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Harvard Leadership Expert Nohria Named Business Dean

Nitin Nohria, incoming dean of Harvard Business School
Nitin Nohria, professor of management at Harvard Business School, speaks during an interview in Cambridge, Massachusetts, yesterday. Photographer: Mike Fein/Bloomberg

May 4 (Bloomberg) -- Harvard University picked Nitin Nohria, a specialist in leadership and ethics, to be dean of its business school, charging him with transforming management education after financial catastrophes and scandals shook public faith in business.

Nohria, 48, a professor of management at the school, was named dean by President Drew Faust, president of Harvard in Cambridge, Massachusetts. He will begin after Jay Light, dean since 2006, steps down in June. Nohria, who will be tenth Harvard Business School dean, said in an interview that he will emphasize responsibility and the positive role companies can play in society.

“Business itself is at an inflection point,” Nohria said in an interview yesterday in which he referred to events such as the global economic crisis that began in 2008 and focused public attention on corporate and executive misconduct.

“Society’s trust in business has certainly been shaken,” Nohria said. “And as a result some of society’s trust in business education has been shaken as well.”

Harvard was hurt as its endowment, the world’s biggest academic fund, lost about one-third of its value in the economic crisis, dropping to $26 billion last June 30 from a peak of $36.9 billion a year earlier. Henry Paulson, the former Goldman Sachs Group Inc. chairman and chief executive officer who went on to serve as U.S. Treasury Secretary, is a graduate of Harvard Business School, as are former U.S. President George W. Bush and JPMorgan Chase & Co. Chairman and CEO Jamie Dimon.

Faust’s Research

“This was a search and an appointment of enormous importance for Harvard,” Faust said. “I felt that the new dean of Harvard Business School would need to address these questions in a way that would be worthy of these very important times.”

Faust spent hours talking to Harvard’s students, faculty, and alumni, as well as business leaders outside the school, who echoed Nohria’s concerns about the challenges facing business, as well as the role they hoped Harvard Business School would play in addressing them, she said in an interview. The school’s longstanding identity and approach need adaptation to a changing era in which questions about business are arising, she said. Students are focused on ethics, Faust said.

In Congressional hearings last week, U.S. lawmakers accused Goldman Sachs bankers of betting against investments they had sold to customers. Bernard Madoff, the New York money manager alleged to have lost about $50 billion of clients’ money in a decades-long fraud, has also concentrated public attention on corporate behavior.

Business Image

Students are “very concerned about the image of business and its place in American life and the world in general,” Faust said.

Harvard has a tradition of selecting deans from within the faculty. Nohria, the Richard P. Chapman professor of business administration and a former senior associate dean and director of faculty development at the business school, is a naturalized U.S. citizen, born in Mumbai. He is married and has two daughters.

Nohria earned his bachelor’s degree in chemical engineering from the Indian Institute of Technology in Bombay (now Mumbai) in 1984, and his Ph.D. in management from the Massachusetts Institute of Technology Sloan School of Management, also in Cambridge, in 1988. Business leaders are needed around the world, and Nohria’s background is crucial to helping Harvard develop them, Light said.

‘Innately Global’

“His perspective has always been innately global,” Light said today in a phone conference with reporters.

Nohria has co-written 12 books, most recently the “Handbook of Leadership Theory and Practice” (Harvard Business School Press, 2010), which he wrote with Rakesh Khurana, a colleague at the school.

Nohria was one of the earliest management professors to suggest that students take a professional oath of conduct. He first began thinking about it during a year of teaching at the London Business School, in 1996, he said in the interview. His sister, a physician, had taken the Hippocratic Oath, and he asked students what a similar code for managers would contain.

Nohria continued to build this question into his courses after returning to Harvard. In an October 2008 Harvard Business Review article, Nohria and Khurana said that managers had “lost legitimacy” during the past decade, which saw the collapse of Enron and widespread losses in technology stocks. Management needed a code of ethics, similar to those used in law and medicine, to become a “true profession,” Nohria and Khurana said.

Social Contract

“Through these codes, professional institutions forge an implicit social contract with other members of society: Trust us to control and exercise jurisdiction over this important occupational category,” Nohria and Khurana wrote.

Leadership in business is built on trust that comes from the benefits of trade, along with an expectation of ethical behavior, Nohria said in the interview. While that leadership bond with employees and the public has been lost as business scandals and bubbles have multiplied, it can be reestablished, he said.

“Throughout history, there has been this notion of the honorable business person,” Nohria said. “Business people have taken pride that they can do business on a handshake. I don’t know where we lost that, and I don’t see why it isn’t recoverable. I still think business can be done with honor.”

Ethical Behavior

Business students need new approaches to instruction to promote ethical behavior and restore the financial world’s relationship with the public, he said. Nohria promised new approaches to business education that he said would complement the so-called case method, pioneered by Harvard, that has spread around the world. In case studies, students immerse themselves in facts that were faced by decision makers and reach their own conclusions.

The school is experimenting with immersion programs and small learning teams, and looking to add more instruction initiatives, Nohria said.

“What we have to do as a school is usher in what I think of as a new century of innovation, to really remake business education,” Nohria said. “To restore confidence that we can continue to educate leaders with the competence and character to fulfill their positions of power and privilege.”

The business school shouldn’t rest because of the success of the case method, Nohria said.

“We’re in an period of very active experimentation with other approaches, that we have think could have as much power and be important complements to the case method,” he said. “The case method will always be part of our distinctive identity. My hope is that in the years to come we will develop another method that will be a complement to the case method that will have just as much power and be embraced just as widely.”

To contact the reporter on this story: John Lauerman in Boston at jlauerman@bloomberg.net.

To contact the editor responsible for this story: Jonathan Kaufman at Jkaufman17@bloomberg.net.

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