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George Gau from the Inside Out
The McCombs School of Business finds an insider to take an outside
look
by Pam Losefsky
As the new dean of the McCombs School of Business, George W. Gau tackles the challenge each day of turning a very good school into a great school—the best public business school in the country, in fact.
A lot of the job is familiar territory. After all, he has spent the last 10 years redefining an underdeveloped finance department into a quickly advancing powerhouse of innovative offerings like the MBA Investment Fund and the financial analysts program; unique industry/education collaborations in energy, private equity, and real estate; and faculty who are rising stars in their fields. Setting strategy, building resources, developing partnerships—this is all in a day’s work for Gau.
Even having been involved in the inner workings of the school for a decade, though, Gau says the dean’s job is fascinating—issues come across his desk each day that he never could have imagined. “There are 6,000 students, 200 faculty, and 300 staff here—that’s a large number of people, and apparently a lot of opportunity for unusual things to happen,” he said. “Some good, some bad, some just plain bizarre.”
Nevertheless, he is prevailing in this trial by fire.
Getting Here from There
Raised in St. Louis, Missouri and Edwardsville, Illinois, George Gau was the first member of his family to attend college. A postal worker and sometime farmer, Gau’s father knew that education would be the path to success for his children and encouraged them to get undergraduate degrees.
At the University of Illinois in Urbana-Champaign Gau flirted with aeronautical engineering, then accounting before deciding on finance as a major, finding a natural inclination toward the business discipline. But it wasn’t until he was a master’s student that he considered going into academics. He had participated in a research seminar as an undergraduate and really enjoyed the experience, but he’d had no exposure to teaching. So Gau approached the chair of the Illinois Department of Finance to ask if he could teach a class, and even offered to teach without compensation just so he could find out if it was something he’d like to do.
The chairman agreed to let him teach and insisted on paying him. After one semester in the classroom, Gau had found his calling, and resolved to continue on at Illinois for his Ph.D.
Gau began his academic career at the University of Oklahoma in 1975. There, he conducted research in real estate and financial markets before being recruited into the Urban Land Economics Group at the University of British Columbia (UBC) in Canada four years later.
In his ten years at UBC, Gau earned accolades for his teaching and national recognitition for his innovative research. So influential was Gau’s research that his conclusions on mortgage rate insurance were adopted as a national policy by the Canadian federal government and announced during a Throne Speech (the equivalent of our State of the Union Address). He rose to head UBC’s top-flight Urban Economics Division, and was elected president of the American Real Estate and Urban Economics Association in 1986.
It was in 1988 that he got a phone call from the University of Texas. “Texas at that time was growing its faculty,” recalls Gau. “Enrollment at the business school was still quite high and new faculty lines were needed to keep the student/faculty ratio within acceptable levels for accreditation.” While UT’s finance department was in need of an overhaul, Gau had faith in the values of the department’s newly appointed chair, Seha Tinic, and in a new associate professor in the department at that time, Laura Starks. He moved his family back to the United States to accept the position.
Gau succeeded Tinic to the department chairmanship in 1992, becoming the rare kind of chair who works to develop the department rather than serves just as an administrative caretaker. “Some academics turn to our profession because they enjoy the solitary work on research and don’t necessarily want to be a manager and develop new external initiatives,” believes Gau. “And I really thought I had more of a typical academic personality. But I found, to my surprise, it was a lot of fun to get out there and try to make new things happen,” he says of his decade-long drive to put UT’s finance department on the map by pursuing collaborations with the financial services industry. “I enjoyed going out and talking to firms and developing relationships. Plenty of ideas about our programs and potential collaborations didn’t come to anything, but if you throw enough seeds out, something’s going to germinate.”
The first of Gau’s ideas to take root was The MBA Investment Fund, the very first private investment company run by students, and now the one with the most money under management ($12.5 million). His idea was to give Texas MBA students hands-on experience managing real investments and running a business. Gau approached alumni of the school who were also accredited investors and was able to garner $1.6 million in investments at the first offering in 1994. Investment firms from around the country now clamor for graduates of the nine-year-old Fund, who are some of the most qualified hires around.
Once the MBA Investment Fund was up and running, the students needed a place to research stocks, make trades, and work as a team. So Gau conceived of the EDS Trading & Technology Center, a unique facility built in 1996 with in-kind donations and outright gifts from 40 companies. The EDS Center comprises a state-of-the-art multimedia classroom with satellite uplink capability, a trading room complete with live datafeeds just like on Wall Street, and a conference room.
From that point on, raising money for strategic industry-education collaborations was Gau’s second job. Capitalizing on the expertise of the finance faculty, he has developed research centers in energy finance, real estate finance, private equity, and investments, bringing much acclamation to the department and public attention to the McCombs School.
Probably more than anything else, it was Gau’s innovative thinking and external focus that led the search committee to select him as the final candidate for the deanship.
Now What?
Since taking the reigns (and the official F-99 dean’s parking space) from outgoing Dean Bob May in June 2002, Gau has spent a great deal of time thinking about what the school needs to do to move forward. “I think at this point in the school’s development it’s important for the dean to have strong academic credentials in order to do the job,” surmises Gau. “I know what the classroom is about, and I feel confident that I know the qualities of really great business schools like our competitors. From there I can visualize what we need to do to get to that level.”
Thus far, the new dean has adjusted the reporting structure so that the effective COO will be Senior Associate Dean David Jemison, freeing Gau to focus on strategy, finances, and external relationships. “I’ve also tried to come up with some ways to stay in touch with students, faculty, and operating issues without being immersed in the day-to-day decisions,” says Gau, “like faculty lunches, student open houses, and other personal interactions.”
He has put in place a planning committee to develop a new strategic vision for the school that will take it to the goal of being the best public business school. The new dean has also already identified three areas of focus: strengthening the research environment, improving the undergraduate program, and finding new ways to be involved with industry.
In order to advance the academic environment, Gau will have to overcome resource challenges and further develop a culture that encourages present faculty and draws top scholars to the school. A commitment from Provost Sheldon Eckland-Olson to add 30 new tenure-track lines to the McCombs budget over the next five years will make Gau’s task a little easier, but he’ll need to replicate his success in the finance department to fill those spots with prolific researchers and charismatic teachers.
He will also need to find the financial resources to support the new faculty. According to Gau, “While the University will provide salaries for the new faculty, we will need to acquire additional discretionary funds to support their educational and research development, a cost equal to about 40 percent of a faculty member’s salary.”
For Gau to build more and better collaborations with industry, he will have to secure buy in from the school. “I think the faculty will support this new dimension because they know I’m coming from an academic perspective and that I care about research,” he believes. “It is important that we recognize we’re a professional school and we have an external constituency,” he says. “It’s in the interests of both the school and industry to work together in whatever creative ways we can.”
Aside from being the leader of a top-tier business school, George Gau is the father of two grown sons. He draws a parallel between a lesson he endeavored to teach his sons while they were growing up and his aspirations for the McCombs School: “You should know who you are today, but recognize that you can acquire new skills and develop yourself in ways you wouldn’t imagine. You’ll be surprised at how you can change.”
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
