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It was a pretty remarkable time to be on campus. One of the benefits of having a curriculum based on case studies is our ability to respond in real-time, so each week I'd hear new examples of how faculty were incorporating elements of the evolving crisis into their courses. One faculty member, for example, who was co-teaching a course on consumer finance with a colleague at the Law School, simply built a session around a pending piece of legislation on a proposed financial product safety commission. In the required curriculum, our Finance and our Leadership and Corporate Accountability faculty wrote and co-taught a case on JP Morgan and Bear Stearns, exploring issues such as capital and liquidity, and internal and external governance. Multiply these examples again and again, and you'll get a sense of the activity under way. Outside the classroom, faculty were writing op-eds and testifying in Washington, and our students were attending panel discussions and rethinking their postgraduation plans.
There definitely were some lessons. I think we saw quickly where we needed to strengthen the MBA curriculum, including areas such as risk management and understanding the increasingly connected interface of business and government. We'll need to find new ways to help our students think about these challenges without stifling innovation and entrepreneurialism.
And our faculty have been rethinking what they know and what they thought they knew. We had a series of what we called "deep dive" seminars through the spring where they could present early stage research; it turned out to be a good forum for people from different backgrounds to share their perspectives and experiences, and is leading to some important new research streams.
The financial crisis shined a light on leadership—good and bad. Clearly there are areas where business schools—HBS included—need to be doing more. At the same time, the crisis revealed just how deeply important the MBA and management education are in preparing students for an increasingly complex business world. As companies become more global, as they become more dependent on science and technology, as the pace of change increases, as organizations become flatter and more networked, much more is expected of corporate leaders. We see this as a huge opportunity, and indeed a responsibility, for the School.
So the need for leaders who know how to make a difference in the world has never been greater than it is today. The need extends beyond business to the social, government, and nonprofit sectors as well. We prepare students to become leaders by cultivating qualities that we believe are fundamental to good leadership. Things like judgment that leads to sound decision-making. An entrepreneurial point of view. The ability to listen and communicate effectively. A deep sense of one's values and ethics. And the courage to act, based on those values and ethics.
People with an MBA education are moving into positions of responsibility and leadership more quickly than in the past. And it's not just in large or medium-sized firms. It's in small companies, and entrepreneurial ventures, and hospitals, and education—it's everywhere you look.
I've been on the faculty long enough to see both sides of the recruiting cycle—years when students have multiple job offers and recruiters are anxious about who they'll get, and years when recruiters aren't posting many jobs and students are anxious about where they'll go. Last year threw a new twist into the experience, as entire sectors withdrew from the job market.
Our Career and Professional Development team had been watching signs and preparing for a down year, and we began investing in things like career coaches even before the year was fully under way. And then we waited for the anxiety to set in. Surprisingly, however, it didn't. Students were notably more thoughtful in approaching their job searches, and more willing to engage in long-term planning.
By the end of the year, our numbers were down but not as badly as we'd anticipated. Three months after graduation, 87 percent of the graduating students seeking a job had accepted an offer, compared with percentages in the low- to mid-90s for the few years before. Satisfaction with their offers dropped slightly, from 8.3/10 for the Class of 2008 to 8.0/10 for the Class of 2009. But judging by the many students I spoke to throughout the year, they were excited about the opportunities ahead of them, and the potential to make a difference. It was great to see.
Well, our graduating doctoral students faced a difficult job market too. With most universities cutting budgets and in some cases reducing their faculty, tenure-track slots simply were hard to find. Fortunately, the majority of our students still were placed at top business schools. In Executive Education, we feared a real drop-off in program attendance as companies scaled back on leadership development activities. The reality wasn't as bad, which we attribute at least in part to the investments we've made in corporate relations over the past 3-5 years. The decline we did experience was largely in custom programs, which makes sense. In difficult times, few companies would believe it's the right moment to send groups of management away, no matter how good the purpose.
Programmatically, we saw the same case and course development unfolding in Executive Education. We offered new programs on understanding the crisis and its causes and on managing in a downturn, among others, as well as additional sessions of popular programs to ensure we could meet our revenue targets. That's important to us, because the revenue, in turn, is a key source of support for the faculty's research.
Having a global presence continues to be really important to the School's future. Our philosophy is that some knowledge can only be gleaned at the source. So our strategy is to get out on the ground where people are doing business around the world and bring that knowledge back to the campus. The School's global research centers are central to our success in that regard. They give faculty reach into every corner of the world. In the case of the financial crisis, we are able to study systemic issues on a global scale, which helps us think more comprehensively about how to prevent them from happening again. What kinds of organizational and managerial safeguards are necessary? What kind of culture guarantees that people are thinking about the risks involved? What kinds of compensation systems are appropriate in an environment of short-term volatility? These questions have relevance everywhere in the world.
Of course the global work of the faculty had relevance prior to the crisis, and it continues to be important. We need to understand how leaders of companies around the world engage in global competition, build global supply chains, and navigate global financial markets: for example, understanding how an Indian manufacturer of tractors and other farm equipment is thinking about competing in Eastern Europe, or here in the U.S. for that matter. You can't learn all these things from Boston.
As part of an expanded global strategy, we are planning to offer Executive Education programs in locations beyond Soldiers Field. For example, this coming year we will be using a new facility in Shanghai to serve as a place for our faculty to teach and to learn from executives from China and Asia. The space in Shanghai will also be a home base for our MBA students during the China immersion in January. We have been developing new programs in India and Europe as well.
After the collapse of Lehman Brothers, the speed of the descent and the degree of the crisis were obviously surprises. We responded in the fall of 2008 by immediately reducing some of our operating expenses.
We made additional budget cuts in January 2009, and then in the spring of 2009, we launched a major cost reduction program in order to accommodate what was surely going to be a reduced endowment distribution in 2010 and possibly well beyond that. We tried to get all of that out of the way early, and I believe we have, so that our cost structure is now fully adjusted to a lower level of endowment distributions.
My view is that you need to react quickly and with measures large enough to make sure the reductions only have to be made once. What you don't want to do is to get in a position where you have to ask people to cut their budgets three years in a row. We also stayed away from making across-the-board cuts. We asked everyone in the HBS community to think about how we need to do things differently, and they responded to the challenge extremely well. While we have reduced costs significantly, I believe we have been successful in preserving the integrity of the learning experience, our commitment to financial aid for students, and our investments in faculty research. We're staying true to our mission.
We worked hard to reset our cost structure last year (and did), which is the good news. At the same time, there's a lot about the future we still can't predict.
Harvard Business Publishing, for example, is facing tremendous pressure—as is every other publishing company in the world—as consumers increasingly expect content free, in smaller online chunks, and ideally on their mobile device. We have a great team leading the organization, and they've retooled their infrastructure over the past two years to create a better platform for the innovations they now want to pursue. But rapid changes in the market will require us to be increasingly flexible and responsive.
We think there are new opportunities to enhance our Executive Education portfolio too, but they will require two things: more facilities and more faculty. On the facilities side, we need more beds, breakout spaces, and classrooms to accommodate participants in our short and long programs, even as we experiment with modular and online offerings. On the faculty side, we need experienced individuals with a deep connection to practice. Both of these will take time to develop.
Finally, we are citizens of and deeply connected to the broader Harvard community, and all the ships of the University will to some extent rise and fall in tandem. As the center of the University looks to recover from losses in the endowment, we anticipate we'll be asked to help—in ways tangible and not—in that effort. We are committed to doing so to the extent we don't lose focus on our own strategic priorities.
I think it's an important moment for the School. As I noted, the demand for management education, and for leaders, never has been stronger. We need to continue focusing on the core of what we do well—general management—but also look beyond the core, and apply management practices to address complex societal problems in areas like healthcare, social enterprise, and the environment. We are uniquely well positioned to do so, and to extend the impact of HBS in organizations both large and small around the world. I'm excited by what I see ahead.