Big Ideas, Powerful Experiences

New Dean Scott DeRue discusses a vision for Ross and a lifetime relationship with alumni
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GETTING TO KNOW SCOTT DERUE

Education: BS in business administration, University of North Carolina-Chapel Hill; PhD in management, Michigan State University.

Awards: Top 50 Most Influential Business Professors,MBARankings.net; Early Career Achievement Award, HR Division of the Academy of Management; Executive Education Teaching Impact Award, Stephen M. Ross School of Business.

Family:  My beautiful wife, Kathy. My chocolate lab, Oki. And the cat we saved from the streets of Georgia, Tyson.

Favorite Transport:  Mizuno Waverider (running shoes).

Favorite Author:  Michael Lewis.

Favorite Dish:  Grilled fish w/mango salsa.

Favorite Movie:  "The Endless Summer," 1966.

Most Influential Person in Life: Suzanne DeRue — my mom — she taught me the values that still guide me today.

Most Admired Figure in Business: Yvon Chouinard, founder and CEO of Patagonia. He has built a company with exceptional financial success, strong community engagement, and a culture and workplace where individuals thrive. But even more impressive, he has been able to keep the company's core values at the center of the organization through all stages of growth, which is remarkable in today's modern business environment.

Most Admired Figure in Education:  John Dewey.

Guilty Pleasure:  Blank Slate Ice Cream, Ann Arbor.

BY BOB NEEDHAM

Scott DeRue often talks about how business school changed his life. It was the first time he realized that business could be the most powerful force for change in the world.

As an undergraduate business major at The University of North Carolina, he discovered a world of new possibilities. He started out by pursuing those possibilities in the business world, working at the Monitor Group in consulting and private equity. Through this experience, he came to realize that his real interests lay in teaching business and helping others discover their own potential and world of possibilities.

He earned a PhD at Michigan State and joined the Michigan Ross faculty in 2007. Leadership roles followed: He became director of the Sanger Leadership Center, faculty director of the Emerging Leaders Program, and associate dean for Executive Education. An authority on leadership and management, DeRue is considered one of the world's most influential business professors and is often featured in media the world over.

This summer, DeRue, 39, became the ninth dean of Michigan Ross. DeRue has already made clear some priorities for his term, including:

  • Cultivating big ideas that shape the future of business.
  • Strengthening Ross' position as the leader in experience-driven business education.
  • Setting the standard for lifelong learning and alumni engagement.

In between trips to meet with alumni and prospective students in London and New York, DeRue made time to sit down and answer a few questions for Dividend readers.

The Michigan Ross mission statement reads, "We develop leaders who make a positive difference in the world." What does that mean to you personally, and do you see it evolving or changing at all in the coming years?

Scott DeRue: When I look at what's happening around the world today, I see economic and market volatility, political and social unrest, and a job market that leaves many on the sidelines. In the context of this uncertainty and unrest, we see people around the world blaming business. In my opinion, business is the answer, not the problem.

I believe that business is the most powerful force for positive change and the path to greater economic prosperity and social mobility for more people. Governments certainly can't do it on their own; competing and often personal interests create stalemates. Nonprofits can't do it alone; resources are too diffuse. To me, the private sector, and business in particular, plays a critical role in creating the world we aspire to and the positive change we need.

I think about companies like TOMS, founded in 2006, which today has built a collection of businesses that are not only profitable but also serving important needs in society — from poverty, to eyesight, to maternal health. I think about companies like Alphabet, better known as Google. This is a company that was founded to make information universally accessible and useful — that built one of the world's most foremost search engines — and today is building businesses that are innovating how we communicate, how we drive, and how we work. I think about companies like Johnson and Johnson, which developed a drug for tuberculosis and, despite limited market potential, found a way to profitably work with international governments, doctors, and other partners to distribute the drug to those who need it most. These are examples of how business is changing our world in fundamental ways. Creating products and services that offer innovative solutions to real problems. Building workplaces where people are inspired by the impact of their work. And businesses that are enabling us to live more enriched and prosperous lives.

Business is more than economics. For me, there is a deep sense of purpose and an aspirational sense of mission in business. To thrive long term and maximize the positive impact on society, businesses must make money. But the economics are a means to an end, and that end is the real and positive impact that business can have on our world.

Our mission statement at Michigan Ross reflects our responsibility to develop the next generation of leaders who understand how to use business to create jobs and greater economic prosperity, enable social change that serves the full spectrum of society, and cultivate greater community engagement. Personally, I have never felt a stronger sense of purpose in life. Michigan Ross is shaping the future of business in society.


The State of Business

That leads into the next question, which is about the state of business in the world today. There is a lot of hot political rhetoric, and emotions are running high. How would you assess the state of business generally?

Scott DeRue: Business is strong and resolute. The political rhetoric that dominates the public discourse is, in my opinion, unproductive and a sad statement of current affairs. The political landscape has become so polarized that business has become a common enemy. In U.S. politics, for example, one party wants to blame business for the world's social ills; the other party blames global markets and wants to build a wall around the U.S. to limit global trade. Neither is true or smart.

Look around the world at regions that are healthy, productive, and thriving. You will find business creating progress: for example, investments into our communities, the flow of goods and services across borders, and job growth. Without the private sector investing in people, technology, and new businesses, our communities stagnate and fall behind. For our communities to thrive, business must be strong and resolute. Personally, I think the state of business is in a much better place and has a much more positive impact on society than we give it credit for.

Everybody today seems to want to talk about the unethical behavior in corporate America and companies dodging taxes and reincorporating overseas. And you pile on top of that more rhetoric about how U.S. companies are un-American if they're moving business outside of the country. The fact is, however, that those global organizations create more value for the United States on the whole than they take away. Additionally, there is a great opportunity for government to construct better policy that will motivate companies to make more investments in the U.S., whether it is a U.S. company or a foreign-owned company. But policy-makers have to first accept that business is part of the solution, not the enemy.

There's a big debate about how accountable businesses and companies are to their communities; volatile headlines when firms move jobs or reincorporate abroad. Accountability to the U.S. and to communities is a big part of the Bernie Sanders phenomenon this year, and even a key part of Donald Trump's support. How do you see it?

Scott DeRue:  This is where I disagree with those folks, because they're trying to buy votes, in my opinion, with highly emotionally charged rhetoric.

The idea of reincorporating in a different part of the world to save tax money is not illegal if you do it according to the law. Of course, we can debate the morality of it, but we live in a global society, and companies have customers all over the world. Let's not forget that General Motors, for example, sells more vehicles most years overseas than it does in the U.S. Technology companies such as Google and Facebook — or the entire fintech industry — are looking to global markets for growth. And these companies are free to move wherever they want as long as they are compliant.

Why do we look at the company and say, "That company is bad" or "The people running the company are bad"? Why don't we look at ourselves and say, "How do we make it more competitive so they want to stay in the U.S. and invest more money here and headquarter here?" rather than looking to find ways to punish companies for doing what makes sense for their businesses.

Right. That is the flipside. Part of the reason that they're moving away is the gridlock in Washington that has prevented solutions from being created.

Scott DeRue: Washington is certainly part of the reason, though I would argue that our state and local governments have earned their share of responsibility as well. The easy scapegoat is business. What we need to do is take a step back and ask, "Why are those businesses engaging in that behavior?" They're doing what they believe is best for their business – whether it's pure economics, access to talent, or access to a political sphere that is not corrosive. It's doing good business, earning a fair return, and employing great people, whatever the case may be. I know it's painful to a community when a plant or corporate headquarters is lost. My family has felt this pain too. Foreign competition decimated the furniture industry in North Carolina. But blaming a company for making a move that is best for its long-range prospects isn't fair or smart.

Those business leaders are entrusted by their shareholders, by their employees, to do what's in the best interest of that organization. And if we, for example, in the United States, cannot create an environment where it's attractive to do business, they're going to leave.

We must create an environment where reasonable people can sit down at the table and come up with reasonable solutions for how to create a friendly and attractive market for businesses to operate — both within the United States and beyond.

So how can Ross get more involved in those debates, if you even think that we should?

Scott DeRue: We should be at the table for those debates. We have at Ross some of the world's foremost thought leaders on topics such as global trade, markets, competitive strategy, and talent. We can and should be driving these important conversations. How can we create the economic infrastructure that best enables businesses to grow from startups to mature organizations? How can we organize the pipeline of talent from investments in early education to higher education and beyond, to lifelong education?

We have a point of view on how you build robust talent pipelines for businesses around the globe. So whether it's the economic infrastructure, the people and the human capital infrastructure, or the distinct point of view on how we do business across different boundaries — national borders or otherwise —  we have a point of view to share that is robust, distinctive, and productive. And as a university, hopefully we can also create a safe environment for companies and policy-makers to come together and find solutions. Getting the discussion out of Washington and into Ann Arbor, or our university settings abroad, might be very helpful to the debate. Not only do we need to be at the table for business leaders and political leaders, but perhaps we can provide the table itself.


Change and Opportunity

You've talked about how your own experience in business school was a transformational experience in your life. Could you explain how that played out for you and how you hope it will play out for students coming to Ross?

Scott DeRue:  I was raised in a community where higher education is the exception, not the norm. For me, earning my undergraduate degree was a hugely transformational experience.

Not only did I learn the fundamentals of business and the role that business plays in society, but I saw possibilities of what I could do in the world through business and through business education — to make a difference in the world, and to create opportunities for others. There is no greater tool for creating change and opportunity than through business. That's the perspective I hope our students come to appreciate.

What possibilities did you see, and how did that B-school education bring that to life?

Scott DeRue:  One of the most transformational experiences for me was having the opportunity to interact with and learn from people from around the world. Being able to listen to and understand their experiences and their backgrounds was exciting and eye opening. It still is for me. When I meet a student who is from another part of the country, or the world, a place I have never been, my curiosity lights up. I want to know more. And it is this diversity that enables us to develop global citizens who will challenge the present and enrich our future.

I also had the opportunity to do some early-stage research with a faculty member at UNC, where I got to see how you could engage with companies to try and solve real problems. In my case, it was about how a company selects, hires, and retains people that really fit with its culture.

So we did some early research on that topic. I got to see the evolution of the ideas and just how impactful those ideas ultimately became to help HR professionals and business leaders around the world improve their talent pipelines. That research to this day is some of the most impactful research on what we call "person-organization fit," and that started for me as an undergraduate doing work with a professor.


Making A Lifelong Commitment

You've already helped to position Ross as a leader in lifelong education with your role in creating the Alumni Advantage program. What are your goals for that program?

Scott DeRue: With Alumni Advantage, our goal is to be a lifetime partner in the success of our graduates. Whatever the educational needs of alumni might be – executive education, certification, or networking – we want to be a lifelong resource and partner.

The Alumni Advantage program redefines the value of the Ross degree. So now, when you invest in Ross — you come here to get your undergraduate or master's degree — you now have access to lifetime support in resources that are going to be designed to meet needs that you have at different points in your career. What school would ever offer lifetime, tuition-free access to its executive education portfolio for alumni? Ross would and has, and we're the only school in the world willing to make this commitment to our alumni.

What might be coming in the future for Alumni Advantage?

Scott DeRue:  Our alumni are eager to engage with the school and university on ideas that matter and are shaping important events in the world. They want us to come to them, hold events that bring them together, small or large, feed and hydrate their minds, and have a thought leader who's there to share ideas and provoke conversation. This is the key for Alumni Advantage: to be your lifetime partner in your personal and professional success. Going forward, I envision engaging our alumni in important conversations about the world, and using these platforms to stimulate innovation that finds its way back into the student experience at Ross.

One of the big things happening at the school recently, of course, is the construction project, the building of Jeff T. Blau Hall and renovation of Kresge Hall. (See related story) Why was this such an important investment to make at this particular time in Michigan Ross' existence, and how is it going to improve the experience for Ross students?

Scott DeRue:  Our physical space is critical to enabling us to develop and deliver truly transformational experiences for our students. The Blau Hall building and the renovation of Kresge Hall will create spaces for students to engage with each other, and with our faculty and staff in ways that they've never been able to do before.

For example, we are really proud of the co-working and the innovation spaces where our students will be able to come together in project teams working on real business problems, either for their classes or outside of class, and their startups. They now have unique spaces to come and co-create together in an open and innovative way.

Another example is our Center for Centers. At Ross, we have some of the world's best institutes focused on subjects like entrepreneurship, leadership development, sustainability, social impact, global operations, and a number of other topics. Now, most of those centers will be physically located together, giving us more opportunity to create and share knowledge, share insights, and collaborate on projects to develop impactful ideas.

Our physical space enables us to create and deliver student experiences that we weren't able to before, and it's due to the generosity of people like Steve Ross, Jeff Blau, and many others that we have the opportunity to create this truly transformational space for the Michigan Ross community.

Do you think the project brings us even with our peer schools in terms of facilities, or does it move us beyond them?

Scott DeRue:  Our physical space is world class. I travel the world and routinely visit other business schools, and I have yet to encounter a campus as impressive as our own. We have not only one of the most modern and attractive facilities in the world, but the space has been created for collaboration and designed to accelerate ideas and bring them to market. It's a very open and collaborative space, and that space is — in my opinion — the best in the world for business education.

This physical space will enable us to attract the best and the brightest students. It will enable us to attract world-class faculty and exceptional staff who want to come and be a part of the Michigan Ross community. In business education, our people are our most important resource. So, to the extent our physical space enables us to attract the best talent — students, faculty, and staff — then that physical space is on the critical path to becoming the best business school in the world. Ann Arbor has been rated the best college town in America, and we have also been recognized as being the most educated town in America. Our space at Ross, which is a hub for the whole campus, reflects those identities.

If you visit the Davidson Winter Garden during the school year at about nine o'clock at night — it's fascinating. The place is buzzing with students from across the entire campus, not just Ross. Students from across campus want to come here to study and work with each other, and at the end of the day, higher education and business education is about bringing people together to learn from one another and to co-create with each other. Our physical space enables that to happen.

You've already started traveling to meet with alumni; do you expect to be doing a lot of that?

Scott DeRue:  I will be on the road extensively, around the world, traveling to our major hubs where we attract students and where our alumni choose to live, work, and play. For me personally, having the opportunity to engage with our prospective students, alumni, and corporate partners is one of luxuries of this job. I get the opportunity to engage with people every day who love the University of Michigan and the Ross School of Business. It doesn't get any better than that.

How will upcoming events be communicated to alumni?

Scott DeRue:  The best thing people can do is engage with their local Michigan Ross alumni clubs around the world. They are the prime points of contact to create events and engage with the school. In addition, the Alumni Advantage webpage offers a great deal of information on ways alumni can engage with the school, and we will be adding more to it over time. You can also engage with me on Twitter (@scottderue), where I routinely share news about our school and celebrate our people.

And if alumni want to reach out to you personally with a question or concern, are you open to that? And if so, in what format?

Scott DeRue:  I recently sent my personal email (dsderue@umich.edu) to every single alum in an introductory note. People can email me or engage with me on social media. I am excited and eager to hear from you.

Engaging with our alumni makes me proud to be a part of Michigan Ross because our alumni are doing amazing things around the world. Having the opportunity to engage with them, hear their stories, and hear the impact that Michigan Ross had on their life, is inspiring for me. And then I can bring those stories back and share those with our current students, which helps them see possibilities that they may not otherwise see.

I would encourage everyone when I visit your town to come out and engage with me. I want to build those relationships; I want to learn from our alumni; and I want to celebrate Michigan Ross with you. Go Blue!


Life, Adventure, and Taking Risks

On a more personal note, a lot of people reading this probably won't know what a big adventurer and outdoorsman you are, active in mountain climbing and water sports. What is it that appeals to you about adventure and the outdoors?

Scott DeRue:  I love to challenge myself, and I love venturing into the unknown. Whether it's going to a new city and running and getting lost and finding my way back to my hotel, which is pretty common, or climbing the world's tallest mountains. For me, it's about living a life of adventure and exploration — personally and professionally. With mountaineering, it is also about working with other people to accomplish something really aspirational and really challenging. I love being part of a team.

How does that fit in with your attitude about taking risks?

Scott DeRue:  I've never been afraid of risk. I'm smart about the risks I take and I make sure I'm prepared and thoughtful, but without risk, we're not growing and we're not pushing our limits.

Think about people who achieve amazing accomplishments, whether it be in business or otherwise. In all cases, those people embraced risk and ventured into the unknown.

Have you ever found yourself just staring at fear, when you got yourself into a spot where the fear was almost overwhelming?

Scott DeRue: It's OK to experience fear. If you're not afraid, you're not stretching yourself. The important thing is how you respond to that fear. Does it paralyze you? Or do you embrace it and act on it? I always choose the latter. I ask myself: Did I prepare and have I controlled what I can control? If the answer is yes, I accept that I cannot control what I cannot control, and I embrace my own fears and move forward.

Are you a leader on a mountain climb, or more of a team member/follower? 

Scott DeRue:  Mountaineering, like life, requires, at various points, all of us to lead. You may or may not have a formal leader, but leadership is not a title. We all know people who have fancy titles but are not leaders. Leadership is a behavior that anyone can step up and engage in.

In mountaineering, there are times when I'm leading and there are times when I'm following. And honestly, the same is true in business, the same is true in higher ed, and the same is true with the Ross School of Business. My job here at Ross is to surround myself with really talented people and empower them to lead. In many cases, I will be following their lead. In other cases, I'll be the one leading and setting our course. As dean, leadership for me is about hiring great people, ensuring we share a common vision and core values,  and empowering our people to work together to achieve our vision. In that process, I will lead and I will follow.