A conversation with the Dean of the Kellogg School of Management at Northwestern University.

Question: Why did it take so long for a woman to be a top business school dean?

Sally Blount: I never thought of myself as one of the first wave of women, much of my career I thought that I’d sort of been following in the women who had went ahead of me and blazing the trails that made it possible to do what I have done. And this really is the first point in my life where I’ve gotten to be the first woman.

I think a lot of the reason it happened has a lot to do with who Kellogg is. It has a lot to do also with the state of where business education has gotten to. Right now, women students come up to me and women from many different areas come up and say, “How did you get to be Dean of Kellogg.” And I said, well don’t follow my model, it was the wrong one. Right? A) I was a woman, B) I was a social psychologist rather than an economist, and C) I'd just spent six years in undergraduate business education. And none of those have tended to be the power alleys.

And yet what I think it tell us, the fact that Kellogg was ready to appoint a woman in a top business school was, is that the world has changed a lot. There’s a much deeper appreciation of psychology in business school environments in addition to economics. That’s something I knew was important when I made the choice to study psychology years ago. But I think the world has certainly embraced that view more so.

Question: How can business schools attract more women?

Sally Blount: It’s an interesting thing that when you look at graduate schools of business, about 30% to 35% of the students tend to be women—and this is true at all top business schools, through every sort of sector of the business school education domain. Whereas, if you look at law schools and you look at medical schools, they tend to be about 50% women. And the feeder undergraduate programs at colleges and research universities are now, most of them are at least 50% women, if not more.

This persistent fact that business schools are lower is an interesting question and people are just beginning to get some data around it. I recently read a study done by the Simmons College and School of Business and it’s, finding there are negative attitudes towards business in women in the high school and the junior years and I think that may be part of explaining why there are not as many women are going to graduate schools of business.

I still think it’s a perplexing question though because business is such a dominant institution in our society and so many people are drawn to it. It’s the most popular undergraduate major in the country. So while I see the negative business attitudes piece, you know, I keep wondering, is that the whole answer. It’s important data.

It’s the cheapest degree; it’s only two years rather than three, four or five. So it truly is a perplexing question. Part of it I wonder is if we haven’t misrepresented in some ways what you learn at business school.

To me, the greatest skill that you learn is how to build effective organizations. You learn about the markets and how they work, but you learn how to build effective organizations, which is how we, as human beings, organize, which is how we get things done. And I think if we did a better job at explaining to people that that’s what it’s about, I think that more women would be drawn to it because women naturally organize—in their communities in our families, in
our churches, and you know, in all sorts of domains.

And I can’t help wondering if we need to get more enlightened language so people truly understand that business school really is about building effective organizations within a market context. But it can also be in a not-for-profit context, or a religious context.

Question: Why are there so few women in business?

Sally Blount: I think it’s just a question of time, quite honestly, in terms to the unique challenges to women. We’ve broken the glass ceilings now in many places. Not maybe at high numbers as some people would have hoped, but we’ve done it. It’s interesting that we broke the glass ceiling of Harvard before we did over major business school, for example. Right? We’ve broken the glass ceilings of a lot of Fortune 500 companies. I recently had the privilege of being asked to go to the Fortune Most Power Women Summit. It was in Washington D.C. this past fall. And the room was just packed with these incredibly talented women. And I looked around and I found myself intimidated and I realize people are intimidated by what I’ve done.

I mean, I think that we’re doing it; it’s a question of choices for women because it does require tradeoffs. You don't get to have it all. You can’t have a perfect marriage, perfect kids, a perfect job and be in perfect shape physically. And I think it’s a question of trade-offs. And how far women decide to go into business I think will in part be determined by choices about child rearing. And the structure of the American family and how we decide to allocate our resources.

Question: What do we need to know about markets?

Sally Blount: Economics is the study of the markets. And most sociology also involves the study of markets. Many disciplines take an eye on them. It’s important to remember that all a market is, is a group of like transactions. And all a transaction is, is a buyer and seller getting together. A buyer saying, "I want that." A seller saying, "I don’t want it as much as you want it because the price you are wiling to give me is higher than the price that I need to keep it." And that’s the nature of human commerce going all the way back to the earliest days of human organizing.

And understanding that all a market is an aggregation of people selling and buying similar things and that our models of markets are just that: they’re models. Supply and demand don’t exist. They’re a mode of what we see in every day life that help us understand every day life when we aggregate all those buyer and seller transactions together. And helping students
understand how human society functions, how it naturally self-organizes, which is what a market is, it is what a free market economy is. Because even in the socialist economies and the communists, those markets existed. They maybe weren’t tracked officially, but they were there and they were operating.

And so when I think about how we bring that into education, it’s "How do we help students understand how human organize? We humans interact and bring value to each other?" I love... Adam Smith calls it our propensity to truck. Now obviously, I never thought of that as a verb, and it had meaning back then, but I love that phrase now. Our propensity to truck is what makes us different from the animals. Our propensity to engage in transactions of me to sell you something and you to buy it so that I don’t... you know, you’ll do the farming and I’ll do the selling, and by having this propensity to truck, we’ll each have more well-being in our lives. It’s a very simple principle and I sometimes think that we use words like "markets" and "networks" things. We create an abstraction of reality. These are models of how we exist.

Question: Why is business the dominant social institution of the age?

Sally Blount: Because I look at the world and I see what creates wealth and business by the way for me is organizations and markets, which are both important parts of it. And it’s organizations operating as actors in markets. And I look out at the world and I watch... it’s not the government that’s creating jobs; it’s not the governance that’s creating innovation. It’s not the church that’s doing it. It’s not, you know... you can get something done so much faster with a for-profit business than you can with a not-for-profit or a government or a religious-based business, or even an NGO. And you can move jobs and move wealth and solve problems so much faster, it’s pretty obvious it’s the dominant social institution.

Now do I like that everyday? No. Because sometimes as it’s become the dominant social institution, we’ve allowed market-based logics to dominate our thinking. Part of "How did 2008 occur, how did all your classmates get lured?" as you talked about to Wall Street is because money has become even more motivating to us in the age of the business as the dominate social institution. And money is only a metric. Money is only one place of value in life and if there’s a sort of a challenge that we’re going to have, if we’re going to recalibrate, it’s going to be as a human on a psyche level understanding how much business has come to dominate and homogenize and control culture, in some cases. And making conscious decisions about where we’re going to let that happen and where we’re not.

Right now we’re dealing with the unattended consequences of business emerging as the dominant social institution and we’re beginning to have dialogues about how do we push that monetary metric back a little to let other values on the table as a society, both nationally and globally.

Question: Are markets fair?

Sally Blount: Markets aren’t fair or unfair. Markets create wealth and they’re incredibly efficient at allocating goods and resources and creating surplus for society that makes people better off. But markets have nothing to do with how that well being gets allocated across members of society. And you can’t argue they’re fair or unfair—they’re agnostic. They are amoral; not immoral, amoral. It’s we as human beings who get to decide how much each person should be entitled to on a moral and values-based level. And I personally am somebody who believes the fact that a billion out of the six billion of us on the planet live on what, less than a dollar a day isn’t fair. And I don’t believe that markets can solve it.

I do believe they can create more wealth to spread to help solve it. But if we just allow markets unchecked and somehow argue that will take care of it, I’ve seen no data to indicate that markets will know. Because they aren’t knowing, they’re allocating. They’re generative, not loving.

Question: What will fuel growth in the economy?

Sally Blount: Clearly the service sector is where we excel in the U.S. economy versus the manufacturing and so clearly that’s going to be, and the knowledge-based sectors. Because that’s where we have – still have a leg up in the world in higher education and people who come out with critical thinking skills, so clearly those pieces are going to lead. Finance is already playing a bigger role than any of us thought it would. But I personally, in terms of sort of hopes and dreams, I think that social enterprise is having more, on a small scale, but there’s more vigor in that than I would have guessed five or 10 years ago. And that excites me.

Question: Has the service sector permanently eclipsed manufacturing?

Sally Blount: For the foreseeable future, the service sector has eclipsed manufacturing and a lot of it is a simple cost argument. We cannot manufacture as economically in the United States as you can in developing countries because all kinds of tax reasons, benefit reasons, and things that we require and are good for society.

Question: Is that bad for the U.S.?

Sally Blount: The interesting thing about economics and the markets and the developing the developed world is we’ve never played out this game before in a global scale. We don’t know if there is long-term harm to losing a manufacturing base. Intuitively, it feels very uncomfortable. It’s unclear where certain sectors of our society are going to continue to find employment. When you drive through Detroit, it’s absolutely scary. In some situations... or cities like Buffalo that used to have these manufacturing bases. So I would argue we don’t know the answer to that. But I’m not sure we can fix it right now. Until people are willing to not look for the lowest cost on certain manufactured goods. The developed world will win out, or the developing world, as the jobs base for manufacturing will win out over the developed world.

And in order for that to change, we’d have to change how we buy, and how we consume. And it’s hard to foresee in the near future how that’s going to change. So in many ways I don’t know if we have a choice, we have to play it out and see what happens.

The beautiful thing is, the Internet, for example: We didn’t even know about it 20 years ago and even 15 nobody ever thought it was going to circle the globe as fast as it did. There’s so, and you know, that’s where you get your hope an sense of surprise... is there may well be things that are going to happen that we can’t even imagine that make this service-dominated developed economy just fine. And what we have to do when I get back to education is keep educating the thinkers and the innovators and the critiquers who will help those breakthroughs come to bear because that’s the only hope for human society because at some point the developing world have played out this chain as well. And we will have robots manufacturing everything basic. And the question is what is human life then? What is the marketplace then? How do we find meaning and value and get our needs met and feed our families?

Recorded October 27, 2010
Interviewed by Victoria Brown