Mike Useem knows that nothing brings a case study to life like people who’ve been there – literally. So last fall, when Sherron Watkins, the “Enron whistleblower,” phoned to talk about one of his chief research interests, corporate governance, Useem didn’t hesitate. He invited her to campus – and right into the classroom. The result was an in-depth examination of what went wrong at Enron. For those lucky enough to have enrolled in Useem’s class, it was rare access to the inner workings of a major event in business history.
“Bringing in people from outside adds another dimension. Students learn more,” explains Useem, William and Jaclyn Egan Professor and Professor of Management, whose third book, Upward Bound: Mountaineering as Metaphor for Management, is nearing completion. And learn more they did: In true Wharton style, they asked questions, made comments, and gave arguments. They came away knowing more about the case than many of them ever dreamed possible.
It is this kind of immediacy and excitement, what he calls “the fabulous engagement of the Wharton classroom,” that keeps Useem at Wharton when he could go almost anywhere in academia or the corporate world.
Useem’s energy and commitment to learning, not to mention his research accomplishments, are just one example of why Wharton’s faculty is held in awe around the globe for innovation, productivity, and intellectual capital. Together, these 220 men and women are among the most influential and highly quoted group of people in the world. From CNN to BusinessWeek, from National Public Radio to the New York Times, and on websites and bookshelves everywhere, their voices are shaping our culture. At any given time, the faculty is exploring hundreds of research topics, synthesizing their results into usable information that is changing the way we do business.
Each year, the faculty at Wharton gains an average of 10 to 12 new members. Like Useem, they are drawn to Wharton by the intelligence and spirit of the students, the impressive accomplishments of the faculty, and an administration that supports their research in every way possible. There is, of course, a flip side: each year, eight to ten Wharton faculty members leave Wharton, many drawn to other schools by the promise of endowed chairs, higher salaries, or more research funding. Likewise, the high-paying corporate world can recruit top faculty members quite aggressively.
It’s no secret that Wharton has a significantly smaller endowment than its top competitors, which has led to fewer endowed chairs. (Currently, Wharton is ranked eighth in endowment dollars per faculty member.) Yet most Wharton professors don’t measure the school’s assets in dollars.
Franklin Allen, Nippon Life Professor of Finance and Professor of Economics, has had offers to go elsewhere. “I’m staying here,” he says emphatically. “It’s such an interesting mix of the applied and the theoretical. A significant portion of the faculty have spent most of their careers here.”
“I am thrilled to be here,” says Jeremy Siegel, Russell E. Palmer Professor of Finance, BusinessWeek’s Best Business School Professor for 1994 and well-known author of Stocks for the Long Run and Revolution on Wall Street. “I’ve had offers to go to Wall Street, but I could never give up teaching. I just can’t imagine being in a better place.”
For Tom Donaldson, Mark O. Winkleman Professor and Professor of Legal Studies, and one of the foremost researchers on business ethics, being here has something to do with Wharton’s place in the world. “Wharton has always set the pace for other business schools,” he explains. “It’s the school that is always mentioned at faculty meetings. When other schools are tinkering with their curricula, they ask, ‘What are they doing at Wharton?’ We set the standard. To me, it’s the obvious place to want to be.”
A Meeting of Minds
What exactly keeps highly sought-after faculty members here, year after year? Many agree that foremost is the dynamic interaction with their colleagues. Collaboration with other professors, inside the department and out, often results in some of their best research.
Whenever the Wharton faculty hold a “brown-bag lunch,” Jeremy Siegel will most likely be in attendance. At these casual gatherings, faculty take time out to talk about their most recent work, bounce ideas off their colleagues, and share stories of the classroom. With so many great minds in a relaxed atmosphere, the result is bound to be interesting.
“If I have an idea I am wrestling with, I bring it up at one of the lunches,” says Siegel, who is widely respected for his research on productivity and long-term portfolios. He will be published in the near future. “The level of resource is so deep here, I rarely need to go anywhere else,” he explains.
“At Wharton, I have more intense, productive interaction with faculty members outside my department than I have ever had anywhere else,” says Donaldson. “For example, I recently heard a paper presented by my colleagues in Operations and Information Management. The paper dealt with trust and how lies can be empirically correlated with a breakdown in a company. Here were colleagues applying statistical skills to an ethical topic and asking, what are the practical implications of lying? It turned out to be fascinating and starkly relevant for today’s climate.”
“Professors here don’t walk in lockstep,” he continues. “They are individuals. Wharton hires the brightest people and gives them the freedom to do what they want to … and what they are best at. Every day, there is some kind of academic or intellectual event where people are presenting information I haven’t seen anywhere else. Wharton is an intellectual smorgasbord so large that it’s impossible to sample everything!”
Just as Wharton professors value their relationships with other faculty, they jump at the chance to teach the best and brightest business students in the world.
“Wharton is a magnet for interesting people,” says Donaldson. “Our students defy the image of a male with a calculator tied to his belt and his eyes straight ahead, fixed on making a billion as quickly as possible. Instead, they are diverse, well-rounded, and ethically interested. They are individuals with an intellectual eagerness and brilliant flashes of insight.”
Wharton has never embraced the model of business education in which an untouchable professor holds court in front of a class of subservient students. Instead, Wharton students and professors collaborate inside the classroom and out, with some incredible results. “My students have drawn my attention to topics I would not otherwise have thought about,” says Mike Useem. “It’s a two-way exchange. While I am teaching, I am also learning.”
A good example, Useem says, is a recent experience in his Leadership Teamwork course.
“There were several veterans of military service in the class,” he remembers. “We got to talking about how leadership works in the military, and we were so interested in the topic that soon afterwards we jumped in the car and headed to West Point for the day. We talked to people there about how they develop leadership.” The impromptu team followed up with similar road trips to the Naval Academy in Annapolis and the Marine Corps. Their findings led to a program in which students experienced leadership training, Marine style.
For Olivia Mitchell, International Foundation of Employment Benefit Plans Professor and Professor of Insurance and Risk Management, interaction with her students may have influenced the development of an entire country. “Manish Sabharwal, WG’96, took my course on pensions,” she recalls. “He took careful and copious notes, then e-mailed them to friends in India who were starting a pension system.”
Sometimes student-faculty collaborations can be quite high profile, says Siegel, “My book, Stocks for the Long Run, could not have been written without my students’ research assistance,” he explains. “They also helped dramatically with the construction of my website. And these are mostly undergraduates! One undergrad, Sean Smith, had an incredible ability to collate and process material. He was invaluable.”
Siegel is also impressed with Wharton students’ capacity for old-fashioned hard work: “At the end of my classes, I send an e-mail to students asking for TA applicants. I get 40 to 50 applicants every time! It’s a lot of work, and the pay is not great, but I still get such a positive response.”
Balancing the Seesaw
Olivia Mitchell is catching a late flight to Brazil. The new Brazilian government has just announced that it will be making a national pension system their top priority. A better project couldn’t be found for Mitchell: her research on retirement, pensions, longevity, and annuities has taken her around the globe. She will be speaking at a convention and meeting with key players in the new system.
“At Wharton, we are all citizens of the world – our research agenda encompasses the world. That is one of the things that has made it such a good fit for me,” she says. Through Wharton, she has traveled to Singapore, Malaysia, and Australia, among other countries. “There is a huge amount of encouragement on the part of the administration and fellow faculty to pursue things to the end. They will help you with whatever you need. They will literally take you wherever you want to go.”
With the ability and the support to follow the call of research opportunities just about anywhere, however, comes the need to balance research with teaching on campus.
“How do I balance research and teaching? I give up sleep!” she jokes. But in reality, it is not an issue, she says, because she loves to teach. “At a top-notch university, people are excited about their research, and they carry over that excitement into the classroom, and vice versa,” she explains. “Most people who enjoy teaching are a little bit of a ham, and that holds true for me. I enjoy getting students to think in new ways about preconceived notions. In a long-term way, I am teaching students who will go on to teach the next generation.”
Siegel agrees: “I love teaching, and I love working on real, bottom-line research issues. I take that research right into my classroom.”
Donaldson describes the balancing act as a seesaw. “I’ve been at schools where faculty only talk about what goes on in the classroom. At other places, the assumption is that if you teach in an engaging manner, you won’t have time for research. Wharton has managed to get the seesaw pretty horizontal. And I’ve never been at a place that gives so many awards for teaching. Here, teachers are respected by their colleagues for teaching well – not just for their research.”
The Role of Wharton Today
Given the volatile nature of financial markets and the ethical considerations brought to light in recent years, Wharton faculty are reminded more than ever of their influence on the future of the business community. It is a responsibility they take very seriously.
“In the end,” says Donaldson, “a lot of the problems in businesses come down to what the people who run them do when no one’s looking. This issue of integrity is shaped by the culture of business, and business schools are partly responsible for that culture.” It may be this sense of responsibility that has led to Donaldson’s research focus: business ethics, values, and leadership. A founding member and past president of the Society for Business Ethics, and a Senior Fellow of the Olsson Center for Ethics at the Darden School, he has authored several books on the subject, including Ethics in International Business and Corporations and Morality.
“People don’t come into business schools as fully settled ethical minds,” he continues. “There’s a lot that changes ethically as a person grows older. Business schools provide the tools to create wealth, so they are also responsible for teaching the duties that go along with being a responsible citizen in a market economy.”
Siegel feels the role of Wharton has become more critical in light of recent ethical and economic challenges. “Here, we look at how everything affects everything else – politically, ethically, financially,” he says. “Nothing is in a container by itself. More than ever, students need an understanding of how it all fits together, and that is what we teach.”
To Mitchell, Wharton’s role is a more practical one, and one that will serve students their entire lives. “We are teaching an understanding of how to learn. This is a lifelong objective – how to be successful at things that are challenging. At Wharton, you learn not only material, but confidence. I always tell students, ‘Pursue subjects that are hard for you. It’s a lot easier to learn in a nurturing environment.’”
Though the faculty may interpret Wharton’s job differently, they are united in their recognition of its importance and their support for its future. This year, for the first time, Wharton raised funds through a special faculty arm of the Wharton campaign. When Dean Patrick Harker approached Bill Hamilton, CHE’61, GCH’64, WG’64, Director of the Fisher Management and Technology program and the Ralph Landau Professor of Management and Technology, about heading up the new campaign, Hamilton agreed immediately.
“Our goal was to make it evident to the world that an overwhelming number of faculty support Wharton and the campaign,” he explains. The effort, which focused on tenured faculty, was a resounding success: 86 percent of faculty contributed. Now, the faculty that has long been Wharton’s biggest strength has gone a step further in its commitment to the future of the school.
A Strong Global Network
In the Wharton puzzle made up of faculty, students, and research, there is a final key piece: alumni. It is the alumni who have provided endowed chairs for Wharton faculty, as well as for the research centers that serve as hubs for interdisciplinary collaboration. In addition, most Wharton faculty members have unique and highly productive relationships with graduates, not just because they once shared classrooms, but because they have taken their relationships far beyond Wharton’s walls. “Our network is a huge part of what Wharton is all about,” explains Franklin Allen, who makes a point of keeping in touch with many of his former students, a practice that benefits everyone involved. “Strengthening that network is critical.”
Allen has welcomed alumni input into his extensive research on corporate finance, asset pricing, and the economics of information. His most recent project is a comparative study of financial crises in various world markets, including Japan, Argentina, and the United States – a project for which Wharton’s global network has proven invaluable.
Mitchell feels her international focus has been enhanced by alumni contact. “We are lucky to have Wharton alumni placed in top companies of the world. I can always reach out and ask them for help, and I find all of them absolutely fascinating. For example, one MBA grad is working at Vanguard. We finished writing a paper on company stock, and we are continuing to do research together. At Vanguard, he has access to a lot of great information, as I do at Wharton. It’s a two-way street.”
A perfect example of alumni support, says Useem, is the leadership training that Wharton runs in Quantico, Virginia. This popular program, involving roughly 90 students per year, is funded by Lehman Brothers, thanks to the organizational work of alumnus Jeff Zorek, WG’84. “Here’s an alum whose support has been absolutely vital,” Useem says. “He’s worked behind the scenes to bring an incredible program to current students.”
“Alumni support allows a school to compete at a different level,” says Allen. “But it’s not just the money, it’s the overall involvement. To get to the next level from here, we need to keep building that involvement. To alumni, I would say, ‘If you haven’t already done so, get in touch with Wharton – and keep in touch!’”