how to think deeply and critically for themselves, as they always have, but also how to think and act with confidence and impact." The School will support the new centers, its traditional programming, and an initiative to bring management education to other graduate students at Stanford with the largest fundraising effort in its history, to get under way later this year.

Skeptics, of course, are not in short supply. There's plenty of controversy in the academic community over whether leadership, in particular, is something that can be taught. Joss has had to juggle the concerns of six constituencies: faculty, staff, students, alumni, the Advisory Council, and the University administration. "It's difficult to span that breadth," says GSB finance professor Jim Van Horne, who was Joss's PhD thesis advisor. "The fundraising is a critical component. The complexity of the job and serving so many constituencies is a real challenge."

Leading from the Middle
But persistence and patience are among Joss's assets. "He's the ultimate leading-from-the-middle leader, which is the only way you can lead in an educational atmosphere with such talented individuals—and is increasingly true of most corporations," says Donahoe. "He has hired very good people; he lets his team take the credit, both faculty and staff."

Pfizer CEO Hank McKinnell, MBA '67, PhD '69, who met Joss on their first day of class in 1965, says he has never known him to give a direct order. "He's not a command and control leader," says McKinnell. "He is more of a facilitator helping others to achieve a vision."

Joss has reassured faculty that he fully supports the disciplines and strong research that made Stanford an intellectual powerhouse in the 1960s and 1970s. "I am sympathetic with the way Bob is turning the tiller," says Parker, who lived next door to Joss during their PhD days. "You don't take a big ship and put it in a right-angle turn. He is looking at areas of emphasis and opportunity," says Parker. "He is not abandoning the gut subjects."

To share ideas, Joss has invested in face-time with faculty, including junior faculty, among whom he is especially popular. A basketball fan whose wife, Betty, sent him to a Michael Jordan camp for over-35 athletes as a birthday gift a couple of years ago, Joss sometimes invites faculty to share his season tickets to Stanford ball games. "Of the deans I've known, he's done an effective job with a faculty that is larger than most other deans have had," says Van Horne, who has worked for six deans. Adds Donahoe: "The faculty I know give Bob high marks for his integrity and honesty. There are no hidden agendas."

Having been mentored by his own dean, the legendary Ernie Arbuckle who put the School on the road to national recognition, Joss genuinely enjoys consulting with students. "I was impressed by the time Bob provided in the mentoring role, and by how approachable and down-to-earth he was," says David Weickhardt, MBA '04, who had Joss for his alumni mentor. "He always made an effort to help. He emphasized the value of getting real-life experience. A piece of his advice that struck a chord for me is that life is more like a long marathon than a brisk race."

Denning sums up the dean's role this way: "You've got to have real conviction and have this in your heart and soul. You can have enormous impact with a relatively small fulcrum," he says. "There are people who love the intellectual challenge of business in its broadest dimension and that's Bob Joss."

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FOUR CORNERSTONES

Leadership
Developing high ethical standards, strong self-knowledge, teamwork, and the ability to positively motivate people to change an organization for the better.

Entrepreneurship
Having a sense of ownership and an entrepreneurial mindset with a bias to innovation, whether your company is large or small.

Global Awareness
Managing across cultural, political, geographic, and economic divides, and knowing the world standard for best practice.

Social Accountability
Understanding the responsibility of managing businesses, which are not only economic institutions but also social institutions that profoundly affect their communities.