Tiff Macklem helped steer the Bank of Canada through the financial crisis, making it the envy of its global peers. Now, he aims to place the Rotman School among the world’s best
Not long after the wrenching Brexit vote in the United Kingdom in June, Tiff Macklem, dean of the Rotman School of Management, found himself sharing a meal with some MBA students working on Bay Street for the summer. They recounted the frisson of being on trading floors and watching as global markets convulsed wildly in the wake of the vote and the ensuing political fallout across Britain and Europe.
Macklem listened attentively. “You got a little gift,” he told them, knowingly. “I bet you learned a lot in those few days.”
As he often does with students, Macklem, who is 55 and holds a PhD in economics, offered up his analysis of the 2008-09 financial crisis, and the importance of reflecting closely on the market conditions, system failures and “cognitive biases” that led to the meltdown. In a hyper-connected world, he says, “there are things [individuals] can do to prepare.” Business school educators, he adds, should “engage students to think about why they’re doing what they’re doing.”
It’s hardly surprising to find faculty members in a leading business school such as Rotman with insights about a financial shock considered to be the worst since the 1929 market crash that triggered the Great Depression.
But very few have Macklem’s direct experience of a severe crisis. As a senior official in both the Department of Finance and the Bank of Canada, Macklem spent those fraught months working intimately with top government officials and a tight circle of international central bankers to prevent the global financial system from collapsing altogether.
“The stress was crushing,” he recounts. “We worked every moment we could. [I knew] there would never be a time in my career when, if we could do a good job, we could have a bigger impact on the well-being of Canadians.” As he reflects now when discussing that episode with young people, “You learn so much when you’re in those situations. You see how things really work when they start not to work.”
In the two years he has spent as Rotman’s dean, Macklem hasn’t faced any crises. But the job has not been without the sort of challenges that pose true tests of leadership. Macklem’s first task: succeeding Roger Martin, the charismatic and long-serving dean widely credited with putting the Rotman School, and especially its MBA program, on the map. Then, just six months after taking the job, Macklem was confronted with the death of benefactor and champion Joseph L. Rotman, the merchant banker who not only provided the school with extensive philanthropic support, but also served as a crucial sounding board, challenging the dean to constantly push the school to the next level.
“When Joe died, it really knocked me back,” admits Macklem, a trim man with a quietly self-possessed manner and the gravitas of someone who’s seen the inner workings of government up close. “I was shaken, and I am not easily shaken.”
Yet in the wake of that terrible news – Rotman died suddenly in January 2015 at the age of 80 – Macklem has pressed forward with an ambitious strategy to consolidate the growth and brand awareness generated during Martin’s tenure. A business analogy seems fitting: if Martin was the hard-driving entrepreneur who grew his startup into a national leader, Macklem has stepped in as the executive whose task is to transform the Rotman School into a recognized worldwide brand. (The school ranked first in Canada and 60th overall on the 2016 Financial Times index of international management faculties.)
Macklem’s “Vision 2020” plan, released last fall, positions Rotman to become a globally renowned management school. He aims to accomplish this by increasing the impact of the school’s faculty as international thought leaders, better engaging alumni around the world, bolstering the student experience and further integrating Rotman with the university at large. The seed funding to launch this transformation comes from an historic $30-million bequest from Joseph Rotman’s estate (announced last spring by his family) and a further $15-million contribution from the university, which together comprise the Rotman Catalyst Fund.
This $45-million fund will be used to encourage innovative projects with the potential to transform management education and research. The first 17 projects have been vetted, and grants worth more than $3 million were approved over the summer. Among the successful proposals: investments to encourage entrepreneurship related to machine learning, boost online instruction, and scale up activities in both behavioural economics and pension and risk management to make the school a world leader in these subjects. “The gift is very true to Joe’s vision,” observes Macklem. “The structure ensures that the money flows to bold new initiatives.”
“In many ways,” adds Daniel Debow (MBA/JD 2000), who has launched several successful startups and is a founding partner of the school’s Creative Destruction Lab (a business incubator), “the Rotman Catalyst Fund is Joe’s bet on Tiff.”
Watch: Announcement of the Rotman legacy gift
When the future central banking star was in high school in Montreal in the 1970s, he recalls becoming attuned to the divisive tensions of an economy that seemed addicted to inflation. “Everybody was very angry about it.” Unions were competing for ever-higher wage settlements, pensions were eroding and the price of everything just kept climbing higher. As he began studying what he calls “the seductive logic of economics” at Queen’s University, Macklem found himself wondering what causes inflation: “Why,” he asked, “couldn’t we get a handle on it? I saw economics and finance as a powerful lens to address this big public policy question.”
He finished his BA in 1983 with many questions lingering, and embarked on a master’s degree in economics at the University of Western Ontario. The prospect of pursuing a PhD and then a career in academia began to loom larger, but then the Bank of Canada came calling. Macklem spent a year in Ottawa with the bank’s research group – he was hired by another young star named Stephen Poloz – and then returned to Western to finish his graduate work. By 1991, he was back in the nation’s capital, working under one of Canada’s pioneering inflation-busters, John Crow. Instead of focusing on overnight interest rates and the dollar, the bank at the time had begun inflation targeting – a new idea in the rarefied world of monetary policy.
“It was a very exciting time,” says Macklem. No one had a strong theoretical handle on how to best set monetary policy in order to keep inflation close to two per cent. Macklem’s research team worked hard to build one. “The senior management of the bank was hungry for our research and analysis.”
Macklem took on increasingly high-profile assignments within the bank, readying him for a shot at the top job, a federal appointment. But when former Bank of Canada governor Mark Carney decamped for the Bank of England, in 2013, the Conservative government named Poloz instead. “It was no secret I wanted to be the Bank of Canada governor,” says Macklem. In the aftermath, as he began to reflect on what to do next, headhunters came knocking, including one asking if he’d be interested in the dean’s position at Rotman.
“The idea of a senior academic role appealed to me,” says Macklem. He drew up lists of pros and cons. “But, at the end of the day, you have to go with your gut. It just felt right.”
In the spring of 2015, Marni and Roland Wieshofer, who work in finance and entertainment in Los Angeles, had an idea for showcasing the Rotman School during the Toronto International Film Festival. Both Canadians with MBAs from U of T (pre-Rotman), the Wieshofers came up with a playful theme: “Tiff@Rotman” – a swank reception for filmgoing Rotman alumni, with the dean hosting, followed by a special screening. Three hundred people showed up, and “we hope to increase that to 500 this year,” says Marni.
Since moving from Ottawa to Toronto, Macklem has found himself thrust into the sorts of settings and roles that don’t typically come with a senior policy-making position, including red-carpet affairs and other events that require a certain knack for showmanship and schmoozing. “It’s been a different role,” he says. “But talking about the amazing things our students and faculty are doing is not that hard.”
Macklem is now spending almost a third of his time travelling around the world, meeting with far-flung Rotman alumni to solicit their views on how the school can engage them better – not just for philanthropic purposes but also to situate Rotman on the radars of international firms, and create new career and mentoring opportunities for grads. The dean also recently appointed Kevin Lobo (MBA 1995), who runs Michigan-based Stryker Corp., a $10-billion-a-year medical devices firm, to head a global advancement board. Its members, comprising alumni, friends, and business and community leaders from around the world, will provide Macklem with input on how Rotman can raise its international profile.
Debow sees this process as the crucial second phase of Rotman’s evolution. “The question is, how do we get it to the next level?” he says. “The only way for Rotman to transcend Canada is when the best people from all over the world want to be here.”
While Macklem has a mandate to situate Rotman more definitively on the global stage, he’s also told his management team to fortify the undergraduate experience for commerce students. In the past year or so, the school has worked closely with the Faculty of Arts and Science to establish more community-building activities for these students, give them greater access to facilities and faculty members, and improve career placement services. While Rotman now ranks as the top MBA school in Canada, Susan Christoffersen, a professor of finance and a vice-dean with responsibility for undergraduate programs, says that Macklem’s intensified focus on commerce is all about making it clearly the best commerce program in Canada. “Right now, we’re among the top programs but we need to do more. He is committed to this.” She notes that the school is also creating new graduate programs in financial risk management, professional accounting and management analytics as a way of broadening its offerings.
The final element of Macklem’s strategic focus is to fill out the school’s significant research capabilities, which have become increasingly prominent in the world of management scholarship. Between 2007 and 2016, Rotman rocketed up the Financial Times’ business school rankings in the research category, moving from 23rd to third in the world, now behind only the Harvard School of Business and the Wharton School at the University of Pennsylvania. (That standing, as Christoffersen notes, comes with both reputational rewards but also risks, as it means that Rotman’s researchers have increasingly become targets for recruiters from rival universities.)
Kenneth Corts, a Rotman professor of business economics who is the Marcel Desautels Chair in Entrepreneurship and the vice-dean of faculty and research, says the school is looking to recruit academics in fields such as behavioural economics, design thinking and pension management. He comments that strength in these disciplines will help position Rotman to deliver thought leadership in innovation, entrepreneurship and governance, which are among Macklem’s goals.
Macklem points out that his last role at the Bank of Canada was chief operating officer, so he spent a lot of his time recruiting talent to an organization packed with PhDs. The difference, as he likes to joke, is that the researchers who worked for him at the bank had to “answer my questions.” Rotman’s professors, he notes, “don’t actually have to answer the dean’s questions. The dean’s influence is more of soft power.”
The old joke about central bankers, which Macklem knows, is that their task is to take away the punch bowl just as the party is getting started – a pithy reference to their policy duty to dial back monetary stimulus when a slumping economy has finally begun to find its legs. The line is also a reference to a mantra that has informed the work of a generation of economists such as Macklem and Mark Carney – that systemic financial and monetary stability, in the form of interest rate targets and robust regulation, is critical to global economic growth.
But in his current role, and especially as the titular custodian of the $45-million Rotman Catalyst Fund, Macklem also finds himself in the somewhat unfamiliar position of seeking out, and then underwriting, a certain sort of risk that could transform the Rotman School into a global brand.
Macklem insists there’s no temperamental tension between his former mindset and his current one, partly because of the lessons he learned during the crucible of the autumn of 2008, when he and his colleagues had to make the toughest decisions in a crisis situation without a clear sense of where they were going. In fact, it’s not a stretch to suggest that Joseph Rotman’s historic bequest, in the form of the Rotman Catalyst Fund, offers Macklem another institutional platform for making very demanding decisions with potentially game-changing outcomes. “We’re going to make bets, but we’ll make informed bets,” he says. “And true to Joe Rotman, we are going to aim high – very high.”