Public Management Program

Arjay Miller envisioned a program that would educate government leaders who understood the needs — and techniques — of business, as well as businesspeople who knew something about government.

November 01, 1999

Conceived in the upheaval of the late 1960s to bridge industry and government, the Public Management Program keeps changing. Therein lies its strength.

In 1965, Ralph Nader published Unsafe at Any Speed, his searing critique of the automobile industry and its lack of concern about passenger safety. Shortly thereafter, a handful of auto executives were called down to Washington, D.C., to account for themselves. Among them was Arjay Miller, the smart, tough president of Ford Motor.

Miller had never, by his own account, given much thought to social issues. “I was a businessman,” says Miller. “I was pragmatic.” In Washington, he had an interesting revelation. Like most executives, Miller had long observed that government types seemed to know little about business. But watching his corporate colleagues in the various contentious meetings, he observed that they seemed equally clueless about government. “We blew it,” recalls Miller. “We really didn’t do so well. Businessmen just didn’t understand the political process, or how to deal with the new social demands that were starting to be placed on them.”

Then in 1967, Detroit was torn apart by urban riots. As chair of the city’s economic development committee, Miller was charged with bringing private-sector jobs to the ravaged inner city. It turned out to be an overwhelming, impossible, humbling assignment. Not even seasoned business professionals could figure out how to make it happen. And as far as Miller could tell, nothing was being done to correct this. Certainly not in America’s top universities.

So in 1968, when Stanford offered Miller the deanship of Stanford GSB, he thought about it for a while and said, fine. But he had a condition. Miller would take the job if the school promised to start a program to train managers for the public sector. Business schools, Miller felt, should do more than teach captains of industry how to raise profits. They needed to educate professionals who could move fluidly between industry and government, men and women who could read a balance sheet but who also grasped the problems of the inner city. Miller envisioned a groundbreaking program that would educate government leaders who understood the needs — and techniques — of business, as well as businesspeople who knew something about government. He wanted to build a bridge of trust between the public and private sectors. It was only by integrating the two, Miller felt, that the country’s social problems — from poverty to education to safety and the environment — could begin to be solved.

Stanford GSB faculty liked the idea. The trustees liked the idea. In 1969, Miller became dean, and in 1971, with grants from the Alfred P. Sloan and Ford foundations, the Public Management Program (PMP) was born.

In May 1999, the PMP celebrated its first quarter century. Two hundred fifty participants came to Stanford to share ideas and stories and discuss everything from the role of technology in social change to new developments in education. There were government officials, leaders of scrappy community organizations, environmental activists, and foundation presidents. There were management consultants, investment bankers, full-time mothers, and employees of companies ranging from Monsanto to eBay. There were young people eager to talk about promoting philanthropy on the Internet and others pioneering efforts to help nonprofits become more entrepreneurial.

“The number of PMP alums doing interesting work in all the sectors is an incredible thing,” says Nancy Katz, MBA ’93, former executive director of the nonprofit Students for Responsible Business, which is trying to foster a new generation of progressive business leaders. “It’s an unparalleled network.”

The group reflects the enduring legacy — and success — of Miller’s vision. But the diversity of the group also reflects the way times have changed, and the way the PMP has had to change as well. While its core mission has remained intact, the PMP has been forced to evolve. And after more than 25 years, the PMP itself could be a case study in innovative, self-renewing nonprofit management.

In its early days, the PMP had a simple mandate: Forty spaces were reserved for applicants who wanted to go into public service. It was hoped that they would become “the conscience of the school,” says Miller, helping classmates take a more expansive view of their role as businesspeople. It was assumed that after graduation, most PMP students would take their new analytical and managerial toolkit and go to work for the government. It was a solid model for a program in the early 1970s. The government was still thought of as a place where a bright, ambitious, and socially conscious young person might actually want to work.

Things soon changed. By the late 1970s, government careers were beginning to look less appealing. Jimmy Carter — and later Ronald Reagan — didn’t think government was going to solve society’s problems; government was the problem. “It stopped being cool to go into government,” says Jim Thompson, MBA ’86, director of the PMP from 1987 to 1998.

Not only did government get no respect, but consulting firms and investment banks had begun bidding up the salaries of young MBAs. If you could earn twice as much consulting, why would you ever go work for the government? Fewer and fewer PMPers did. And a question began to haunt the PMP: If graduates of a public management program weren’t becoming public managers, what exactly was the point?

In 1986, James Patell, then associate dean for academic affairs, was charged with answering this question. “The PMP was on life support; everyone thought he was going to kill it,” recalls Thompson.

But everyone was wrong. Patell was impressed by the small, fervent band of students who still thought the PMP was relevant — just dormant. And faculty appreciated the refreshing voices and perspectives it brought into their classrooms. Even if the majority of Stanford MBAs went into the private sector, wasn’t it possible that public service could still play a role in their lives? Did it have to be all or nothing?

Patell thought not. No matter what careers they chose, most MBAs would eventually wind up on school boards and zoning boards, as trustees of universities and hospitals, working with foundations and community groups.

And if they didn’t, shouldn’t they? “It may be the unique opportunity of business schools to give these people exposure and ideas to make them both enthusiastic and effective as private citizens in their communities,” says Patell. “So we broadened the focus of the PMP to include not just government but also nonprofits and the kind of voluntary contributions people make. It allowed us to do things for a much larger body of students.”

At the center of the new PMP, naturally, was coursework — classes like public-sector economics and nonprofit marketing. Students with a strong interest in full-time public service careers could load up on these courses and earn a certificate. Students with other priorities could take just one or two. Then there were periodic workshops (which have since become more regular) on topics like fundraising or how to run a meeting. These were open to everyone and focused on issues that any active citizen might encounter in a well-rounded life.

But there was room for another piece, Patell thought, some overarching project that would get students actively involved and excited. “We weren’t going to be a full-service program, we weren’t going to be the Woodrow Wilson School of Public and International Affairs,” says Patell. “But I felt maybe we could cover just one subject really well every year.”

Why not let the students themselves decide what that would be? In their first year, a PMP class would select the topic that interested them most — the so-called Public Management Initiative, or PMI. It might be the environment. Or education. Or children. Their second year would feature speakers, programs, and retreats centered on the chosen theme.

“The thing just exploded,” says Thompson. “We had people coming in who had no experience with public service. There was a big influx of student excitement and energy, and suddenly there were things going on that I wouldn’t have been able to think of under the best of circumstances.”

“The PMI was huge,” agrees Larry Bram, MBA ’91. “It pervaded student life.”

“Being student run made it exuberant and messy,” recalls Alison Davis, MBA ’89, who was assistant PMP director from 1989 to 1995. “But the results were great. You could have an idea and run with it, explore, experiment.”

Patell’s only rule was that at the end of each year the PMI be abandoned. “Students would want to leave a legacy, something in place for the next class. I’d tell them their legacy had to be a clean beach,” says Patell. “We wanted incoming students to come and find a vibrant initiative being executed, one they could get swept up in. But when it came time to turn things over, they’d have complete freedom to choose, design, and execute something new.”

One notable exception to Patell’s “clean beach” rule was the stupendously popular Class of 1997 PMI on social entrepreneurship. Social entrepreneurship is very broadly defined as everything from nonprofits that sell products or services to for-profit businesses with a strong social mission. Several faculty members loved the subject and built a course around it. Later, Greg Dees, the reigning expert on social entrepreneurship, was recruited from Harvard.

Content originally published in Stanford Business magazine in November 1999. — Jennifer Reese

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