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with the short-term results and the view of Wall Street. The flip side is that for a
university, reputation comes first. It’s very hard to recover from reputational
difficulties. For corporations, reputation is very important, but it’s one of several
key factors. The place the analogy probably really breaks down is that it’s much
harder to quantify in the university how you’re doing with these various
communities than it is on the corporate side.
S+B: Many CEOs step into their leadership role at a time of crisis or when a
turnaround is needed, and find the experience to be a crucible. What was the big
problem at Stanford when you took over in 2000?
HENNESSY: I didn’t have an immediate crisis. We certainly had some issues,
though. Our hospitals had serious problems. But by my nature, I’m not a caretaker
kind of leader. So I wanted to set an ambitious agenda for how to make Stanford
better. And I think early on, we realized that there wasn’t enough cross-disciplinary
collaboration, which was going to become increasingly necessary if we were going
to t ack le rea l ly big problems, such a s inequ a lit y, g loba l con fl ic t, or climate cha nge.
So we wanted to change the nature of how the universities and faculty thought
about interdisciplinary collaboration. It worked because there was a lot of bottom-
up planning and engagement of faculty around the vision.
S+B: Your book highlights several things you didn’t do — for example, you
didn’t pursue a satellite tech campus in New York. Why are these choices
relevant in the context of a conversation about leadership?
HENNESSY: What people probably don’t understand is that if you look at the
core operating budget, which is the piece of the budget that’s controlled and
allocated by the leadership at the institution — after you cover inflation expenses
and increases in financial aid, you have about a 1 percent annual increase in the
base budget. So you have to think carefully about any new activity. When we
planned the Stanford Challenge fundraising campaign, we were initially targeting
$4 billion. When we went across the university and said, “Tell us what you
need,” the total people asked for was $12 billion. As one of my trustees said,
“That’s a wants assessment, not a needs assessment.” You have to focus. If we do
something, will it really enable a university to move into a position where it can

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