Faculty members at McMaster University’s DeGroote School of Business in Hamilton are fond of telling a story about a student who, several years ago, interrupted a professor mid-lesson with a question about something in his organizational behaviour textbook. The student had flipped ahead to chapter four and spotted a case study about an ugly battle between employees at Charles Schwab Canada and the company’s chief executive, Paul Bates. The page featured a large photo of Bates leaning over an employee’s cubicle in the middle of the discount brokerage’s Toronto offices. The student immediately recognized the face of the school’s head administrator and asked, “Hey, isn’t that the dean?”
Indeed it was. The case study, based on a 2002 Financial Post column headlined “Slick salesmanship masked discontent,” blamed Bates for the revolt at the discount brokerage—a dozen employees sent a letter to Charles Schwab’s head office warning that management of the Canadian arm was “no longer acting in the best interest of ourselves or our clients”—and suggested Bates should have been fired as a result (instead, he oversaw the sale of the brokerage firm to Scotiabank). Bates, who declined to be interviewed for this story despite repeated requests by Maclean’s, was named dean of McMaster’s business school two years later.
The revelation about Bates’s tumultuous history with Charles Schwab, and the fact it was featured in a business textbook, was awkward, to say the least. It also left several DeGroote faculty members, who had already been chafing against Bates’s leadership, with a feeling that history was about to repeat itself. They were right. DeGroote is currently being roiled by its own nasty internal divisions, with Bates again being fingered as the bad guy. In the ivory tower equivalent of a mutiny, several faculty members are speaking out against what they describe as Bates’s harsh, top-down management style. They accuse him of running the school like a corporation—not an institution of higher learning—and of bullying professors who don’t fall in line.
Facing mounting complaints, the university’s office of human rights and equity services launched an investigation and released a preliminary report in March. The publicly available report is based on interviews with Bates and 26 faculty members, as well as an examination of internal documents, postings and emails, but does not attempt to determine whether there has actually been any wrongdoing. It paints a picture of a school deeply divided—“an underlying and pervasive culture of hostility has emerged”—and lists a litany of allegations against Bates, all of them unproven, including complaints that he has run roughshod over established rules and procedures and has shown little interest in the school’s academic mission. The internal divisions have created a “dysfunctional work environment” that threatens to further deteriorate if left unchecked, according to the report, with both sides hurling allegations of harassment and discrimination.
Some faculty members say the situation has become so bad they are seriously considering leaving the school, despite their tenure.
McMaster’s response was to dust off the wheels of university bureaucracy. Under the umbrella of the university’s anti-discrimination and group conflict policies, it has assembled a three-member committee to “provide guidance” to the business school and oversee a series of investigations and mediation, as well as anti-discrimination and harassment training. The hope, presumably, is to smooth over the dispute before it does lasting damage to DeGroote’s reputation as an up-and-coming business school and casts a pall over the opening of a new, $27-million DeGroote facility in nearby Burlington, Ont., this fall. But faculty members aren’t holding their breath.
The choice of Bates to lead DeGroote raised more than a few eyebrows in early 2004. Unlike the outgoing dean, Vishwanath Baba, a Ph.D., Bates had little in the way of academic credentials. In fact, he didn’t even have a university degree. What he has is business experience. Bates reportedly got his start as a bank teller in Britain before moving to Canada in the early 1970s. He went on to head up four major brokerage firms and has sat on the boards of the Toronto Stock Exchange and the Canadian Investment Dealers Association, and has served as a part-time commissioner in the Ontario Securities Commission.
The Bay Street background, coupled with some part-time teaching experience at the University of Toronto’s Rotman School of Management, was presumably a major selling point for McMaster’s administration, who were keen on raising DeGroote’s profile and forging better links with the business community, a key source of funding for the school. Besides, it’s not unusual for business schools to tap non-academics for such positions.
In addition to fundraising, a dean who boasts accomplishments in the private sector helps attract students who value ties to the “real world.” It also helps lure those already working via pricey executive M.B.A. programs, a major cash cow for business schools. In this capacity, Bates would appear to be a perfect choice. With his short, greying beard and closely shaved hair, he is described by his former employees as a “master salesman,” the sort of person who can whip up excitement about a project or cause. He is also a natural with the media (he once hosted a call-in radio show), capable of talking knowledgeably about everything from interest rates to the pharmaceutical industry.
The strategy is not without its critics. Universities are, at the core, academic institutions responsible for education and research. So while Bates’s pledge to treat students as “customers” sounds appealing on the surface, academics argue there’s an important distinction between training someone to do a job and providing them with an education. But rarely does the tension between the two points of view escalate beyond gripe sessions in the faculty lounge.
Most DeGroote faculty members kept their opinions of Bates to themselves during his first five-year term, according to the university’s report. But when his appointment came up for renewal last year, several professors stepped forward to complain about his leadership, and requested meetings with McMaster’s president. Some even urged the selection committee to turf Bates.
The report suggests there were various reasons for the opposition, including Bates’s alleged lack of commitment to academics and a perceived shift toward a corporate management style. Some professors also alleged that Bates attempted to “sideline them by removing them from administrative functions or restructuring certain programs in order to weaken their position at the school,” according to the report. Others accused him of using “strong-arm” tactics to influence faculty votes on key issues.
It’s not all Bates-bashing at DeGroote. Some argue the source of the school’s troubles are a small group of jilted faculty members who are putting pressure on others to join their cause. His supporters, according to the report, feel empathy for Bates and suggested he has been subjected to various demeaning tactics. “Faculty members in both camps reported feeling ‘psychologically harassed’ by other faculty members,” said the report, adding that some needed to take prescription medicines for “depressions, anxiety and stress-related illnesses.” The report also suggests that there has been a 20-year history of discord at the school, long before Bates arrived.
In December 2008, McMaster’s faculty association stepped into the fray. It organized an “unprecedented,” but non-binding, referendum vote on the question of Bates’s reappointment. Forty-four of the 61 full-time faculty members cast ballots. More than 80 per cent voted against the dean. “The results were pretty dramatic,” says John Berlinsky, the faculty association’s president. And yet, the selection committee gave Bates another five-year term, which was approved by the senate and board of governors.
Now the faculty association is urging the two sides to get together and work out their differences—and fast. Berlinsky says he can’t recall such deep divisions at McMaster since he started teaching there in 1986. The stakes are particularly high, he says, because of the school’s new 90,000-sq.-foot campus in Burlington. The school will house graduate and executive programs for some 800 students. “If the school isn’t functioning,” says Berlinsky, “there’s a lot of [financial] risk to the university.”
The university seems to recognize that it has a potential disaster on its hands. “We are taking action,” said Peter George, McMaster’s president, in an April 1 address to the business school. “But the issues that need to be addressed are complex and there’s no single answer, no silver bullet, so to speak, that will put the school on a stronger path forward.” Like Bates, George declined to be interviewed. When asked whether the school is pleased with Bates’s performance, Andrea Farquhar, a McMaster spokeswoman, notes that his contract was renewed and that the school has grown considerably under his watch. “The issues that have to be tackled within the school aren’t simple and they don’t reside with one individual,” she says.
Several professors spoke to Maclean’s, but were reluctant to have their names published because they feared reprisals from students and other faculty who don’t share their views. One professor, who has been at McMaster for several decades, said it’s more than just a case of Bates and his private sector get-it-done attitude clashing with a bunch of cloistered academics. “It has a lot more to do with his conduct and him as a leader of an academic unit,” he says. “Even after being around here for five years, he still doesn’t understand how an academic institution should be governed.” The professor claimed that Bates appeared to recognize early on that he didn’t have the broad support of the faculty and quickly resorted to a system of rewarding those who were loyal to him—the report cites allegations that Bates attempted to influence tenure and promotion decisions—and marginalizing those who didn’t.
But there is another side to the story. Bates’s supporters say he has done wonders for the school. He is praised for raising DeGroote’s profile and for pushing through a difficult expansion project. Bates is also extremely well-liked by alumni and current students, several of whom have contributed to a page on Facebook, expressing their support for a man they dub “the root of DeGroote.” The Facebook page, which has garnered 1,000 supporters (DeGroote has about 2,700 students), was created by Mark Scattolon, 23. He praises the dean for promoting programs at DeGroote that offer practical experience—something he believes helps to set DeGroote apart from other business schools.
An online poll of students taken around the same time as the faculty vote showed that nearly 83 per cent of the 724 votes submitted supported Bates’s reappointment. “He has never been too busy [for students] no matter what’s going on that day,” says Evan Murray, a 22-year-old student who is co-president of the DeGroote Marketing Association. Bates also earned rave reviews as a part-time marketing instructor at U of T, where he won an outstanding teacher award in 2003.
And not everyone in the faculty sees Bates as a problem. One professor suggested that a handful of faculty members are opposed to Bates because they are resistant to change. “He has brought a lot of business aspects into the school,” said the professor, who spoke highly of Bates’s leadership but asked to remain anonymous because he was concerned about his job. “The reputation of the school has gone up dramatically over the past six years.” Bates also has the support of Michael G. DeGroote, the university’s largest donor and the man for whom the business school is named. DeGroote recently told the Hamilton Spectator that Bates is doing an “excellent job.”
Even professors in the anti-Bates camp grudgingly admit that Bates is good with students and has helped put DeGroote on the map, although they tend to dismiss the achievements as empty salesmanship. And faculty members argue that students aren’t the best judge of what’s best for the school in the long run. The new Burlington facility is an oft-cited example of a project where success will be determined long after the current batch of students has left the building. The administration has said the expansion, spearheaded by Bates, is the only way for DeGroote to grow, but the report says a majority of DeGroote’s six area chairs were initially opposed to the project because they believed the business case was unsound. There were doubts that DeGroote could attract enough executive M.B.A. students in a region with several better-known business schools: Rotman, Schulich and Ivey.
The protest proved short-lived. McMaster’s provost, Ilene Busch-Vishniac, “reportedly issued discipline letters to five out of six” of DeGroote’s area chairs following their public opposition to the expansion project, according to the report. That later resulted in grievances being filed with the faculty association, the report says, and ultimately led to the letters being removed from the professors’ employment files. As one of DeGroote’s area chairs describes it, he was “brutally intimidated” into voting for the Burlington expansion project. “Whenever I tried to blow a whistle, I was sidelined, bullied, everything.”
Berlinsky says the opposition to the project was legitimate. “I think all the business faculty that I know would be happy to have business programs like the top business schools in the country,” he says. “But with the Burlington school, our question is: where is our competitive advantage?” The clock is ticking on finding an answer to that question. Attracting enough executive M.B.A. students to fill the school won’t be easy at a time when the economy is sputtering back to life and companies are still watching their bottom line. Still, if it’s true that Bates’s greatest strength is his salesmanship, as faculty and former employees suggest, then he may well be the right man for the job. Providing, of course, that the DeGroote School of Business doesn’t tear itself apart in the process.