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Book Excerpt: Founding Dean William H. Donaldson on the Early Days of Yale SOM

In a new book, Yale SOM’s first dean looks back on a long career in business, government, and education. In this excerpt, he describes the origins of Yale SOM’s unique cross-sectoral approach and the collaborative, inclusive culture of the Charter Class of 1978.  

William H. Donaldson, Yale SOM’s founding dean, recently published Entrepreneurial Leader: A Lifetime of Adventures in Business, Education, and Government, written with Karl Weber, which collects memories and observations from his long career in business, government, and education. 

A co-founder of the Wall Street firm Donaldson Lufkin & Jenrette, Donaldson has served as U.S. undersecretary of state, counsel to vice president Nelson Rockefeller, chairman of the New York Stock Exchange, chairman and CEO of Aetna, and chairman of the Securities and Exchange Commission. 

In these two excerpts from the book, he discusses his tenure as dean, from 1975 to 1980. They are republished with permission. Copyright 2018 William H. Donaldson. All rights reserved.

Given the unique scope and mission of the school, we made the conscious decision to call it a school of management rather than one of business—hence, the Yale School of Organization and Management (SOM). Just as I’d hoped, SOM developed into something quite new in the world of higher education. Unlike other management schools, ours recognized the growing importance of public management as practiced in the government and nonprofit sectors as well as their increasing interconnection with the world of private, for-profit business. I’d seen firsthand the gaps in knowledge, understanding, and respect that existed between people in business and people in public-sector leadership. Those on either side of the divide often failed to grasp the importance of the challenges faced by their counterparts in the opposite arena; many failed to appreciate how much they could learn from one another. To tackle the problem, we built a faculty with deep experience as leaders and thinkers in all three sectors—for-profit, nonprofit, and government—and we developed courses that included case studies, historical examples, disciplines, skills, and vocabulary from across the board. We added veteran business educators and practitioners, whom we dubbed “professors of the practice of management,” to the core group of OB and OR faculty, as well as faculty “on loan” from other departments of the University.

Our innovations weren’t restricted to the curriculum. We named the degree we offered a Master’s Degree in Public and Private Management—an MPPM as opposed to the traditional MBA. (The students irreverently reinterpreted the MPPM as standing for More Power, Prestige, and Money.) We also developed a new way of teaching leadership, one in which students helped to shape the School’s infrastructure, where teamwork and group learning were prioritized, and where hierarchical, top-down power was minimized. We introduced a simplified grading system in which students received ratings of “proficient,” “pass,” or “fail” in order to reduce the emphasis on grades and encourage cooperation rather than competition. In all these ways, we were ahead of our time.

Building this new kind of management program from scratch posed a heady challenge—especially within a historic institution like Yale, where the eyes of the world would be upon us and where failure was clearly not an option. However, we had tremendous support from the University and a highly creative, deeply committed team of faculty and administrators working to make the vision a reality. We mapped out our innovative curriculum, publicized our new educational concept, and began recruiting students. We didn’t talk about ourselves as “entrepreneurs,” but the spirit in which we worked was entrepreneurial. There was no grand blueprint for what we were doing. We just tackled the job one task, one day at a time. You might say that we built the School of Management in Yale’s garage.

Why did students in that first class choose SOM? There is probably no single conclusive answer. At the beginning, it wasn’t a school so much as a powerful idea embedded in a prestigious institution with a core of dedicated and talented faculty. Some students came because of the cross-sector vision that the University and I developed and stamped on every piece of outreach we distributed. Some were attracted by the Yale name. Some liked the entrepreneurial aspect of our vision. And, truth be told, some were probably attracted by SOM’s having as its first dean an investment banker who had started his own firm and then gone on to take leadership positions in government and education.

What they all had in common was a desire to learn the mechanics and utility of global organization. They wanted to learn how to do their jobs better, to change their jobs, to make more money, and to be seen—correctly—as professionals in complex fields worldwide.

In those early days, I remember welcoming the Class of 1978 by observing, “You will forever be the Charter Class.” History has borne that out. SOM has subsequently had the Charter Class, the Charter Alumni Board, the Charter 5th-reunion class, and other variants through, most recently, the Charter 40th-reunion class. 

Even today, when alums are introduced as members of the Class of 1978, they often elicit responses of awe from later graduates. 

I have mentioned the part played by the Organizational Behavior (OB) faculty in the founding of the School. Perhaps the most striking aspect of the initial years was the pervasiveness of OB in the curriculum and the culture. Essential to education at SOM from the first day of class was building a collaborative community of students who would support one another in learning. In addition, the emphasis on individual and group behavior gave students knowledge and experiences that would inform their work as future leaders in organizations where working effectively in groups is required to be successful. Prominent features of the unique SOM approach included an absence of grades, no class ranks, an emphasis on community building and group dynamics, and tutorials given by peers. 

In probing themselves and the activities of others in the class, issues of race and gender frequently arose. During the first semester, one woman in a group workshop interrupted the discussion with the observation, “There are a lot of deep voices drowning out the higher-pitched ones.” Her point was that competitive men trying to maximize their individual input were tending to silence the contributions of women. Thus, the entire group was sensitized to “group discussion etiquette”— not a common topic in 1976, and one that the students at SOM, not the faculty, identified and addressed. 

Perhaps empowered by the OB framework and culture, students in those early classes took an unusual degree of ownership over the unfolding progress of the School. They often worked alongside faculty and staff to analyze everything from how courses were being taught and received to the grading system and the kinds of extracurricular initiatives made available. It was a heady and sometimes tense process, but one that enabled the School to course-correct more effectively than would otherwise have been possible. 

The fact that we created a new school of management based on groundbreaking cross-sector approaches and analysis, and that we did so in just twelve months, was remarkable enough. Even more unexpected was the strength of the OB culture. Not everyone on the faculty was enthusiastic about the idea of yielding the academic high ground that characterizes a traditional business school approach. And while most of the students were favorably disposed to the OB approach, many felt uncomfortable with the group-oriented analysis it involved. But for me, this unique style of management training was a revelation. I found it to be the most dramatic and compelling pedagogical and cultural aspect of my tenure as dean. It was entrepreneurial, it made sense, and I embraced it.

Read an excerpt from Entrepreneurial Leader in Yale Insights, about the importance of creating a sense of ownership in any kind of organization.