When Donald Jacobs was searching for a new dean of Northwestern’s business school 25 years ago, he never imagined he would take the job — he didn’t even want it.

Since then, however, it’s been the job “the dean of deans” has never wanted to leave.

On Wednesday Dean Jacobs announced his plans to retire as head of the Kellogg Graduate School of Management on July 1 and to return to teaching in the finance department.

“This decision to retire as dean is not an easy one,” he wrote in a letter e-mailed to Kellogg faculty, staff and students.

“I feel I have devoted my full energies to this job and the time has come to step down from this leadership role and spend my remaining years at Northwestern University teaching and spending more time with students.”

His announcement brought audible gasps at Kellogg’s first faculty meeting of the year, according to administrators.

University President Henry Bienen said Jacobs had been seriously considering stepping down after the dean celebrated his 25th year on the job in April. Jacobs also had mentioned the possibility at many previous faculty meetings.

Jacobs was in New York Thursday and unavailable to comment, but Kellogg administrators and students alike praised the dean for molding the school into its present form — a form ranked second in the nation this year in the Oct. 2 issue of Business Week magazine.

“The dean’s really changed the face of business education at Kellogg and in business schools around the world,” said Brian Poger, president of Kellogg’s student government, the Graduate Management Association.

“My reaction (to Jacobs’ announcement) was a bit of surprise but a belief that the school will continue on its trajectory, beating every expectation that you can imagine.”

Asst. dean for administrative services Carole Cahill called Jacobs a “dynamic leader” whose years as dean ran so smoothly that “there was never a juncture where people said, ‘Why shouldn’t he be dean?'”

Bienen, who along with Jacobs spoke at Wednesday’s faculty meeting, said he felt “great regret at seeing him go.”

“We had a very close working relationship and we were very good friends,” Bienen said. “But he’s entitled to move on to other things and he’s left (Kellogg) in extraordinarily strong shape.”

Bienen and University Provost Lawrence Dumas sent a letter to upper-level administrators Tuesday, praising Jacobs for changing Kellogg “from a small midwestern business school into a graduate school recognized internationally as one of the very top such schools in the world.

“He has been exceptionally successful in marshalling the energies of student, faculty, staff, and alumni constituencies to help fulfill his high ambitions for the school.”

In August, the university put Jacobs’ name on the building complex that contains Kellogg’s full-time MBA program and the university’s department of economics.

Although Jacobs will not step down until July, Bienen said the search process will begin in the next several weeks.

“We need to get going right away,” Bienen said. “I’m sure we’ll find someone very good.”

When Kellogg Dean John Barr retired in 1975, Jacobs headed the search committee for a new dean but never expected that dean to be him, said Cahill, an assistant dean.

But after four nominees turned down job offers, Cahill said, “the committee said to (Jacobs), ‘Why don’t you do it?'”

Jacobs then became dean — reluctantly — expecting to leave the post within several years.

Despite his hopes to be only an interim dean, Jacobs immediately set his sights high to improve the school, Cahill said.

When she came to Kellogg 29 years ago, Cahill worked in the finance department, where Jacobs was chairman from 1969 to 1975.

“I had the good fortune of watching the school’s successes under his tenure,” she said. “There was always a vision of ‘OK, we did it and it was great. How can we make it better?'”

During his tenure, he picked up the nickame “dean of deans” in honor of his stature as the longest-serving business school dean in the country.

Under Jacobs’ leadership, Kellogg became one of the first business management schools in the country to interview every applicant and began to focus on team-oriented coursework in classes, both products of his focus on strong interpersonal skills.

In 1979 Kellogg opened the James L. Allen Center, the first education center for executives on a university campus. More than 5,000 executives attend the center each year, according to a university press release.

Jacobs also worked to build relationships with institutions abroad, creating Kellogg’s first joint international program in Thailand in the early 1980s with Chulalongkorn University.

Executive MBA programs joining with foreign schools have been established in the last decade in Israel, Germany and Hong Kong.

He was in New York Thursday to help in the planning of the new Indian School of Business in Hyderabad, India.

On campus Jacobs made strong efforts to connect with all levels of the Kellogg community, especially the student body, said Director of Admissions and Financial Aid Michele Rogers.

As an administrator, she said, Jacobs was “instrumental” in prompting the school’s departments to work more closely together toward common goals.

And such work pushed Kellogg high in the rankings. When the Wall Street Journal in 1985 released the first-ever MBA program rankings, the performance of Jacobs’ school had landed it No. 1 in the nation.

In Business Week’s rankings, Kellogg finished first from 1988 through 1992 and has never been far from the top.

This year Kellogg finished second overall to the University of Pennsylvania’s Wharton School, but the magazine said the two schools were in a “neck-and-neck race.”

After growing up on Chicago’s West Side, Jacobs graduated from Roosevelt University in downtown Chicago in 1949 and then earned his master’s and doctoral degrees from Columbia University.

He arrived at Kellogg in 1957 when he become an assistant professor of finance. He was quickly appointed head of the first research center at the business school, the Banking Research Center, in 1960.

While at Kellogg, Jacobs also was appointed to several positions in international business organizations and in the U.S. government. In 1970 he was co-staff director of the Presidential Commission on Financial Structure and Regulation.

He also served as chairman of the board of AMTRAK from 1975 to 1979.

Simon Breuer, a second-year Kellogg student, said he learned the theory in a Kellogg class: “If you’re not tapping the ideas of the front-line worker, you’re missing information or creative solutions, and you might miss problems, issues.”

Breuer said Jacobs applied that philosophy to Kellogg by always being open to student input and new ideas.

Many students said they wondered how easily Jacobs could be replaced.

“I guess I have mixed feelings,” first-year student Jonathan Klein said. “Everyone expected it to come sooner or later, but I’m wondering how it’s going to affect the school.

“Obviously he’s loved. Everyone I know that knows him or works with him thinks very highly of him.”

Second-year student Isi Okogun said Jacobs’ resignation would “leave behind some big shoes to fill. He’s really taken Kellogg to the top.”

“His departure will definitely create a vacuum for the school and for business education in general,” Okogun said.

While he is stepping down from the school’s leading position, Jacobs will remain as a professor and will retain a visible presence at the school, said asst. dean of external relations Richard Honack.

After Jacobs addressed the faculty Wednesday, members of the finance department crowded around Jacobs, celebrating his July return to their department.

And students said they know Jacobs’ legacy will remain.

“He’s created such a unique culture at Kellogg that will continue to grow over time,” said Poger, president of Kellogg’s student government.

“He always said he was going to be back to teaching,” he said. “We’re obviously sad to see him go, but we’ll support him as he’s
always supported us.”

The Daily’s Demelza Baer and Daniel Schack contributed to this report.