Remarks at Carlson School of Management First Tuesday Luncheon
Good afternoon …
As you might suspect, I am going to talk today, mostly, about the intersection of the business community - locally and globally - and the University.
This will be a series of stories, so let me start with one about Curt Carlson, the master salesman to whom we owe so much.
It's a story about a man who graduated from this University in the depths of the Great Depression, a man who was always crafting, honing and selling his brands and their reputation.
By 1991, he had grown many businesses, including the chain of Radisson Hotels.
It came to pass that David Kidwell visited Minneapolis in hopes of becoming the new Dean of our business school.
Candidate Kidwell gave a brilliant presentation before a gathering of community leaders, and Curt Carlson was in the audience.
He beckoned Kidwell for a conversation, and Kidwell figured this was a good sign for his job prospects. After all, the school was named after this guy!
Curt Carlson, salesman that he was, put his arm around Kidwell's shoulder and the architect of the Radisson brand asked him this penetrating question - if you can imagine -
"David … tell me … what hotel are in?"
You know what? Like Curt Carlson, I'm selling a brand, too.
Every where I go, from Minnetonka to Manhattan, I promote and advocate for our University of Minnesota brand.
In many ways it's an easy sell…
After all, we boast:
- a portfolio of world-class degrees,
- a tradition of ground-breaking discoveries,
- from battling AIDS, diabetes and heart disease
- to developing strains of soybeans and apples,
- to innovative software
- and we offer a team of renowned scholars, artists, scientists and problem solvers …
- a treasure trove of human and intellectual capital.
Together, they form the state of Minnesota's only public research university and the most important link in a talent supply chain that fuels Minnesota's prosperity.
And, let me tell you, this University is high-octane fuel.
If this state continues to make it a priority this engine we call the University of Minnesota will continue driving Minnesota's economy and culture into the future.
But sometimes, frankly, it can also be a hard sell.
In many ways our value is underappreciated. … under- recognized. … and misunderstood.
So, please, like Curt Carlson, allow me to put my arm around your shoulder and ask a penetrating question …
And, no, I don't want to know what hotel you're staying in …
But I want to know this: "Every chance you get, are YOU supporting and advocating for this University?"
I want to increase the value of a University of Minnesota degree … your degree, your son's and grand daughter's degree.
I want us to be in the same conversation with Berkeley, Michigan and North Carolina as among the best public research universities in the country.
I want us to provide an indisputably high-quality and rigorous education.
I want us to be known as nimble and entrepreneurial.
I am sure that Curt Carlson would be proud that we're working our tails off to strengthen our brand.
And, knowing that David Kidwell became one of this school's wise and respected Deans, I will assume he stayed that night at the Radisson.
Regent Beeson, Dean Zaheer, students, faculty, distinguished alumni, friends …
I don't think that any members of the Carlson family are here today — are you?? — but we all owe them a great deal for being some of this University's greatest friends.
The generosity of the Carlson Family Foundation to us and other worthy causes is breath taking.
Curt and Arleen were remarkable philanthropists. Their children have continued a very special tradition of giving.
I thank them, and this entire community should thank the Carlsons, too.
You know, we can talk about the University's incredible $8.6 billion annual economic impact until our faces turn maroon and gold.
And it is impressive.
But we do something really well that's more difficult to display neatly on charts and graphs.
We create leaders.
They touch us and our communities.
Leaders who start up companies, who become mayors, who manage medium-sized firms or who become chief research officers and CEOs of the 20 Fortune 500 companies we have here in Minnesota.
Leaders who write books and screenplays, who score touchdowns and win WNBA championships.
We create leaders across our Twin Cities campus, and throughout our system — from Duluth to Morris and Crookston to Rochester.
Let me tell you the stories of two of them who emerged from the Carlson School.
Nine years ago, Irene Fernando, a Los Angeles-area high school student, fell in love with the Carlson School and the U. She was just 16 years old.
As part of a program for out-of-state high school students of color, Irene visited our campus and later she became an undergrad at Carlson. While there, with three of her classmates, she created a student group called Students Today Leaders Forever, or S-T-L-F.
Their idea: a secular group of young people traveling to a handful of cities to examine social problems, work with other young people, and develop leadership skills.
As juniors, Irene and friends took what they presumed was going to be one of the dryer classes in the history of the Carlson catalog: "Operations Management."
But it transformed them, and their concept of S-T-L-F, which is alive and thriving in 12 states and has a nearly million dollar annual budget.
Learning business skills at the Carlson School changed those young people, and I'm proud of that.
Irene, please stand to be recognized.
Then there's Andy Wallmeyer.
He began as one of those nosy business journalists, travelled the world, wound up back near his Lake Elmo boyhood home.
He wanted something new and bold.
He entered the Carlson School in pursuit of an MBA and quickly set his sights on management consulting.
Through the innovative Carlson Consulting Enterprise — or C-C-E — Andy received hands-on management consulting experience, and he says C-C-E director Phil Miller is not merely a mentor.
Andy calls Phil his "Yoda."
So, when Andy had earned his degree, with Phil's encouragement, he went after a management consulting position, and he got one at one of the world's top firms, McKinsey.
Here's the kicker: last week I attended a meeting of the Itasca Project's Higher Education Task Force. I'm a member.
We're looking at creative ways to make higher ed in the state more efficient and more responsive to the business community.
Andy Wallmeyer — newly minted M-B-A — was one of the consultants advising US at the Itasca Project.
So, — presto! - just months out of Carlson, Andy is already one of MY Yodas!
Andy, Phil and all the others at the C-C-E table, please stand so we can recognize you.
By the way, when Andy landed that job right out of Carlson, he was not an exception.
Recently, Bloomberg Business Week ranked the Carlson School's MBA program the best in the nation in job placement, ahead of Columbia and Harvard, with 97 percent of our grads having jobs three months after graduation.
97 percent! That's remarkable… especially in this economic environment.
What IS our economic environment? Where do we fit in?
If Minnesota were a nation, our "GDP" would make us about the 43rd 44th largest economy in the world?
We'd be larger than Israel, than the Czech Republic, AND EVEN than Norway.
This region is an important player in a dynamic world market.
I want this University to be even more of a global player. I want this University to pull the rest of the state even more boldly onto the world stage.
We are the state's only public research land-grant university, and our role in the 21st century must be to engage with the world as much as we do with our neighborhoods.
We perform research and create knowledge amid a global race. When you think about what business needs - we deliver.
You need talented employees - check.
You need to control health costs - how about finding cures and innovative treatments, effective wellness programs and education.
Check - we do that.
You need people taught to lead, work and collaborate in a diverse and global environment - check …
But we need to work every day to drive diversity into our student body, our staff, and our faculty.
But HERE IS THE PROBLEM …
Even in that environment of success, we here in the United States and Minnesota are busy DISinvesting in public higher education. We, quite bluntly, are diminishing our higher ed assets - one of our nation's few product lines that remains the best in the world.
Our friends around the world are heading in the opposite direction. They're not disinvesting. They are investing.
Just last week, the European Union announced a $40 billion increase in funding and a 16-fold rise in the number of students being supported in science and research training. They're calling it Horizon 2020. They're calling it their Innovation Union.
We need to keep up. .. and indeed the Carlson School is known for its Global Institute and Center for Business Education and Research. Tomorrow, Carlson will help to sponsor a forum on doing business in Africa. Our Executive MBA program links students here with those in Austria, China and Poland.
But we're doing all this with diminishing state and federal support.
That reduced support means that we will be asking our Board of Regents this week to consider allowing the Carlson School to begin adding a surcharge to tuition.
State support for the Carlson School is now less than 4 percent of its budget. In order to retain our world-class faculty, to hire new faculty and to adequately keep pace with a 20 percent growth in CSOM students since 2006, the college must be free to increase revenues, as the market will allow.
Charging differential tuition is common at Carlson's peer institutions across the nation. Unless we allow Carlson to do so, they will be at a competitive disadvantage.
To remain accessible to low income students, Carlson will also increase financial aid. We need to ensure access.
I am committed to make that access real.
During much of the last five months, I've been listening to - and learning from - a broad array of stakeholders … from legislators to students, from faculty to alumni, from the agribusiness community to the state's leading manufacturers.
I'm very pleased that I'm hearing mostly that the business community has great affection for this University.
I'm hearing that most executives get it that they and their companies need the U for the talent we develop.
They understand that we are also the cultural magnet for this region. We attract the best and brightest. We graduate the best and brightest. They stay. They invent. They create. They serve.
Now, I know.
Some business leaders remain skeptical. They think that the term "University efficiency" is an oxymoron.
That's not true. It's not fact-based.
Over the past decade, we have seen a DECLINE in the per capita revenue from state funds and tuition we receive to educate a student.
Adjusted for inflation, that decline is more than 12 percent.
Still, I know we can and we must do more.
That's why one of my first acts as president was to form an Operational Excellence Group of senior administrators.
We have been meeting weekly to identify opportunities to cut costs, improve efficiency and generate sustainable revenues.
This institution has already done a lot.
Over the past decade, we've closed and merged colleges, implemented enterprise-wide energy reduction and purchasing initiatives, and improved processes in many functional areas. That's the good news.
The bad news is that there is not a lot of low hanging fruit left. Moving the U to the next level will take some heavy lifting and some tough decisions.
Over the next few months, we'll be making those tough decisions.
You all know from your own businesses that change is tough stuff.
But we're getting better at driving it and at seeing superb outcomes when we do change.
A great example is our recent work in the area of business development and technology transfer.
Let me declare this: If you haven't looked lately at our work in this area, you don't know us.
Our Office of Technology Commercialization under the leadership of Vice President for Research Tim Mulcahy has been aggressive and innovative, but also prudent.
After years of hard work and of bringing in industry experts, our Tech Transfer operation has established a strong reputation among stakeholders and entrepreneurs in the economic development ecosystem.
Our ecosystem - like any - is diverse. Small, medium, mega businesses. High-tech, medical devices, agribusiness, nanotechnology, pharmaceuticals, to name a few.
We're in the middle of it all.
Recently, Tim brought in leaders from Columbia, Wisconsin and Stanford - three places that do tech transfer pretty well - and they said, "You do what you do as well as anybody in the country."
And we're at the cutting edge in seeking solutions.
Going further, I'm excited to announce that at our Board of Regents meeting later this week, Vice President Mulcahy will unveil a new and exciting model for the University to partner with industry on our discoveries and intellectual property.
For years, we've all heard that companies love to work with our scientists, but find it annoying how tenaciously the University clings to intellectual-property rights.
So, we're advancing a new model that we think will make University-industry-sponsored research:
- less complicated when it comes to IP;
- and we will expedite contract execution;
- and that will increase clarity, decrease uncertainty, and minimize risk for both parties.
No, we're not giving away the farm. Frankly, the percentage of sponsored research from corporations right now is very small.
But we believe this simpler program will have a great spill over effect, strengthening partnerships and making the U a research destination of choice.
This is a symbol of what I want to do in general across this University. Soon, you will hear of new models for us to enable faculty to more effectively transition their discoveries from the lab or clinic to business and society.
I want us to move from the default mode of NO - can't do it, never done it, won't do it.
To a culture of YES - let's give it a try, let's take a calculated, fact-based risk. You will soon see evidence of that shift in all aspects of our interface with industry and business.
Now of course we also have to move the dial on our educational mission. We have announced that we will be adding 1,000 undergraduate slots over the next three years in the science, technology, engineering, math and nursing disciplines.
We are responding to the demands of the marketplace, from students, families and the business community.
Now, I don't want this to be just "U of M Incorporated," either.
We nurture and honor curiosity and creativity in the arts and humanities, in language and dance.
Our College of Liberal Arts is the largest on campus, and it teaches and produces leaders, too, from those who write clearly, sing beautifully, work tirelessly on social problems and counsel others.
Sure, we train students for jobs.
But our overarching mission and responsibility is to educate students for life.
I am always delighted to recount the story of this year's Minnesota Cup Entrepreneur of the Year. She became a marketing expert. She is a graduate of our College of Liberal Arts.
She was an English major.
Finally, let me talk briefly about one critical challenge we all face.
And about one immediate hurdle we need to leap.
The emergency is the achievement gap between white students and students of color in this state.
It is among the 50 states one of the largest achievement gaps in the nation.
We must work with our K-12 system to close the alarming decline in science and math teaching and learning, in general, and the deplorable differences in educational success among different groups of students, be it racial minorities or from disadvantaged economic backgrounds.
The U must be deeply involved in addressing this crisis.
There may be an achievement gap, but I don't believe there is an ability gap.
As this state becomes increasingly more diverse, this is a K-12 issue, a higher ed issue and, in the end, you must know it is a business issue, too.
We must partner to tackle this.
As I wrap up, I also want to talk about the upcoming Legislative session, which begins on January 24.
The state's budget surplus was very good news.
It stabilizes our budget planning. It most likely means we can keep tuition increases across the board to 3 or 4 percent, which is too much, but far better than many of our peers.
It may allow for a strong bonding bill, thus ensuring that our capital request is granted. That request is targeted at refurbishing and improving some of our aging and energy inefficient infrastructure, and at some important projects on our Duluth campus and at our Itasca Biological Station.
If you haven't already done so, I urge you to join our Legislative Network. Go tosupporttheu.umn.edu. Sign up and stay informed.
If I may say so, we are a terrific investment. A study released earlier this year showed that for every dollar invested by the state in this University, over 13 dollars is generated in the state's economy.
That's a pretty darn good ROI, 13 to 1.
In closing, state funding aside, those of us who have been blessed and who have benefitted from the gifts of this University, need to give back.
Philanthropy is critical, and I am spending much of my time working on increasing it to the University, and mostly to work on the issues of excellence and access. We must shore up our financial aid to students.
Certainly, Curt Carlson understood.
Years ago, when he began to share his generosity, Mr. Carlson said this:
"There is no better way to express my deep appreciation to all Minnesotans than to make available a University that helps our graduates and future executives of our industries competitive with the rest of the world…"
We are striving daily to bring the prosperity to this state that Curt Carlson so passionately sought.
So, before we go to the Q-and-A session, allow me to channel Curt and put my arm around your shoulder once more.
Let me ask you this, "Won't you help me to advocate for this great University and for all that we do?"
I need you to join me to keep this state's economic and cultural engine running.
We need to keep it running … and running strong.
Please join me in this important work.