By Karen Guzman
If Sharon Oster were to sum up her time as dean of the Yale School of Management, it would be this way: She got things done.
“That’s my legacy,” says Oster, who is retiring from the faculty in May 2018 after more than 40 years at Yale. “That’s how I’d like to be remembered, as someone who stepped into a difficult situation, got to work, and got things done.”
Oster was tapped to lead Yale SOM in 2008 following the unexpected departure of Dean Joel Podolny, shortly after the demise of Lehman Brothers and the onslaught of the worldwide financial crisis. She served as dean until 2011.
“I was not a visionary dean,” says Oster, the Frederic D. Wolfe Professor of Management and Entrepreneurship. “I was a practical, get-it-done sort of leader, and that’s the kind of person you need in a recession. I’m proud of this legacy. I actually think it’s an apt description of me as a person—less about big lofty goals and more about on-the-ground-action. I was the right dean at the right time.”
At the time, budget constraints and shrinking endowments forced many universities to reshuffle their priorities. “My task was to keep the ship moving forward,” Oster says. “Not just afloat, but moving forward, with the curriculum and with the new momentum we had.”
Oster axed plans to give faculty and staff annual salary raises that year, and she asked faculty members to return portions of research budgets that they had not used. She also got to work helping students find jobs and internships in the fragile economy, and took on fundraising for Yale SOM’s new campus, Edward P. Evans Hall. The Great Recession slowed the project, but ground was broken in Oster’s final semester as dean. “We all worked together,” she says, “and it gave us this incredible new building.”
Barry Nalebuff, the Milton Steinbach Professor of Management, calls Oster the “LeBron James of management education, able to carry a team to victory.” And Oster’s leadership reached beyond the dean’s office, into classrooms and faculty and staff offices.
“In a world of givers and takers, Sharon is a giver and has instilled that spirit in those around her,” Nalebuff says. “The culture at SOM is truly a result of Sharon’s leadership. She trains the new hires to be part of an organization that contributes and chips in, and the success of our gender-diverse group is largely due to her acculturation leadership.”
Oster joined the Yale SOM faculty in 1982, when, she says, the school was “a scrappy startup.”
“The early classes were vibrant and exciting, and really very special to teach,” she says. “The students were wonderful then in many of the same ways that they’re wonderful now. We’ve grown, but over the last 30 years, I see tremendous continuity in our students. They’re committed to the school’s mission of serving business and society, and they make things happen.”
Before Oster was Yale SOM’s first woman dean, she was its first tenured woman professor. “When the students heard that I got tenure, the women said, ‘We’re throwing a party,’” she recalls. “Nobody threw parties when a professor got tenure, but the women brought strawberries and champagne and set it up in the Hall of Mirrors.”
In the classroom, Oster helped shape Yale SOM’s curriculum, and she honed a powerful teaching style—part on-the-spot cold-calling, part storytelling—that made lasting impressions on the hundreds of business students she taught. She was selected by students to receive Yale SOM’s annual Award for Excellence in Teaching in 1988 and again in 2008.
Matt Rogers ’89, a senior partner at McKinsey & Company, remembers the “amazing clarity, rigor, and edge” Oster brought to economics. “The debates in her class were among the most vigorously engaging of my time at SOM, and those debates continue today,” Rogers says. “I work in energy markets, where microeconomics defines outcomes. The tools Sharon gave us almost 30 years ago are well worn, but applying these fundamentals still works wonders.”
Oster came to New Haven in 1974, a newly-minted Harvard PhD joining Yale’s Economics Department as an assistant professor. She primarily taught undergraduates at Yale College before joining the Yale SOM faculty in 1982. The first course she taught at SOM was strategy. “Up to that point, strategy had been typically taught by marketing people, but with Mike Porter’s work at Harvard, it came into the realm of economics,” Oster says.
Oster also took on Yale SOM’s core microeconomics course, with Sid Winter, now the Deloitte and Touche Professor Emeritus of Management at Wharton School of Business. “Sid and I really re-did the class,” she says. “It went from being a not very popular course to a very popular course.” The key, Oster says, was gearing the curriculum specifically to MBA students by emphasizing practical applications and business dimensions alongside theory.
“One of the things we did was linear programming,” Oster says. “Nobody had ever done linear programming in economics. It illuminated some problems in the production field and allowed students to see very concretely what the issues were. It gave a concreteness to the principles of economics that was very helpful.”
Oster’s storytelling skills brought the subject to life. “I tilted the course to start with a problem you might have at work or in life,” she says. “I’d ask a question, and they’d give me some math, and I’d say, ‘Yeah, the math is right, but I don’t hear the music. When you’re out in business, are you going to tell your boss this happens because I took the first derivative and set it equal to zero? You have to do better.’”
In teaching, clarity is key, and this holds true in business too, Oster says. “Befuddling someone is not convincing them,” she explains. “That’s an important lesson of good management. In life, sometimes you can get someplace by befuddling people, but it’s not a good long-run strategy. Much better to be able to get to the right answer, and be able to explain why it’s the right answer.”
Oster’s teaching and research earned her the American Economic Association’s prestigious Carolyn Shaw Bell Award, given to “an individual who has furthered the status of women in the economics profession,” in 2011. Sandra Urie ’85, president and CEO of Cambridge Associates, was one of the students who nominated Oster.
“She is an exceptional economist, an inspiring teacher, a friend, and mentor,” Urie wrote in her nomination letter. “Many, many generations of Yale students, especially the women who have had the opportunity to learn from her, are the beneficiaries of Sharon’s exceptional teaching.”
Oster served as a “sounding board” for Urie and other women students, not only on academic and career matters, but on broader issues, such as balancing personal life and parenthood. “She was the living proof that women could do it,” Urie says, “and she helped so many of us find the way.”
Oster also mentored junior faculty members. Katherine O’Regan, professor of public policy and planning at New York University’s Wagner Graduate School of Public Service and director of the Furman Center, was on the Yale SOM faculty from 1990 to 2000.
“While it is Sharon’s friendship that I treasure most, it was her mentoring of me as a junior woman economist that stood out,” O’Regan says. “In a profession not known for generosity or public spirit, Sharon has modeled what it means to be a true colleague. She has provided the protective and productive leadership that has changed scores of junior academics’ careers. Through sage, and frank, advice on teaching, research, and office politics, Sharon has shaped all aspects of my career.”
Oster made perhaps her most profound impact on the Yale SOM curriculum when, in the late 1980s, a group of students asked for a course tailored to nonprofits that combined accounting, economics, and strategy. “I was teaching competitive strategy at the time, so we pulled some of that framework and used nonprofit cases to think about it in a new context, and then it morphed into my own course,” Oster says.
Up to that point, Oster hadn’t thought in any rigorous way about how to apply the laws of economics and strategy to the nonprofit world. The new course spurred her to new areas of research and publication. “I wrote a bunch of cases and a book and research articles about how you apply these business tools in nonprofits,” she says. “It ended up being very productive for my research career.”
Oster has made important contributions in a number of areas of economics; her book Modern Competitive Analysis is widely used, as is the book that grew out of her teaching on nonprofit strategy, Strategic Management for Nonprofit Organizations.
Oster also co-authored a book with her husband, Ray Fair, the John M. Musser Professor of Economics at Yale; their Principles of Economics, written with Karl Case, is one of the standard textbooks in the field. The couple raised their three children in the East Rock section of New Haven.
Oster’s children benefitted from the educational opportunities available in the New Haven area, and, she says, from visits with her former students. “We traveled a lot as a family when my kids were young, and wherever we went, I would contact an alum of SOM, and we’d get together to catch up,” Oster says.
The family once traveled to Turkey, where one of Oster’s former students took them out to dinner. “He talked about the political economy of Turkey,” she says. “To hear what a well-educated business person with strong social values has to say about a less-developed country—the leaders, issues of religious tensions and secularism—when your kids are 11 and 12 and are just soaking it up, is a miraculous kind of thing.”
The scenario was repeated with alumni across the globe. “I feel like I have a visa to the world, just by knowing our students,” Oster says. “And it’s personal, too. I have students who send me pictures of their new babies, who weigh in with their job news, with whatever is going on.”
Looking back, Oster calls her years at SOM “deeply gratifying,” and in ways she had never imagined. “I never thought I’d be dean of a business school, or that I would have such an impact on the lives of so many extraordinary young people,” she says. “Just the other day, I received a sort of thank-you note from a former student who just made partner at a major consulting firm. She wrote, ‘I’ve used everything you taught me.’ And that is gratifying, very gratifying.”
video: Core Ideas
Sharon Oster on applying economic principles to the nonprofit sector.