Commentary: Tenure: An Idea Whose Time Has Gone

Paul Fulton, dean of the B-school at the University of North Carolina at Chapel Hill, was gathering up his papers when an aide mentioned that a few Australian schools were thinking about abolishing tenure. Eyes wide, Fulton shot her a glance. Then he pumped his arm and gave a brief holler of joy: "Wooo!"

They may not all be shouting about it, but other B-school deans increasingly agree with Fulton. Many see tenure--long held sacred by faculties around the world--as an outdated system that drives up costs and lessens accountability. "A lot of schools are going to be taking very hard looks at tenure," says George Daly, dean of New York University's B-school.

They should. Radical as it may sound, it's time to dismantle tenure, and B-schools are in the best position to take the lead. Reflecting the corporations they study, they lately have become much more responsive to their customers: students and companies. The schools now have a chance to strike a blow against an inefficient system that penalizes students.

A relic of medieval times, tenure provides faculty with near-lifetime job security. Only gross misconduct or a schoolwide fiscal crisis can cause dismissal. Academics have long argued that because tenure protects them from the whims of the moment, it is crucial to academic freedom. But it's not the only way to foster free inquiry, and it has created major problems.

Tenure provides little incentive for faculty to do anything outside their narrow spheres of expertise. As a result, it has turned academe into an inward-looking club where, despite platitudes to the contrary in recent years, neither teaching nor contact with the real world is rewarded. Ineffective professors can spend decades delivering the same mediocre lectures.

Even when one discipline is becoming less relevant and another is emerging as critical, tenure leaves schools powerless to shift resources quickly--or force teachers to learn new disciplines. Imagine what B-school profs pondering a case study would say about a company with that policy.

While there are thousands of wonderful tenured teachers across the country, the system's weaknesses aren't hypothetical. In this year's BUSINESS WEEK survey of 4,830 B-school grads, no area showed less improvement than teaching. In core courses at some top schools, such as Stanford and Indiana, MBAs complain of professors who seem to be hardly interested in what they're teaching.

Cost is an issue, too. Most MBAs graduate with debts of over $30,000. Costs will increase as government support continues to wither and globalization and technology efforts require major investments. Tenure, meanwhile, forces schools into decades-long commitments that burden budgets.

What's the alternative? Contracts of, say, five to 10 years. "Your top and good academics would not be threatened by that," Fulton argues. Students and deans could join professors on the committees that decide who gets a contract. That would ensure accountability while preventing deans from remaking a faculty for political reasons. "Let one big-name university do this," says NYU's Daly, "and I think you'll see a lot of changes."

What better candidate than a top B-school, which would still have the reputation to woo faculty and could hold itself up as a model of efficiency for academe? It's a reform movement waiting to happen. All it needs is a leader willing to take some short-team heat for the long-term good of higher education.