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If Dean Sri Zaheer could wave a magic wand to improve the standing of the Carlson School of Management at the University of Minnesota, what would she wish for?

To have the Carlson School mentioned in the same breath as two of the best business schools at public universities in the world: the University of Michigan’s Ross School and UC-Berkeley’s Haas School of Business.

“We’re just as good or better than they are,” she insists, ticking off a list of attributes to make her case.

• A highly admired faculty with superstars in such core areas as marketing, strategy, organizational behavior, and social media.
• An impressive slate of corporate recruiters who have helped Carlson post job placement rates that exceed most of the very best business schools in the past two years.
• An intimate student culture where classes are small and MBA candidates know each other and the faculty by first name.
• A loyal alumni network with senior executives who have climbed to visible positions at J.P. Morgan, Thompson Reuters, Morgan Stanley, Best Buy, and Wells Fargo, Disney, and McKesson.

“Our student outcomes are great,” says Zaheer, a 58-year-old dynamo of a dean. “We’re hands-on and high touch. What we offer our full-time MBA students is a boutique educational experience, customized to their individual needs. All the students know each other by their first names. They get attention.”

Last year 97% of Carlson grads had job offers three months after graduation

Last year, Carlson matched such schools as Dartmouth’s Tuck School of Business, Harvard Business School, and Columbia Business School for the best placement record three months after graduation (see MBA Jobs Back For Class of 2011). Some 97% of Carlson’s MBAs had job offers in hand 90 days after receiving their degrees.

The 3% “unemployment rate” was five times better than Ross, where 15% of the class still failed to land a job offer three months after graduation, and nearly three times better than Berkeley, where 8% were without offers.

What’s more, Carlson’s MBAs reported average salary and bonus of $115,988 last year—impressive for a school in Minneapolis and comparable to Michigan’s $130,688 or Berkeley’s $136,576 after the difference in cost-of-living is factored into the numbers. Though all the data is not yet in, Zaheer says Carlson’s Class of 2012 has fared just as well if not better. Starting salaries for this year’s graduating MBA class were up $5,000.

Zaheer, who came to Carlson 20 years ago as an assistant professor after completing her PhD in international management at MIT’s Sloan School, was drafted to be interim dean in 2011 when Alison Davis-Blake departed for Michigan’s Ross School. After a nine-month stint as interim boss, the school named her dean in March of 2012.

Her main challenge has to do with her magic wand wish. It is to overcome a perception that the school is merely regional player. “We want to make sure we get recognized for what we are,” she says. “Our location is a blessing and a curse. We have these amazing relationships with Fortune 500 companies that are in our backyard, but our location is a challenge because we have to change the perception that we are a local or regional school.”

A feisty advocate for the school and its students

Her feisty advocacy for Carlson is partly a function of the deep investment she has made in the school. Both she and her husband, Carlson strategy professor Aks Zaheer, have been teaching at the school since 1991. Before being tapped as Carlson’s new boss, she had been the associate dean for faculty and research. Though their daughter recently graduated with an MBA from Harvard Business School, the university would be hard pressed to find a more passionate spokesperson for the school.

Zaheer believes Carlson is often overlooked because of the media emphasis on the East and West Coasts, which she says gives those schools far more visibility. Another factor is the small size of the school’s full-time MBA program. This fall, Carlson took in just 107 students, up from 98 a year earlier. Zaheer wants to raise that annual intake to around 130 to 150, but will do so slowly “without any impact on student quality.”

Carlson’s other business programs tend to overwhelm the full-time MBAs. The school boasts 2,350 business undergraduates, 1,400 part-time MBA candidates, and 130 executive MBA students. Even its specialized master’s degree in human resources boasts 140 students, making the full-time MBA program the smallest of its initiatives. “The full-time MBA drives the excellence in the other programs,” she says.

‘We are the place for real business’

In a world where most deans only talk off the record about their competitors, Zaheer has a rather bold and blunt style. As she sees it, “Stanford is for entrepreneurs. Wharton is for Wall Street. Harvard takes in consultants and investment bankers who go there to party hard for two years and go back to consulting and banking. We are the place for real businesses, whether it’s healthcare, consumer marketing, or agricultural business. We’re way better than Kellogg in marketing, and we’re among the top three schools in big data analysis.”

Sure enough, Carlson’s annual crop of MBAs goes into a far wider variety of industries than most. Some 28% of last year’s class landed jobs in consumer products, while 15% went into healthcare, pharma and biotech–the same percentage that went into finance. Only 10% of the class became consultants—the exact same share that went into manufacturing.

The reason for both the job success rate and the diversity has a lot to do with the Minneapolis-St. Paul metro area, which is home to at least 18 of the Fortune 500 companies, including 3M, General Mills, Medtronic, UnitedHealth Group, Target, Best Buy, SuperValu and Land O’Lakes. Several of the world’s largest private concerns also have their headquarters in the area, including Cargill, Carlson Cos. and Andersen Corp.

‘Our students have ringside seats to everything that is happening’

“Our students have ringside seats to everything that is happening in the world of business,” maintains Zaheer. “Wall Street is laying off 50,000 people this year. If you want to be an investment banker, go to Wharton. For folks who are trying to do something different with their lives, there is nothing better than our school.”

As one of the first business schools to put experiential learning into its MBA program 15 years ago, Carlson does an exceptionally good job of hooking up its students with the area’s name brand, hometown companies. It boasts four “enterprise” programs that allow teams of students to work on real challenges from client businesses.

This is not a week or two visit at a company. These projects span 15 months and absorb 10 of the 60 required credits for the MBA program. Students are placed on small teams managed by both a professional and academic director and put to work on real problems. Participating companies pay Carlson between $30,000 and $45,000 for the privilege of working with the school’s students.

‘A hands-on, high-touch way of doing business’

“As you learn the theory in the classroom, you want to have the ability to straight away apply it,” explains Zaheer. “So you get this hands-on, high-touch way of doing business. I meet a lot of business school deans who say we don’t know how to keep our students engaged in the second year. Year two is a party. Not here.”

Some 30 to 40 students work in each of the enterprise areas—brand, consulting, ventures, and funds. The latter is one of the three largest investment funds managed by business students in the world, a $40 million pot of assets divided into a growth fund and a fixed income fund. The consulting program, headed by an ex-McKinsey manager, has worked with such companies as Best Buy, Medtronic and Northwest Airlines on projects.

Students aren’t only getting real world experience here. They are connecting with companies that are likely to hire them once they graduate. “Firms get to know our students very well from the enterprise projects,” reasons Zaheer. “It’s phenomenal for career changers but it’s also good for career enhancers because they have the ultimate responsibility for the project work.”

A “global discovery program” is part of a second-year course that culminates in a two-week international trip every January. Each section of the class travels to a different locale around the globe. Once they return, students reconvene in the course to engage in a comparative analysis of different regions.

Faculty research output ranks high by one independent source

She points out that the school’s faculty is ranked highly on an Academic Ranking of World Universities, a ranking put together by researchers at Shanghai Jiao Tong University that rates schools on faculty research. In the economics/business category, Carlson was tied with Ross for 14^th in the world in 2012, ahead of UCLA’s Anderson School, Duke, Cornell, and the University of Southern California.

Among the star faculty are Myles Shaver, who teaches corporate strategy and has racked up numerous teaching awards, regularly garnering the highest possible grades in student evaluations; Kathleen Vohs, a marketing professor brings psychological perspectives to business issues and has come up with some insightful theories on self-regulation. Other notable professors include marketing guru Vladas Griskevicich, human resource expert Michelle Duffy, and Ravi Bapna, a social media and information technology prof who is a thoughtful observer of the so-called “big-data revolution.

In common with many public universities, Carlson has seen its state funding decline dramatically in recent years, putting significant pressure on the school. State funding has fallen from some $13.7 million in fiscal year 2007 (about 17% of the school’s operating budget) to about $4.0 million last year, or less than 3.6% of this year’s budget.

Putting through a $2,000 surcharge on undergrads

One of her first initiatives as dean was to get the school on a more secure financial footing. She spent a good deal of political capital to convince the university to impose a $2,000 annual surcharge on undergraduate business majors. When that surcharge takes full effect in 2016, it will bring in an additional $4.8 million in revenues a year to Carlson.

Zaheer expects tuition to account for $75 million of the school’s annual $95 million budget. With an endowment that ranges in value from $135 million to $165 million, Zaheer believes the school is in much better shape thanks to the surcharge. Her next goal is to significantly raise Carlson’s endowment, though she won’t yet say how high it needs to be to fulfill her vision for the school.

“We have to do something about keeping higher education affordable,” she says. “We have a public responsibility to educate our people. So a big part of it would go toward scholarships and to retain and build our faculty. I go to conferences and deans openly envy our faculty. I want to keep it that way.”

Zaheer has predictably strong opinions when it comes to the value of the MBA degree and believes that critics who question that value are dead wrong. “It’s a seriously ridiculous debate. It’s populist, anti-elitist rhetoric. A business degree is probably one of the few investments today that has a guaranteed payoff.”

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