Choosing Harvard’s New President: MD Anderson Figured It Out First

By

Leonard Zwelling

https://www.nytimes.com/2018/02/11/us/harvard-president-bacow.html?rref=collection%2Fsectioncollection%2Fus&action=click&contentCollection=us&region=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront

The new president of Harvard University is Lawrence S. Bacow, the former president of Tufts and a top official at MIT. He now is on the faculty of the Harvard Kennedy School of Government.

In the article in the NY Times, notice is taken of Harvard’s opportunity to follow the tenure of its first female president, Drew Gilpin Faust, with another #MeToo-type choice. But Harvard went in a different direction.

Dr. Bacow is known as a skillful academic manager and leader. He is less a scholar than an academic politician capable of building consensus and dealing with the anticipated difficulties that plague elite institutions of higher learning in the Trump years. This includes a 1.4% excise tax on investment returns of the endowment. This is a considerable sum at Harvard and will necessitate some skill in dealing with the financial downside of a tax to a large endowment that will cut into the operating budget for the rest of the university. Harvard chose a skilled manager over an academic star to be its leader.

In all fairness to Dr. Pisters, so did MD Anderson and Anderson did it first.

MD Anderson’s first two presidents were indeed master politicians, particularly with regard to handling the dicey relationship MD Anderson had with the state government of Texas. By the time Dr. LeMaistre was president, as he once told me, “MD Anderson is the 800 pound gorilla.” What he meant was that Anderson had become a self-sustaining financial profit center in a university system replete with cost centers. This only grew in the Mendelsohn years as the restraints on monetary growth were stripped away when the state allowed patient self-referral to its cancer center and the money flowed in. There were times during the Mendelsohn years that the finances took a turn to the negative, but the levers of cash flow could still be managed because the faculty would rise to the occasion and increase the revenue when that was called for.

With the hiring of Ron DePinho the state of Texas doubled down on the model of having an academic star lead its cancer center with disastrous consequences.

The shortfall reached half a billion dollars. The fact that the removal of that president and his replacement with an ad interim crew of competent managers led to a righting of the financial ship of state suggested that the cash flow problem had its origins in the profligate spending of Dr. DePinho. Once that stopped, the health of the income statement improved.

It is fine to have an all-star academic lead an institution of higher learning when the cash flow is plentiful and spending is a good strategy. But when a bit of austerity is needed and some cool judgment must be in the captain’s chair, a disciplined manager may be the better choice.

Harvard seems to have gone that route. So did MD Anderson. And Anderson did it first.

Leonard Zwelling