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A glimpse into leadership at the Stanford Graduate School of Business.
Women are not uncommon at the Stanford Graduate School of Business. The institute is thus setting a counter-trend to the leadership culture of Silicon Valley, which is focused on men. Stanford is completely different. No trace of ivy - just sun, palm trees, open corridors adapted to the sunny weather, solid walls, stable pillars and round, low archways. Even if it is unofficial, the motto, "The air of freedom blows", inspired by the humanist Ulrich von Hutten, can be felt as a warm summer breeze that pulls through the open structures of the campus. It's around 60 kilometers to San Francisco. Stanford is not only geographically close to Palo Alto, the university is also an integral part of the start-up culture around Silicon Valley.
Many legendary founders have studied here, most of them stay nearby and in contact with the university. For example William Hewlett and David Packard; who are seen as the founding fathers of Silicon Valley and still have their headquarters around the corner. The same applies to Palantir Technologies. Peter Thiel met his co-founder at the university, the company has an office a stone's throw away. Google founders Larry Page and Sergey Brin also met at Stanford - but they dropped out of their PhD because they were already working on Google at the same time. Marissa Mayer, former CEO of Yahoo, was here once too, doing her Masters in Computer Science.
Even the recently spectacularly publicly listed Snapchat with its founders Evan Spiegel and Bobby Murphy began at the elite university - in the Kappa-Sigma student union. The list of prominent graduates (there were a total of 221,826 alumni in 2016; note) is long, even outside the start-up world. From actors to top athletes, artists to politicians: the elite university has several greats up its sleeve, including when it comes to the teaching staff: 19 teachers received Nobel Prizes, four a Pulitzer Prize.
Leland and Jane Stanford founded the university in 1885 in memory of their only son, Leland Stanford Junior, who died at the age of 15. Stanford was Governor of California and Senate, and had made a fortune in the railroad business. Today 16,437 students study here, compared to around 12,200 administrative and 2,180 academic staff. Stanford is one of the most heavily funded private universities - $ 22.4 billion in its foundation. The tuition fees of around US $ 65,000 to US $ 91,000 (depending on the course) per student and year cover less than two thirds, the payments from the foundation's assets cover a further 23 percent of the operating costs. This is relatively little compared to other elite universities: 56 and 36 percent of the costs of the Ivy League universities Princeton and Harvard are covered by foundation assets, respectively. Harvard also comes first when it comes to endowments, with foundation assets of around US $ 36 billion. The remainder of Stanford University's running costs (around $ 5 billion in 2016) have to come from other sources - such as government and non-government subsidies, gifts from alumni, parents and friends, and income from healthcare activities. The percentage paid out of the foundation's assets is to be increased, but the regulation states that the assets do not lose their value over a 20 to 30-year period.
As the newly appointed dean, Maureen McNichols knows these numbers games all too well. And she probably knows all too well the feeling of failing due to stereotypes - which, however, would not dissuade her from her plans, as she says.
Maureen McNichols holds a PhD and Masters in Accounting and Finance. Your papers appear in the leading specialist journals in the relevant areas; McNichols is Professor of Accounting and, more recently, Senior Associate Dean of Academic Relations - a role he has come to the highest level in Stanford. Among other things, she will take care of optimally designing the conditions for research at the GSB. She is also part of the Clayman Institute for Gender Research, which promotes gender equality. Her last paper, published in 2017, entitled “The Information Content of Earnings Announcements: New Insights from Intertemporal and Cross-Sectional Behavior”, found a connection between profit announcements and market behavior of investors.
You have been with Stanford for over 30 years. How did that happen?
When I think about how my career started ... I was one of four women out of a total of 84 faculty members. That was 33 years ago. And there were more every year. The university was very early on here. I believe in equality and that we are all better off with diversity; that we need them if we want to be the best. Over the past few years I've had the opportunity to see what Stanford is up to to attract, hire and support women in their careers.
A lot has certainly happened here ...
Yes. When we were the first women to arrive here, we didn't realize how unusual it was back then. Especially in my area. We just went to work every day. Often I was the only one in a meeting; Nevertheless, there was a good exchange with the women in other areas and the male colleagues also took good care of us. You were more aware, I think, of how unusual this was. Actually my mother was even more extreme. She was a real role model for me. We were six kids and she was a math professor. She has even taught at the University of Illinois. So I didn't see any gender bias in science at the time - it was different when I applied to private accounting firms: I only got one job interview and no offer, even though I was qualified for the job and had good grades. That was a strange experience. That's how I ended up in science. As a scientist, I never felt like I was being treated any differently. I'm not saying that it doesn't exist, but personally I haven't seen it.
How do you stay curious for over 30 years?
My research has developed in different directions. One is to understand how the quality of information about a company's financial condition that investors receive is to be rated. And to analyze the role management plays in this context. Because the incentives to present the company in the best possible light are high. Balance sheets are interesting because, through regulation, they ensure that bad news is also communicated. They force the entire system to communicate truthfully to the outside world. This also shows how honest the management is.
You recently published a study on this ...
Yes. We analyzed data from 1971 to 2011. We found that while market reactions to profit announcements decreased during the financial crisis, investors definitely seem to be paying attention to these events, which in turn has a significant impact on stock prices.
How did you get into finance?
I took an accounting course and saw that you can help managers make better decisions based on data and numbers. That seemed extremely valuable to me. Because, for example, when people make better investments, it not only pays off for themselves, but also for their shareholders, employees and the organization. Simply everyone.
Kirsten Moss is a leadership expert and the only one who has ever managed to lead the same area at two competitors. As of September, she will be the new director of admissions at the Graduate School for Business - she had previously done this for Harvard University - and as such will identify the next generation of leaders and bring them to Stanford.
There are two elite universities on your résumé, your own consulting firm, JP Morgan, and more. How did you do that?
It is always easier to recognize the individual connections afterwards. It took me a long time to understand my own career and my ultimate goal. Throughout my career I have tried to help people develop their leadership skills. I notice that again and again, also when working with the students and alumni. Long after graduation, we often talk again about motivation, importance, happiness at work and inspiration. In the course of a career, you begin to understand very deeply what is important to you, and for me it is.
Why is this so important to you?
I just find it fascinating to observe transformative change - to see the we. Be it here as a supporter for future leaders, observing how people increase their abilities to have influence, or in an academic environment and with the right support, making the right use of their own experiences - you can really become more influential and create a completely new narrative what one is capable of. If every person had this opportunity, imagine what kind of world we would be in! We don't spend enough time looking into what's important to us. I want to impart the knowledge and the right tools to achieve that.
What do you think of the term “broculture”?
Well, I cannot comment on the broculture; but I've been watching closely what trauma is occurring here. It is a baseline that one must treat every person in an organization with respect and encourage them to pursue their best performance in their own best way in a manner that is perceptually beneficial as well as in reality.
What is your model of leadership?
There are numerous studies on all possible leadership styles. I did my research in the private sector, the essence is always these five areas. Be able to understand which direction an organization should go. This is the IQ part. Then you are able to stimulate collaboration in a larger group. If you set really big goals for yourself and try to achieve them, you can get involved with others. The fourth is to have energy and motivation to develop others. The last one is: do you manage to gain trust and respect from others, because who wants to follow you if you are not trusted as a person? To do this, you have to be at peace with yourself and also be vulnerable, open, capable of conflict and strong.
In the future you will - again - be responsible for the approvals. Are you satisfied with the diversity situation?
Diversity in the study rooms is important to have different opinions from around the world. We have over 60 countries represented, so there is a variety, such as how you look at the education system when you're from Vietnam or Brooklyn, and where the difference lies. Just like bringing the differences between the sexes or ethnicities together. Stanford worked hard on that, even the last time I was here. When I was dean at Harvard Business School (for admissions; note), we were in the high 20 percent range, just on the threshold of the 30 percent share of women. Now we're over 40 percent. It's exciting to see the marketing efforts pay off. Diversity in class will remain a strong priority - I believe that will change the world in the long run. That is also one of the principles on which this campus was built. Intuitively, we make the relationships in the classrooms deep and meaningful. This is not a destination, it's a journey for a lifetime. If you leave, the relationships will last and help you. One example is the Women's Circle, where Stanford women meet monthly and exchange ideas about personal and professional challenges.
Perhaps don't you perceive the tuition fees as an excluding barrier?
We often ask ourselves this question. Interested applicants who deal with the topic and who dare to point out and communicate that they would like to, but cannot afford it, we support them as needed. We look at what someone can afford and fill that with scholarships. Many make that dependent on who they consider valuable. So it's great to be up front and be able to say, yes, it's expensive, but you put two years into your skills. (US $ 36,000 is the average scholarship per year per capita; there are also other scholarships; note)
Bernadette Clavier is director of the Center for Social Innovation and was the first to set up an Impact Fund in Stanford. Born in France, she came to Stanford for the first time in 2004 as Director of Marketing and Communication. After her MBA at HEC Paris in Marketing and Strategy, she worked in the private sector. She has been in Stanford for 14 years. She came to the US after working in France at E. Leclerc, the French equivalent of Walmart. The giant corporation has 95,000 employees and a European turnover of around € 68 million in 2016. 1,118 branches worldwide are compared to 8,451 Walmart branches. Incidentally, the largest French retailer is Carrefour with around 14,200 branches; Nevertheless, Clavier also got to know the problems of a global value chain in connection with human rights, social and environmental problems at E. Leclerc. As the director of the Center for Social Innovation, she now deals with things that are probably completely contrary - solutions that create social value. This applies, for example, to the area of education, such as publicly financed elementary and secondary schools or grammar schools - in which parents and teachers have the opportunity to help shape teaching methods. One of the centre's showcase projects also deals, for example, with emissions trading and pollution control or fair trade. The difference to social entrepreneurship is that above all ideas and solutions that create social value are focused - just like the processes through which they come about.
In your opinion, what does an innovation have to achieve in order to be a social innovation?
Often they are very old, even boring solutions that already exist and simply have to be replicated. Technology is an interesting way of making change. The polarization in our world, for example, could be prevented with conversation alone. That, in turn, could be supported by technology. But technology alone won't be what brings us together.
What attracted you to get involved in this area?
When I was in global trade at E. Leclerc, I traveled the world and saw the world from the factory floor. While you're still part of it, you might not see it that way, but I was fortunate enough not to work for a while, so I had the opportunity to reflect. I became aware of the massive impact the global economy is having on the environment and society, and that I had not received any training in this area. That made me want to find new models and share them with the next generation of businesspeople.
In your opinion, are there any gender differences in social innovation?
Yes absolutely. In our field, most organizations - as in entrepreneurship - are male-driven and financed. I've been looking very hard lately at the intentions of our students coming in because I wanted to compare the number to startups. One of our partners, who runs an organization here in Palo Alto and has a scholarship program, went through a blind application process because he wanted to eliminate bias. He is surprised to find that he has admitted many more women at once. In the last senior year, 41 percent were women; of the entire class told us at the beginning of the year 50 that they wanted to be a social entrepreneur. 47 percent of them were women. So I was closer to parity than class composition. I was close to the real gender balance. We have women who want to become social entrepreneurs - they get lost in the pipeline later. It is a worldwide phenomenon. The ideas and the will are evenly distributed in social innovation and social entrepreneurship.
How do you want to get social innovation off the ground?
We work with MBA students willing to use their business skills for the common good, and there are so many ways to do it.Some of our students will become leaders in non-profit organizations, some will become philanthropists, others will become impact investors in impact funds and still others will lead change processes towards social innovation within organizations. There are many ways to make this a reality, and we're not telling them how exactly that should look. We form a network of all these leaders across all areas, who in turn can work together and change things together.
The GSB received 8,116 applications for the MBA program in 2016/2017. 41 percent of them were women, 29 percent belonged to a minority group and 40 percent applied from abroad.
The first women graduated in 1930 - 45 years after the university was founded. There are numerous initiatives for women: for example the GSB Women's Circle - a monthly meeting where Stanford women exchange ideas and support one another, or the Stanford Women on Boards initiative - a collaboration with the Stanford Law School, more women on management boards the company to get; and so-called class captains - since 1976, each class has had a group of women who network with women in other classes.
The Women’s Initiative Network was also founded in 2006 as a hub for the 4,500-strong female alumni community.
Text: Elisabeth Woditschka
This article appeared in our September 2017 issue of “Women”.
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