October 11, 2010
Dear SOM Graduates:
As we are preparing this issue of the Yale School of Management's alumni enewsletter, I am preparing to head off to East Asia ó with stops in Shanghai, Hong Kong, Singapore, and Seoul ó to visit with alumni and friends of the school. This will be my second, and probably my final trip to China as dean of SOM.
There are a number of "final" deaning activities I have undertaken recently, not the least being my welcome address to the Class of 2012. Just as I am getting really good at giving these kinds of speeches, opportunities for giving them are dwindling. But I thought you might find some of the things I touched on in this particular speech to be of interest, so Iím repeating them here:
"The Class of 2012 is a special class. You will begin with one dean, and end with another. You may not realize yet what a terrific deal this two-dean business is.
"One of the fundamental principles of economics is the law of diminishing returns. The more you have of something, the less benefit you get from the incremental unit. And so it is that by the time you have spent several months with me, and the value you are extracting from my deaning is close to zero, you will be getting a terrific new dean in the person of Ted Snyder. Financial theory also tells us the value of the multiple dean proposition, given that one of the fundamental principles of investing is the value of diversification. In this respect, the Class of 2012 has lucked out.
"It is true that in the last few years, business has gotten some pretty bad press. From the complaints about AIG and the banks to Bernie Madoff and BPís recent problems, it has been hard to find anyone very positive about the state of modern management. As the dean of a business school that since its beginning has believed in the value of a business education as a catalyst for helping young men and women improve society, I believe that in the long run we will once again be able to appreciate the merits of a well-put-together business education.
"Think about the many new products we have in our society that improve our lives ó from the iPad, to cutting-edge medical devices, to charter school education. To create these products and services required not only creative ideas, but also managerial talent. Well-trained managers help companies design their operations to produce goods as efficiently as possible, help ensure that products are designed to fit peopleís needs, and help determine how to obtain capital to support these products.
"When we teach you here at SOM, the creation of value for the consumer and the investor in our society is always front and center in the curriculum. While we know that there are times in a market when a business can make money by cutting corners or engaging in trickery, we fundamentally believe that managing with integrity and focus on value created is in the long run both the right and the smart thing to do. I believe it is this mission that has brought you here to our community."
Itís too early to say whether members of the Class of 2012 will come up to me at a future SOM alumni reunion to remind me of this speech, just as so many of my former students reminded me of conversations and class discussions when they came back to campus for their reunions last month. But whether or not they remember my specific words, I know that this current first-year class is destined to one day join a Yale SOM alumni community that holds tightly to the principles and ideas I expressed.
Sharon M. Oster
Dean and Frederic D. Wolfe Professor of Management and Entrepreneurship