Bringing crisis management ideas to the oldest US business school

Erika James knew that her performance as a leader would be scrutinised when she was appointed dean of the Wharton School in February. She is the first female head of oldest business school in the US, founded at the University of Pennsylvania in 1881. She is also its first African-American dean.

By the time she took up the post in July, however, the business education world faced two new challenges — the economic fallout from the coronavirus pandemic and a focus on racial justice following the Black Lives Matter protests.

When we talk over video shortly after her official start at Wharton, Ms James is very upbeat. “Actually, it has felt — and I don’t want this to be misinterpreted — invigorating,” she says about her first few days in the job.

As she points out, she’s well prepared for this moment: her academic roots lie in the research and teaching of crisis management techniques. (She co-authored a 2010 book on the subject: Leading under pressure: From Surviving to Thriving Before, During, and After a Crisis.)

“It has been an easy way for me to learn about the people with whom I am now working with very closely because we have been forced to work together in an intimate way, making hard decisions, moving quickly due to coronavirus,” she says.

Business school revenues have been hard hit during the pandemic because of their increasing reliance on income from bespoke executive education courses for corporate clients, many of which were cancelled by lockdowns. At the same time they have had to spend significant sums on technology to keep existing degree course classes running remotely during campus closures.

Wharton, however, is among the world’s most secure business schools financially and is able to be highly selective about who it accepts. It enrolled 856 MBA students last year out of 5,905 applicants. A key challenge for this school, similar to other elite MBA providers, has been to become more inclusive: last year’s MBA intake was its most gender balanced but the class was still weighted 54:46 in favour of men.

Increasing gender diversity was one of Ms James’s most notable achievements in her previous role as dean of Emory University’s Goizueta Business School. During her six years at the school’s Atlanta campus, 46 per cent of the faculty hired were women while faculty headcount overall increased by a quarter.

She was raised in Texas by a black Christian mother and white Jewish stepfather. “I grew up as an only child in a biracial marriage in the south in the 80s. At that time that family dynamic and those kinds of relationships were not well received but I think it gave me an openness to appreciate all different types of people,” she says.

“My step grandmother, although she was just my grandmother to me, referred to me as her most Jewish grandchild because I was the one most culturally engaged in her life, which was the Jewish tradition. And yet I was also raised Christian from my mother’s upbringing so I could appreciate and live in different worlds and traverse back and forth pretty easily.”

Elite institutions, such as Wharton, have faced particular criticism for a longstanding lack of diversity among students and professors. Among the US nationals starting Wharton’s full-time MBA last year — accounting for 70 per cent of the total intake — 64 per cent were white, although this was a record year for Americans of other ethnicities gaining a place on the course.

Ms James arrives at Wharton at a time of reckoning with business education’s poor record on recruiting and retaining black faculty members. While it is possible to increase the number of black professors at Wharton by hiring existing talent from other schools, the greater need is to increase the numbers of black people becoming academics, Ms James says.

“In business education we have talked the game of diversity but not prioritised it. That is a problem. Fundamentally it is about changing the [faculty] pipeline.”

She was fortunate in having been encouraged to pursue a career in academia by the faculty around her at the University of Michigan while completing her PhD in organisational psychology. In doing so, they set her on a different path from her original course — she had expected to become a consultant.

“What a PhD does is prepare students to go into academia, but because my discipline was fairly applied as an organisational psychologist there were also opportunities to go into consulting or to go into the corporate sector,” Ms James says.

“I started graduate school assuming that [consulting] was the path that I would go down but I found that I was quite curious and intrigued by the research process and that research allowed me to answer questions that I had. And I learnt to appreciate and enjoy the writing process.

During graduate school, she took some time to work for American Express in New York. “That’s when I really realised that, as exciting as it was to work in Manhattan and work for a world-renowned company, I liked having the autonomy I got being an academic, by which I mean I liked working on things I found interesting not being told what things to work on.

“I learnt pretty late in the graduate school game that I was actually being prepared [for academia],” she says. “That sealed it and the fact that my dissertation adviser, who I really really respected, encouraged me to try academia for a year and if I didn’t like it, I could go into consulting. I respected her opinion and wanted to give it a try.”

Encouraging significant numbers of black students into careers in academia will require systemic change. She notes that there is a bias towards white candidates by majority white faculty committees — the groups choosing who begins the process towards becoming a tenured professor. “It is a long game . . . we have to start 10 years prior to that, attracting and promoting research staff,” she says.

Ms James has often spoken publicly about her leadership principles and the need to “change our own self-talk”. I ask her to explain more about this and she says that it is about putting yourself forward for things that seem challenging but must be possible because others have shown they trust you to do them. “This lesson hit home for me when I started, and was teaching, a women in leadership programme,” Ms James adds.

“One of the things that was important for me to convey to this fairly senior group of women was that we often stand in our own way and don’t realise what is there for the next opportunity. We talk ourselves out of future opportunities,” she says.

“At Emory I was really forcing myself to take those leaps. I had never been a dean before and I did wonder to what extent I was being put in this role because of the visibility of being a woman or the visibility of being an African-American. Was I the diversity person they wanted?”

She is talking in her new home, close to Wharton’s Philadelphia campus, which she says she found “site unseen” through an online property broker because of lockdown restrictions.

“It was definitely a strange time to move to a new city,” she says. At one point her husband, Jimmie, a retired ExxonMobil executive pops up in the background of our call. “I would consider him my leadership guru,” Ms James says. “He ran fuels operations [at ExxonMobil] so it was a huge job and I have watched how he inspired people and his level of integrity for a very long time.”

Three questions for Erika James

Who is your leadership hero?

I have two heroes. The first is Lin-Manuel Miranda, the composer and creator of Hamilton, because of his creativity and risk taking, which are paramount in leadership. He was willing to take on something that was unheard of before, which is what I think makes really outstanding leaders. The other person is my husband.

If you were not a leader, what would you be?

I would be a journalist because I have an inquisitive nature. As an academic researcher, I am always asking questions.

What was the first leadership lesson you learnt?

Build a foundation of trust. Leaders cannot lead alone, they have to build a team, which they trust and by whom they are trusted.

This article has been amended since publication to clarify that Wharton is the oldest business school in the US, and the world’s first collegiate school of business. It is not the oldest business school in the world as we originally stated. (That is ESCP Europe, founded in Paris in 1819.)