Speech by Dean Larry Tapp
Dean’s Panel
Administrative Sciences Association of Canada (ASAC) Conference,
Sunday, May 27th, 2001
Richard Ivey School of Business
Deans: Larry Tapp, University of Western Ontario
Bill Blake, Memorial University of Newfoundland
Abdolhassan Jalilvand, Dalhousie University
Vishwanath Baba, McMaster University
There are a great many opportunities and challenges facing Canadian business Schools in the 21st century. In fact, along with my esteemed colleagues on this panel, I have just spent two very productive days delving into many of those issues. This morning, however, I would like to address this issue that I believe to be the preeminent opportunity and challenge for several of Canada’s business schools, certainly for Ivey — and that is GROWING GLOBAL.
I believe the majority of the challenges and opportunities that face not only Canadian business schools, but all Business Schools, is a direct or indirect result of globalization — the need to compete on an international scale.
Why is that?
There are five key reasons why Canadian business schools — at least those that aspire to be in or stay in the top tier, , have had to take on an international perspective and strategy.
1. Competition for Faculty
A few years ago, most of our Business School found they were in quite a predicament – we had a large number of very senior faculty about to retire and not an adequate number of junior and mid-career faculty to fill the ranks behind them. We all went to market only to discover that the supply of new faculty was not only small but shrinking as fewer and fewer students opted to take the PhD path.
American and European Schools were in no better shape, except that the large private schools, such as the Harvards, Whartons and Kellogs had the financial resources to compete. As a consequence, we all began competing for the same pool of high-quality, tenure track faculty. For Ivey, that predicament led to the hiring of over 40 new full-time faculty — most of them from U.S. Schools.
To help attract a large number of high-caliber faculty, Ivey’s best option was to grow our international reputation and presence.
The need to prepare our students to compete in a global market place
All of our students, whether or not you hope your students will spend their careers in Canada, need to be prepared to compete in a global environment. That has had, and will continue to have serious implications for business schools in terms of the faculty we hire, the teaching materials we create and use, and the critical need to continuously update and monitor the relevance of our course curriculums.
Lack of growth potential in the Canadian MBA market
We have seen very little to no growth in the number of Canadian or American students taking GMAT. If your school has a growth plan, it must either develop a particular niche or a new market in which to sell your programs.
The emergence of new markets for MBA programs, such as China, India, the Middle East and Central Europe has provided great opportunities in light of a flat North American market. However, ensuring that our Schools can meet the needs of international students and the impact they have on the learning experience and the services our Schools need to provide can be a challenge.
Technology eliminated traditional boundaries and barriers to entry
Technological advances in communications are breaking down the traditional regional barriers and providing new avenues for all schools to reach beyond their borders and around the world. This is increasing the competition for Canada’s best and brightest students.
The proliferation and growing influence of International Rankings
The proliferation and growing influence of international rankings, such as the Financial Times, Wall Street Journal and Business Week has enabled several of our Canadian Business Schools to get on the map and attract students from around the world. These rankings in particular weight “international” criteria quite heavily – from the number of international students and alumni to advisory board members and exchange programs. In fact, 20 percent of the Financial Times ranking in 2001 was based on International components.
In short, what the rankings tell us is that going global is what our customers want!
Going global also offers many exciting opportunities and benefits both for our Business Schools and for the Canadian economy:
We can attract the best and brightest students — our future business leaders —and much needed PhD students and faculty.
¨ Our students gain a global perspective, not only from their instructors and materials but also, and perhaps more importantly, from the real-world experiences of their fellow students from around the world. They also leave the School with both an MBA and a network of ready-made international contacts.
¨ That works for your School as well. You create effective working relationships and PR sources all over the world through alumni who take on international roles. The more alumni you have working internationally, the more international students you attract. It’s a snowball effect… and it can happen quite rapidly.
¨ The Canadian dollar, culture and environment are appealing: in the last FT ranking, Ivey was ranked the best value for the money of any MBA program in the world.
¨ The international rankings are putting Canadian Business Schools on the map and building our profile: in the Financial Times 2001 survey, no less than NINE Canadian business Schools ranked in the top 100. For a country with a population less than that of the state of California, that’s says an enormous amount about the quality of the Canadian education experience.
That’s opportunity!
Going global offers many benefits. At the same time, it is fraught with tough challenges, critical strategic decisions and outcomes, and the need to stay very focused — to continuously ask yourself: “What business are we in?” “Does this opportunity fit with our strategy?” “Are we doing the right thing?”
Over the next few minutes, I would like cover two areas. First, I would like to focus on the third point I just mentioned: the lack of growth potential in the Canadian MBA market by giving you a brief picture of our experience at Ivey and what that has meant in terms of our strategy for faculty and student recruitment, programming, and placement services. I would also like to raise the question of what going global really means when living in the shadow of the largest MBA market in the world.
I promise you I am NOT about to bore you with a “glory-be-to-Ivey story”. In the long run, we have certainly enjoyed some great successes, but we also had at least one heart-stopping moment of truth and many periods throughout the last five years when we have stopped and reassessed ourselves. In fact, after six years of growth, we are about to undergo a period of in-depth strategic review once again. I believe that is not only healthy for any organization, it is an integral part of growth — especially in a truly global and rapidly changing marketplace.
In 1995, just before I was hired as Dean of the Business School, the University hired a team of external consultants to conduct a SWOT analysis on the Business School for the Decanal review committee. At that time, the MBA market actually appeared to be shrinking in Canada, with applications declining. Ivey, in fact, had cut back its program from four sections to three.
The consultants report made our options very clear: either grow our international profile or put our flagship MBA program at risk of slowly declining and even risk our reputation and the quality of our program in Canada. As a result, in 1995, we established three major strategic goals:
1. Build a world-class infrastructure that would enable us to meet the increasing demands of both our students and faculty for first class services and facilities.
2. Aim for financial self-sufficiency so that we could set our own agenda, without relying on declining government funding.
3. Expand our global presence: physically and through branding and public relations programs, research, case writing and exchange programs.
We chose Asia (Hong Kong specifically) as the location for a new Executive Development Centre and Campus for a couple of reasons. The strongest was that we already had a large and influential alumni base in Asia, with the majority located in Hong Kong. Several of our faculty had connections in Hong Kong and already had focused most of their research on the Pan-Asian market. Our Alumni there advised us that the Hong Kong market needed and would respond positively to a North American program, which would allow them to reap the benefits without having to leave the country.
We focused on our strengths: the MBA program taught through the case method of study and our ability to produce case teaching materials. As our new campus — the Cheng Yu Tung Management Institute was being built, faculty and staff were sent over to begin marketing the program, building the brand and developing the infrastructure – both physical and academic. In 1997, Ivey also launched its Asian Management Institute and Asian Advisory Board. The Institute would be responsible for the development of the learning materials we would need for the new Hong Kong program.
Remember I mentioned those heart-stopping moments of decision? Ours occurred in the fall of 1997. With construction of the new building well under way, the Hong Kong currency went into a freefall and took the market with it. We had the option at that point to pull out, but we also had made many commitments to our alumni and felt confident of their support. We made the decision to persevere and kept our fingers crossed that the government would peg the Yen – after all we were paying faculty and staff in Canadian dollars and our revenues would be in Hong Kong currency. Let me tell you, it was a struggle to attract students with so much uncertainty in the economy. But above all, we believed our strategy was the right one.
We graduated our first Executive MBA class in October 2000 and will graduate our second class this fall. The classes were a bit smaller than we had planned, but we are beginning to see a major turnaround and the brand has begun to take hold in the Executive Development market in Hong Kong as well. Moreover, Ivey is now the largest producer and distributor of Asian cases with over 16 published volumes developed and used by over 56 Chinese business schools.
By why did Ivey undertake this high-risk strategy? If it were just to fill the Hong Kong EMBA class, would it be worth it? Frankly, probably not.
More importantly, the success of our Hong Kong program has contributed to the success of our Canadian program, by attracting top Asian and other international students, providing our faculty with an international experience, and increasing the learning experience for both our Canadian and Asian Students.
In 1999, we not only increased our MBA program to four sections, we have also have seen an increase in the quality of the students. GMAT, average age, average work experience and languages spoken have increased significantly over the past 3 to 4 years. For example, the average GMAT for last years incoming class was 659 compared to 628 in 1997 and work experience increased from 4.2 years to 5.2 years. Last year, over 40 percent of our students were either recently landed immigrants or visa students, representing 33 different countries —half were from China.
Going global raises new challenges for all aspects of the School from recruitment to career services. With two thirds of our students speaking a first language other than English and coming from a variety of different cultural backgrounds the challenges for our faculty have also increased. For Ivey, our challenge is to ensure that the Asian students are provided with appropriate English language assistance and the support they need to integrate into our culture. It takes a Chinese student longer to adjust to the case method, since they are not accustomed to arguing with their peers and certainly not with their teacher. It has been a learning experience for all of us.
Many international students come to Canadian Schools not only for the Canadian Education but Canadian work experience. This is also good for Canada. While Canadian students want to gain international experience by leaving the country, we can attract the best and brightest from China, India, the Middles East and Central America.
We believe that Ivey has truly become an internationally focused and globally positioned school, with a strong Asian component. We know this model works, but it’s too complex and resource intensive to repeat in other regions.
The reality is that when Canadian business schools talk about going global, they actually are talking about competing with the US schools. Obviously it is not possible to replicate the Hong Kong experience in New York State, or Michigan. Nor can we look to repeat it in most of Europe. To compete in North America, we will continue to build our international reputation and profile through aggressive marketing and the double-edged sword of rankings, but there are other opportunities for Canadian Business Schools. We should look at the potential markets in Mexico, and the more developed areas of South America where a quality education and access to the North American market are strong incentives to attract top quality students.
As I have stated, Canada is building an enviable reputation for the quality and affordability of its Business Schools. We have the opportunity to exploit this hard earned reputation and build on our strengths: the quality of our faculty, our international alumni base and the quality (and affordability) of the Canadian lifestyle, to truly grow global. It is not without risk or challenges, but in the long run, I believe that it is the way we must proceed.
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