MIT Profiles

Dana Mead
The view from 30,000 feet

Dana G. Mead was named Chairman of the Corporation of the Massachusetts Institute of Technology in July 2003. He has been a Corporation member since 1996, and has served on numerous committees. He received his doctorate in Political Science from MIT in 1967. Mead was chairman and chief executive officer of Tenneco Inc. from May of 1994 to November of 1999 when he retired. He serves on the Board of Directors of Pfizer Inc. (New York, NY) and Zurich Financial Services (Zurich, Switzerland).

The following interview with Dana Mead (DM) by the Faculty Newsletter (FNL) took place in two parts and was completed early this year.

FNL: Perhaps the simplest thing to start off with is: What do you view as the major challenges facing the Institute in the coming year and maybe over the next five years?

DM: First, you have to remember the perspective from which I look at things. I'm kind of looking at them from 30,000 feet, although I get exposed to a large number of issues here. So looking at it from that standpoint there are a couple things I think that we really need to get done in the next year. One is President Hockfield has to finish getting her team on board. We need a new vice president for development; Barbara Stowe did a tremendous job but has retired. It's a very hard job to fill and we don't have a lot of time. [Ed. Note: As this article went to press it was announced that Jeffrey Newton will be MIT's new Vice President for Resource Development.] MIT has to generate between $250 million - $300 million annually to keep our heads above water and to continue our present level of research and educational activity. Then there’s the newly created position of Executive Vice President for Finance and Treasurer – basically the CFO or VP of Finance. That's a critical one because that's where the budget is developed and also where the debt structure is managed. Sherwin Greenblatt has done a tremendous job on a short-term basis, and it’s an absolutely critical job. In November it was announced that Theresa Stone would be MIT's next Executive Vice President and Treasurer. And we learned in December that Alison Alden had been hired as the next Vice President for Human Resources, and that R. Gregory Morgan would serve as MIT's general counsel, or chief counsel, our head lawyer.

FNL: There’s been some concern expressed about the idea of a chief counsel.

DM: There has been a bit of reaction to that, the thinking being that somehow we're going to get more legalistic and consequently more bureaucratic and less flexible. But that isn't the case at all. It's just that we've had a very, very talented, skilled group of lawyers at what you could call the first tier, who have successfully moved us through some difficult situations, but we've never had someone in the counsel's job who basically was both the focal point of all of our legal activity and who also could serve as a key advisor; and that's a vital part of this job, a senior advisor to the president. And I don't want to ignore the importance of the position of VP of Human Resources. From the operation of the Institute in support of our departments, laboratories, and faculty, having a good human resources operation is absolutely critical.

FNL: Don't underestimate the faculty interest in that position. We remember the former VP of HR as the person who tried to close us down over Christmas and New Year's, which did not show the greatest understanding of how MIT works.

DM: So team building is a big challenge. That's on the president's plate and it's time consuming. One point here is very important, and that is that we're not going to settle for just anyone. We're out looking for the absolute top people to fill the jobs. Last spring we hired a CIO (now called the President of the Investment Management Company), Seth Alexander, who has proven to be a terrific hire. He's brought new insight, and he's brought a new set of perspectives to this whole business of investing. We've also simplified the organization. There was always confusion because we had the treasury functions commingled with the investment functions. This was the result of having a highly talented person, Allan Bufferd, serving as both the CIO and the Treasurer. We spent a year-and-a-half pulling those apart, so the investment management company has one mission, to invest. The other functions are under the umbrella of the Executive Vice President for Finance and Treasurer.

FNL: How important, in your view, is the past experience these people may have had at academic institutions and their ability to function in our environment?

DM: Understanding this is very important. In fact, if you had to arrange the selection criteria, it's probably number two as an important criterion. Number one is the capability of the individual, combined with a proven track record of achieving results. We need someone who understands that this is a unique environment. For example, we've had serious discussions about the difference in raising money for a research and educational institution vis-à-vis a not-for-profit of another kind or a foundation, to assure that our recruiting efforts for the development job would be informed and have sharp focus.

FNL: To what extent is the faculty viewed as being important to successful fundraising?

DM: I would say it's a key part of the fundraising. I've been involved in many MIT On The Road alumnimeetings, which are really faculty shows. The faculty presentations are the core of those meetings. I've been to the Industrial Liaison faculty presentations in Tokyo and I've been to Singapore with faculty. Without faculty, these meetings would not succeed.

I think faculty, not just as individuals but in the broader substantive aspect of what they present, are absolutely key to raising money, because people want to see what their money is doing, and how it's going to contribute to the success of the Institute, of individual departments, and to science and the nation.

The faculty working where the rubber meets the road are the ones who bring real credibility to the MIT story. But I'll tell you one place where I think the faculty could do more. The interaction of the faculty with the Visiting Committees is key to maintaining enthusiasm and commitment to the Institute among those who will directly and indirectly raise a lot of money for MIT. I think many of our departments, labs, and centers can do a better job of assuring that faculty interact across a broad range of activity with the Visiting Committees.

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FNL: How do you measure a good job?

DM: One is just showing up and participating. For example, when the Visiting Committee meets with tenured faculty and only three people show up in a department, that doesn't show much interest in what the Corporation's trying to do for that department or the Institute. It may even be a broader reflection upon the faculty's willingness to share its ideas, concerns and vision for that department. This is now an isolated example, but it makes the point.

FNL: [Special Assistant to the Chancellor] Jay Keyser runs a very interesting series called random faculty dinners. You should attend some time. Often one finds very disgruntled faculty members willing to speak up in this environment. Among the items mentioned are what the faculty have lost over the years: the $800 per year travel allowance; much better support of graduate students via tuition remission; the loss of health benefits following retirement (which have been diminished substantially); and these decisions seem to be made by a small group of administrators. It's true there is some faculty input, but faculty members never really hear about many of these “smoke-filled room” decisions until it's a done deal.

DM: I don't think much of this is done in the proverbial smoke-filled room. President Hockfield has worked to air out and broaden the decision-making process. We have talked a lot more publicly about the Institute's finances and the finance process. But you asked earlier about what's facing us. Short term I think we've got to get this team on board and functioning smoothly. I think the second thing is to assure that, going forward, we're continuing to be financially stable and growing.

FNL: There doesn't seem to be a good connect between the financial management structure and the true expenditures down the line. The department heads come into the position completely untrained to deal with the financial aspects of the job, so basically they have to rely on their administrative officers, because they have the institutional memory.

DM: I've often said that we should consider having a "boot camp" for new department heads to provide them with better background for managing their departments.

FNL: Can you be more specific?

DM: Well, for Visiting Committee chairmen who are all Corporation members, I started what we call boot camp, actually a briefing set that deals with issues common to nearly all VCs; I have it once a year. We have it after the Corporation meeting in October. This initially was put together for new Visiting Committee chairmen, so they could put into context what they heard from the departments during the VC visits. We cover financing; we talk about space, recruiting, and we outline the approach the Visiting Committee should take as an oversight body rather than a management body, which is something I have to keep in mind too. My mission is to observe, to comment, and I can help initiate programs that will assist the president, the faculty, and the people who run the place in doing their jobs better. But I don't have a direct lever into the management, and I'm not supposed to have it.

FNL: Here’s a question that might engender a sound bite or two in terms of this interview. When Susan was just coming in she made a comment that she didn’t see why a place like MIT, which was widely viewed as the national science university, shouldn’t be pulling in significant support from sources in the private sector very different from those that normally support our programs. Should we not be competing for the same individuals who are supporting Yale, Princeton, Harvard, Stanford, and other institutions, people trained in business schools and non-science departments? What do you think of that? Do you think that’s a realistic goal? Is the Corporation or our fundraising people making any efforts in that direction?

DM: I think Susan is exactly right. I happen to agree with the sentiment. We know generally why this has occurred, and that a huge amount of MIT's effort goes to basic research and basic discovery. Corporations over the last two decades have moved away from that to “How does this apply to the next round of engine development?” or “How does this apply to the next round of avionics that are going to go into those warplanes?” and so forth.

And the boards in corporate America have been very tough on management investing in research if they can't explain how it contributes to the bottom line that year or the next year.

FNL: That's the point. They want a three-year timeline for what is really a 10-year timeline.

DM: Right. And so getting by that is a very long-term effort. I don't think it's impossible. I sit on the Pfizer board and the company spends nearly $8 billion per year on research and development. I think that because the costs are so high in corporate America to do this kind of research that one can begin to make a strong case that there should be more support of university research, particularly on the discovery end. And we're beginning to see it: Novartis is here and Pfizer now has this unit nearby, as well as others. On the harder side are automotives, aircraft, and so forth. But I think we need a full-court press on this challenge, and frankly when we look at the Corporation membership this is something we consider. We want people who understand the value of MIT to the business world and to businesses at large so they can support our research and educational efforts.

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FNL: What's the foreign composition of the Corporation?

DM: It's very small.

FNL: And should it be higher?

DM: Yes, it should be.

FNL: Are there Asian members?

DM: Yes, but that's the only meaningful foreign membership. We don't have any European representation on the board right now. We do have members from Taiwan and Hong Kong.

FNL: Anybody from mainland China?

DM: No. That will be next. And as an example of how important these members can be, we have a prominent Taiwanese Corporation member who runs the largest chip maker in the world. He's great for MIT out there. We expect to put a prominent Singaporean on the Corporation in the near future. And as for Japan – I've already mentioned the value of the faculty in establishing relationships and raising money there. The Industrial Liaison Program in Japan has also been incredible. And these relationships make recruiting for the Corporation in Japan easier. But in Europe we're weak. I have spent a lot of time with the French recently because they want to create their own "MIT.” You've probably heard this dream they have, and I've been trying to convince them that it took us from 1861 to this point to get where we are. Still we do need more international representation.

FNL: What about all the international alliances and programs that we are forming? There’s the SMART Center in Singapore and these other relationships. It seems we need to assess the benefits, costs, risks, the amount of influence that governments of different nations might have on our research – issues similar to the ones we discussed earlier when dealing with corporations.

DM: I really can only speak for myself there because we haven't really discussed this particular issue at the Corporation meetings. But I think the general view, and it certainly is mine also, is that it's wise for us to take a more active role in these international areas, but with a few caveats: that they do not become a burden to our faculty, that the resources are there, that they meet MIT's high academic and research standards, and that we understand where it's all going to end up. In other words, an end game, if necessary.

FNL: There is some concern among the faculty that the intellectual integrity of the program does not live up to the intellectual integrity of our own internal programs. And to some extent some of these programs have been brought on at a relatively high level administrative/faculty structure – provost, department heads, etc., and not necessarily reflective of what the faculty would support.

DM: What leads to this concern?

FNL: The nature of the applicants, participants, whether they would be admissible under our normal criteria of excellence.

DM: Are you talking about the Research Center or are you talking about the educational side?

FNL: The educational piece of it.

DM: As far as the Research Center, someone asked me how could Singapore support a research center of the quality that MIT is going to expect, and demand. I said, well a place with four million people isn't going to be able to do that by itself, no matter how hard they try. But that isn't their idea. As I understand it, their idea is that they'll attract much of the top intellectual talent in South Asia, China, and Southeast Asia, to this center by virtue of MIT's involvement there. Researchers from those areas will want to come and work with the really outstanding people that we envision are going to go there from MIT.

FNL: And what's in it for us?

DM: Well, we get 10 chairs basically, over an extended period, and we get an important presence in Southeast Asia, I mean a big one, which we don't have. The educational part there now is nice; but that's not putting the core capability of MIT into Asia. The other part of our core is research, collaborative research, on the very highest level of excellence.

FNL: For example, there were significant issues with the Cambridge/MIT initiative.

DM: I heard there were. What are you thinking of?

FNL: Well, many faculty taught the Cambridge students when this first came about. The whole thing was put into place with insufficient consultation with the departments, and the same was true of our colleagues over in England.

DM: They weren't consulted?

FNL: Some weren’t, and they wrote and said, well, let’s get things going. The students they sent were first-rate, but the programmatic aspect was lacking. So the big question is, to what extent do we want top-down programmatic situations being run on the research side and the educational side driving the way we do business, as opposed to bottom-up? That’s the question.

DM: I think you know the answer to that question, but the execution is where the problem lies. When these ideas get introduced, frequently they are from the top level. A lot of them could come out of the bottom but they probably don't. But once they start being developed then that's when the consultation ought to be done with the people that actually execute the program, and basically that's the faculty. So I don't have a quarrel with your basic concept, because collaboration at all levels in development of the program is the best way to be sure we get the execution right.

FNL: What does the Corporation think of the faculty age profile? Do they worry about it? There was a faculty retirement initiative several years ago.

DM: Yes, an early retirement program. Each Visiting Committee looks at the faculty profile. As you know it varies a lot by department; some have profiles older than others. The Corporation reviews this in reports from the Visiting Committees. In many cases the discussion reflects what the department head thinks about the age distribution and the various ways of addressing it, if necessary. It certainly is something we need to follow.

FNL: Perhaps we’re due for another early retirement program. The argument against it is that faculty wouldn’t retire but just wait in anticipation of another program. But it would be quite important to the Corporation, wouldn’t it?

DM: Absolutely. In my experience in corporate life and not-for-profits, I find these things are cyclical. You go through this cycle: first you build up a chronological “bow wave” that results in a special early retirement program which relieves the problem, and then over time you create a new "bow wave" and so on. I don't see that we're there yet, but I could be wrong. So between you and me I haven't heard any rumblings in the administration about it. But we do hear about it in the Visiting Committee reports, and as I say some departments talk about it more than others.

FNL: Anything you'd like to say that we haven't brought up?

DM: I liked the article about the Corporation that was in last May’s Newsletter. Each year when we bring in new members of the Corporation we have an orientation for them. The required reading is the Faculty Newsletter on how the Corporation works.

FNL: Thank you very much for your time.

DM: It was my pleasure.

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