STANFORD LAY_-OFFS. hmmmm, looks like reality is biting B schools, as well as applicants. Endowment may soon become a key driver of b school quality, and perhaps another factor to be added to the endless HBS versus Stanford debate, altho there are many ways to measure endowment beyond just size, including endowment per student, etc., endow. growth, and prob. an unanswerable metric, endow. pipeline. The fact is, as Booth/Chicago  windfall makes clear, an endowment can gain 20, 30 percent w. one key donation, sorta out of the blue.  Altho the chances of $100M+  gifts are now also becoming less likely.

Stanford culls 49 staff

By Della Bradshaw

Published: February 5 2009 12:31 | Last updated: February 5 2009 12:31

Stanford has become the first of the top US universities to announce lay-offs as part of its bid to rein in expenditure to deal with an expected shortfall in endowment income. This year the school expects a $15m - 10 per cent - shortfall in income.

Perhaps even more significant is that because endowment income is calculated over several years, business schools may be hit more significantly next year and in 2011, even if the economy improves. ”We’re essentially looking at an endowment revenue decline for three years,” according to Dan Rudolph, senior associate dean for operations at Stanford.

As a result, 49 staff members (12 per cent) have been laid off at Stanford GSB with a further eight people going on to reduced schedules. Cuts in travel, food, library services, marketing activities and printing have also been announced.

The announcements are a sad end to Bob Joss’s 10-year tenure as dean of Stanford, during which time he oversaw what was arguably the most radical overhaul of any two-year US MBA programme. ”This was the most painful decision I have had to make in my nearly 10 years as dean,” he said in a statement. ”We regret the need to lay off staff members who have been dedicated to the school and its educational mission.”

What is certain is that where Stanford leads, other top business schools will follow. Many have already announced pay freezes for both staff and faculty. At some business schools, faculty departments are rushing to fill tenure and tenure-track appointments in the belief that these positions will disappear if they are left vacant.

As a result, the US endowment model, widely lauded as the most sustainable funding model for business schools, is looking shaky. This comes at a time when most US schools were implementing expensive plans to increase their global reach in a bid to counter the growing popularity and reputation of business schools in Europe and, in particular, Asia. In last month’s Financial Times Global MBA rankings, there were three Asian schools in the top 20 and one, Ceibs in Shanghai, in the top 10.

www.gsb.stanford.edu

Copyright The Financial Times Limited 2009

We don’t  often  tout Stanford’s own admissions blog as a source of good Why Stanford info (for Essay B) , but a recent post there can give a savvy applicant some great food for thought: one goes to Stanford to learn EQ (emotional intelligence, altho YOU should NOT use that term), or touchy-feely leadership (dont use that term either), a valuable concept whose importance relates to sensing what others need, sensing what is going on in the room, finding the correct (empathetic, innovative) approaches to dealing w. different people in different ways. As post below details, here is how Stanford education resources and philosophy handle those issues: ____________________

Changing the world…through high EQ leadership

Dean Bob Joss, speaking in Hong Kong last month, explained that senior managers of major organizations are the key to solving global problems including poverty, pollution, and infectious disease.

All these problems are so huge that they need to be addressed by large groups of people under the guidance of extraordinary and inspiring leaders.

Said Joss: “The selection [of employees], the development of team work, the giving of feedback, the growth of people are the hardest things to achieve because all people are different; it’s not a technical problem to be solved. It takes a lot of emotional intelligence, and that’s a hard thing for people to develop. It’s much easier to develop technical and cognitive skills.”

To boil it down to elevator pitch length: emotional intelligence (sometimes called EQ) combined with leadership skills will drive global innovation. The conundrum is that teaching leadership EQ is tough. Doing it well is the business school equivalent of scaling Everest.

Back when I was a student, the mainstay of our EQ training was Interpersonal Dynamics, the infamous but incredible course lovingly known as Touchy Feely. The teaching of leadership at the GSB has evolved since my day and now, in addition to the ever-popular Touchy Feely course, encompasses a multi-modal strategy that includes role-playing, interactive lectures, small group discussions, and coaching. Then there’s the executive challenge, the event that brings together first year MBA students and notable alumni for a real-world exercise in managing the pricklier issues that confront CEOs every day.

Last night, I was watching the Leadership in Focus video vignettes that the Center for Leadership Development and Research (CLDR) has created to facilitate leadership training. The vignettes portray managers discussing topics such as implementing change, making good decisions, and building teams. Not all the managers chose the optimal alternatives or achieved success.

These video cases are not explicitly about leadership EQ, but EQ inevitably creeps in. As I watched these videos, I realized that I was reacting more to the interpersonal vibes emanating from the managers than to the content. Some of the managers were able to step outside their own perspectives and understand the issues, personal and professional, that others were facing. Others were unable to make that transition to the point of seeming downright callous. I found myself disagreeing with their choices and thinking: “glad that’s not my boss.” Their lack or inability to connect with and inspire their subordinates led to rifts that could not be easily mended.

Here at the Stanford GSB, our innovative leadership training challenges students to question their assumptions, to step outside the boxes they have constructed for themselves, to reach out to others, and to embrace a broader understanding of the world around them, both literally and figuratively. The two-year MBA program enables students to begin a process of self-examination and transformation that will allow them to become the kind of innovative, principled, and insightful leaders who will change the world. Part of our mission at Stanford.

For more information on the CLDR, see http://www.gsb.stanford.edu/cldr/

–JoAnne Goldman

THE FOURTH SECTOR–A SORT OF UPDATED SOCIAL ENTERPRISE MODEL.  IF YOU ARE ARE PLANNING A GOAL STATEMENT THAT INCLUDES A ‘FOR BENEFIT (VS. FOR PROFIT) MODEL, BELOW COULD BE HELPFUL STARTING PLACE IN RESEARCH TO MAKE YOU SOUND SERIOUS. JUST GOOGLE SOME OF THE KEY PROPER NOUNS, AND YOU WILL BE EN ROUTE TO A GREAT 2-HOUR JOURNEY IN SELF EDUCATION.

TO WIT

http://www.fourthsector.net/

PS, AMAZINGLY NOT IN WIKIPEDIA, SOMEONE W. MORE TECH SAVVY THAN ME, PLEASE START A STUB.

WILLIAM SHUTKIN

The new, evolved capitalism

By William Shutkin  |  July 27, 2007

 In the past several years, the line between for-profit business and nonprofit mission has started to erode. A new breed of social entrepreneurs has challenged traditional philanthropy and what they perceive as its limitations in effecting large-scale reforms. On one side, foundations such as Google and Omidyar, as well as nonprofits like the New Hampshire Community Loan Fund, have begun to invest in for-profit businesses with a strong social mission — software companies providing basic services to the poor, for example, or businesses that preserve good-paying jobs in struggling rural areas.

Meanwhile, private, money-making enterprises are incorporating social and environmental concerns directly into their business models. Honda and General Electric have recently launched bold environmental initiatives aimed at dramatically reducing carbon and other air pollutants from their products. Altrushare Securities, a for-profit brokerage firm, works to help economically distressed communities like Bridgeport, Conn., where it’s based. And the list is growing.

These social enterprises are transcending the boundaries separating government, business, and nonprofits and forging a new meta-sector, what some are calling the “fourth sector.” In the process, they are beginning to refashion American capitalism, long the nemesis of many reformers, into a, if not the, principal agent of social change.

Like carbon offsets, American philanthropy can be understood as an interim step in a larger process of transformation. Just as the solution to global warming ultimately requires each of us to dramatically reduce our carbon emissions ourselves rather than paying others to do it for us, we’ve come to understand that lasting, penetrating social change demands that our economic system, and the firms operating within it, integrate social needs directly into their business models instead of relying on charitable interventions after the fact.

In the fusion of commerce and the common good we are witnessing the birth of a new species of capitalism. For-benefit is starting to compete with for-profit as the dominant MO of a growing corps of capitalists not content with simply reaping financial rewards.

But we are also witnessing something else, something equally profound. The emergence of fourth-sector firms demonstrates what is perhaps capitalism’s greatest asset — its essential dynamism and capacity to change, to renew itself over time, however incrementally or begrudgingly, in response to new social conditions and markets.William Shutkin is a former foundation CEO and a trustee of Echoing Green, a funder of social entrepreneurs.