2014 Dean of the Year: Rotman’s Roger Martin

by on December 28th, 2013

Transformation is an overused word. It is pulled out of the dictionary to describe some pretty ordinary things. But that is not the case for either Roger Martin or the University of Toronto’s Rotman School of Management.

In the 15 years that Martin led Rotman, he utterly transformed the institution from a small, irrelevant Canadian B-school to a legitimate global player. More tellingly, much of the transformation can be chalked up to Martin’s force of will, his formidable intellect, and his bold and often provocative decisions that have indisputably made Rotman the best business school in Canada. Martin’s transformational accomplishments earn him Dean of the Year honors from Poets&Quants for 2013, and the first dean who is no longer in the job to be given the accolade. He joins Harvard Business School’s Nitin Nohria and the University of Virgina’s Darden School Dean Robert Bruner in Poets&Quants’ Hall of Fame.

At the end of this past June, the 56-year-old Martin completed one of the most successful deanships in recent memory. During his stint, the former strategy consultant for Monitor Co. doubled the physical space of the school, quadrupled the endowment, increased the size of the faculty to 113 from 30 and the Rotman staff to 300 from 60, and boosted the student population by 300%.

Among a handful of the most successful deans in the past quarter century

He raised more than $250 million for the school, reeling in eight eight-figure gifts—roughly a third of the 25 eight-figure donations the entire university has received in its 175-year history. The school’s annual budget is now $130 million, up from a little more than $13 million when he became dean in the fall of 1998.

Many agree that what Martin has accomplished makes him one of a handful of the most successful business schools deans in the past quarter century. Sally Blount, dean of Northwestern University’s Kellogg School of Management, puts Martin in the company of such transformational leaders as Donald Jacobs, who had put Kellogg on the map years earlier. “Rotman has surpassed every expectation I ever had,” says Joseph Rotman, a entrepreneur and benefactor whose name is on the business school.

And yet, when he took the job, Martin faced, as one insider now puts it, “myriad institutional forces that make his success all the more improbable and impressive. As the title of his latest book says, the man ‘plays to win.’”

When he arrived, faculty were paid half the rate of the best U.S. professors

Salaries were one big hurdle. When Martin arrived, Rotman had been hemorrhaging faculty. Though it had 48 approved positions, it only had 36 full-time, tenure stream faculty members. The school had lost a dozen professors over the previous couple of years, largely because Rotman—which then ran at a deficit—paid roughly 50% of the prevailing rate of the top 50 U.S. schools. As soon as a professor achieved some distinction in a field of expertise, he or she was quickly poached by another school who could pay more.

For Martin, the trick was to figure out how to hire top-notch business professors with no money to do so. His answer to the puzzle? “5-4-4-2” It stood for the following goals: quintuple the endowment, quadruple tuition, quadruple revenue from executive education and double the size of the MBA cohort—all in five years. Those goals would allow Rotman to hire world class faculty at world class salaries.

“Most thought it insane,” admits an insider. “But under Roger’s leadership the school did it—and that was followed by a further 50% increase in the cohort and another doubling of tuition. The strategy allowed Martin to build a world class faculty that routinely churns out leading edge research.

Rotman now tops every other school outside the U.S. in business school research

In fact, the most recent Financial Times’ ranking of schools whose professors publish the most articles in the top 45 academic and practitioner journals shows that Rotman is the highest ranked school outside the the U.S. At ninth in the world on the FT’s research analysis, Rotman is tied with Northwestern University’s Kellogg School and the University of Michigan’s Ross School.

And although rankings show Rotman trailing York University’s Schulich School of Business as the best Canadian institution offering a full-time MBA program, the lag effect inherent in ranking systems makes it all but certain that Rotman will soon be recognized as Canada’s leading business school. It already has the highest rank of any Canadian school in The Financial Times.

And yet, Martin himself admits that if he had any idea what it was like to be a business school dean he would have turned the job down. “In truth,” he says, “I didn’t super want the job. I knew nothing about it. I was clueless and minding my own business. If I had known what I know now about the job, I never would have taken it.”

‘Young punks in our twenties’

When Martin was approached in 1998, he was in his 13th year as a director at Monitor Co., the global strategy consulting firm in Cambridge, MA. The Canadian, who earned his MBA from Harvard in 1981, had served as co-head of the firm for two years. “Not only was he very comfortable in Boston, but he had an extremely lucrative situation at Monitor,” recalls Rotman.

The president of the University of Toronto had been on the board of a company that had hired Monitor. Martin ended up working closely with the university president because he sat on the board’s strategy committee. Though it was an opportunity that Martin was not looking for, he came to believe that he could make a contribution to the school if he was allowed the chance to transform it around some key ideas that had surfaced in his consulting work. In the early 1990s, Martin grew increasingly curious about why his firm was hired by clients.

“We were young punks in our twenties when we got going,” he recalls. “I was 27, and I kept asking, ‘Why don’t they hire the big, gigantic firms that have done this 100 times?’ What is it about these problems that doesn’t allow really bright people in these companies to solve them? I came to the conclusion that we were usually hired for unique bespoke problems that no one ever saw before. If you were thinking within the context of one model, you couldn’t solve this new problem. But if you examined it through multiple models at the same time, you could find a solution. So we pulled problems apart using many models, whether they were discipline-based, like marketing and manufacturing, or the stay small or grow big model, or being low-end focused or high-end focused.”

How ‘integrative thinking’ came to be a strategic game changer for Rotman

Martin thought he could bring this “integrative thinking” approach to a business school. It was, he profoundly believed, highly valuable for leaders of business organizations, but . he also knew it would differentiate the school. “I was of the view then and 15 years later that the only real place you don’t want to be in the modern MBA business is the mainstream business school,” he says. “Change is happening more slowly than I thought. But all of the criticism of MBA education from within, I buy completely. I think it is going to get way worse because mainstream MBAs are being taught a damaging perspective on a bunch of things. It’s self-satisfied. That is why I do not want the Rotman School to be a mainstream school. I wanted people to recognize that we are doing something different.”

Of course, the job of a dean has often been compared to herding cats. So when Martin met the selection committee of six faculty members, he put his cards on the table. “I very clearly told the committee, ‘I am going to do this integrative thinking thing. If you don’t like it, do not hire me because I’ll just make you mad. This is just a course you could go on. If you come back and say ‘no,’ I’ll go back to Boston and won’t have to fly my family up here, and I get to keep making vastly more money than this ijob pays. But I am warning you: I am going to do this.” The six faculty members voted unanimously to offer Martin the job.

During his three consecutive five-year terms, including a rare third term as dean, Martin put his chips on three big initiatives: integrative thinking, business design, and expansion. “As I look back on it,” he says, “it does feel as though you make a set of investments and you never know with an investment whether it’s a dumb idea or a smart idea. I think I can look back over the 15 years and say that most of the big investments we made were smarter rather than dumber ideas.”

Martin put his personal credibility on the line

Martin was able to get integrative thinking into the core MBA curriculum so students are taught how to take opposing ideas or models, and instead of choosing one or the other, to create a new model that is better than both.

Unlike most deans lead and orchestrate change, Martin put himself at the center of his single biggest initiative in integrative thinking. He has written fifteen Harvard Business Review articles and published eight books. In the just released Thinkers50 list of the most influential management gurus, Martin is third behind Harvard’s Clayton Christensen and the authors of Blue Ocean Strategy.  “I invested an enormous amount of my personal time and personal credibility in it,” says Martin, who raised $40 million from Marcel Desautels, a leading Canadian businessman and philanthropist, for the initiative. Desautels has a center for integrative thinking at Rotman named after him.

The strategy set the school apart. “When he arrived, Roger challenged the Rotman School to become one of the best, then he spent 15 years pushing boundaries and making it happen,” says Kevin Frey, managing director of Rotman’s full-time MBA program. “What Roger accomplished over his term as dean must put him in a very small group of the most extraordinary B-school leaders ever.”

Another big bet on design thinking and a ‘cute story’

Martin’s second big investment was to bring design thinking to business and organizational problem solving. The approach also came out of his consulting work. In the fall of 2005, he began applying design principles such as rapid prototyping and iterative product design based on immediate customer feedback to new product innovation at Procter & Gamble, working with David Kelly of IDEO and Patrick Whitney of the Illinois Institute of Technology. Martin would end up writing a book with P&G Chairman and CEO A.G. Lafley about it.

Rotman has developed three electives that allow MBA students to major in design thinking. The school has a highly popular design and innovation club. And its focus in the area has led several corporate recruiters, including Nike, Fidelity, and Lululemon, to put the school on their annual recruiting schedules. “We now get designers coming here and they are fantastic,” enthuses Martin, who then lapses into what he calls  a “cute story” worth telling.

“I do these speeches where we bring in students who are interested in applying, and I always hang around until the end. The 300 to 400 people sudden were down to one who didn’t want to leave. She finally came up to me when nobody was here and said, ‘I just have to ask you. I really need to hear it from you whether you really do want a person like me. You are talking like you do but I just have to hear it from you.’

“And I said, ‘It kinda depends. What is a person like you?’

“‘I am a designer,’ she said. ‘My undergraduate degree is in design and I now work for a design firm. And I get the impression that you seem to think that is okay.’

“‘And I said it is. I would like you here.’ She came. She made the dean’s list. She got a great job. But that was her view of business schools. Unless you will tell me personally, directly, to my face, shake my hand and say you are not lying, I do not believe that a business school would want somebody like me. As the selection bias works more and more for us, I hope we can move it more into the mainstream.”

Big companies to Rotman: not enough product to recruit

Martin’s third big bet was on expansion. When he arrived at Rotman, the school had only 130 full-time students. “I looked at the market and said that is inconsequential. It doesn’t matter how good you are, unless your name is Yale. I think Sloan, Stern, Stanford, and London Business School is the perfect size. I went to Harvard Business School and it is such a factory. I don’t aspire to that size. Even Chicago, Kellogg and Columbia—in the 600s—feels too big for a Canadian school. It seems out of proportion to the market.”

His view was confirmed when he asked several multinationals why they didn’t recruit at Rotman. “They said there’s no product,” he recalls. “Why bother? I ran recruiting at Monitor for awhile and we never considered Stanford as anywhere near as important as Harvard, Wharton, Columbia, Chicago, INSEAD. Why? Stanford has good product but no product. There was just not enough product. If we were going to put on a big recruiting effort, let’s do it at a big school.”

Some of the biggest gains in enrollment, moreover, occurred toward the end of his deanship when most business schools, including Harvard, Stanford, Wharton and others, were reporting declines in application volume. Some worried that Martin wouldn’t be able to boost MBA class sizes without a corresponding decline in student quality. Yet, this fall, Rotman enrolled a record 350 MBA students with an average GMAT score of 674, a significant increase from only two years ago when Rotman brought in 265 students with an average GMAT score of 661. The growth plan calls for further increases to an annual intake of 390 students.

 ’The best MBA students want to go to a big consequential school’

“If I didn’t really care about making sure that Rotman is ranked among the best business schools on the planet, I would not have done it,” says Martin. “It has been an incredible amount of work. This is the hardest thing to do, to go from 130 to 260 and then 260 to 390. If you are going down this demand curve further, they say you are going to get lower quality. But it turns out that demand and supply brings demand. These kids aren’t stupid. They want to go to a big consequential school.”

The result: There’s been a spike in the demand for Rotman graduates from top global employers, many of which have decided to add Rotman as the only Canadian school that they recruit MBA students from. In the last 24 months, the school has added such global companies as Microsoft, Huawei, GE, Google, Fedex, Nike, Estee Lauder, Lululemon, Target, and Siemens.

The school’s insiders are naturally generous with their praise for Martin. “We had been punching below our weight for a very long time as a business school,” says Peter Pauly, who has been academic dean under Martin. “He brought a vision, enthusiasm and ambition, and we have been successful ever since. He has been just transformational for the school.”

RELATED STORIES:

2012 DEAN OF THE YEAR: HARVARD’S NITIN NOHRIA
2011 DEAN OF THE YEAR: DARDEN’S ROBERT BRUNER

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