Established and Evolving

As business education matures, so do the business schools formed at the industry’s outset. How do these elder institutions stay innovative for decades—even centuries—after their founding? By ensuring a continuous flow of fresh ideas and an ongoing spirit of experimentation.
Established and Evolving

IF THERE’S A single question that drives management research, it might be this: Why do organizations succeed or fail over the long term? When experts sift through the wreckage of once iconic, now fallen organizations such as Blockbuster and Nokia, they almost always find the same cause for the collapse: Each company’s leaders held on to past accomplishments too tightly and failed to adapt to changing markets. Firms still thriving 100 years or more after their founding—think DuPont, which began as an explosives company in 1802, or Colgate-Palmolive, which started making toothpaste in 1873—have stayed true to their original missions and adapted their offerings to market demand.

Similarly, long-established business schools have stood the test of time largely because of their ability to evolve with new markets, new competition, and even new world orders. Take, for example, École Supérieure de Commerce de Paris. Founded in 1812, ESCP Europe claims the title of “oldest business school in the world,” says its dean Frank Bournois. Its faculty take pride in the fact that their institution was co-founded by the 18th- and 19th-century economist Jean-Baptiste Say, who coined the term “entrepreneur”—a word that, in the original French, often translates to “adventurer.”

The school has thrived for more than two centuries by maintaining the entrepreneurial and adventurous mindset that Say built into its culture from the start, says Bournois. Because of that legacy, its faculty are still willing to take risks. “Business schools cannot move forward if they allow others to take the lead,” Bournois says. “We must always be encouraging our people to take initiatives that are in line with the future of management education.”

Jorge Talavera, president of Escuela de Administración de Negocios para Graduados (ESAN) in Lima, Peru, points to a spirit of experimentation and collaboration as keys to his school’s longevity. Founded in 1963, ESAN was created in partnership with the Stanford Graduate School of Business in California, at the behest of the United States Agency for International Development. As one of the oldest business schools in Latin America and the first to offer graduate business degrees, ESAN initially fulfilled its mission to strengthen the Peruvian economy by offering programs modeled after Stanford’s. But over time, the school has advanced its position by staying responsive to the market. “Everything we offer must be because the country, companies, and society need our programs,” says Talavera, “not just because we want to offer it.”

Higher education is often criticized for being slow to change—but the stories of the world’s oldest business schools show the opposite. In the following pages, four academic leaders point to factors that have allowed their schools to flourish for nearly 60 years, 75 years, or 100 years or more. At the heart of their success? Cultures that not only have stayed adaptive to change, but also have been willing to make change happen.

'HAPPY TO COMPETE'

In the earliest days of business education, competition, when it existed, was mostly among local institutions. However, as more providers entered the market, they often replicated the models established by their older counterparts; for-profit consultants and alternative educational providers now exert additional pressures on established institutions. But in many respects, it’s that competition that keeps mature schools agile, says Talavera. On the one hand, “the umbrella of a legacy helps a lot,” he says. But on the other, “we are very happy to compete because it means we have to be very creative and innovative to differentiate our programs.”

ESAN faculty view competition through the lens of collaboration, maintaining a wide range of partnerships with peer institutions. For example, 18 years ago, ESAN opened its own fablab, part of a global network of 1,680 fablabs that began with a 2001 initiative at the Massachusetts Institute of Technology in Cambridge. These maker spaces collaborate and share best practices related to innovation across the network.

Additionally, ESAN delivers its International MBA jointly with schools across Latin America, Europe, and the United States, as well as in Japan. Students from participating schools spend time at both ESAN and a partner school, which exposes them to different cultures and allows them to earn degrees from two different institutions.

ESAN also participates in the Partnership in International Management (PIM), a network of 65 business schools on six continents. Once schools are selected as members, they must send representatives to every PIM meeting—schools that miss two meetings in a row will have their membership terminated. To remain in good standing, they also must engage in substantive exchanges with at least 20 percent of PIM’s membership. Schools negotiate many partnership agreements at “Open Market” sessions, held at each PIM meeting.

PIM is a boon for its members, because the quality of programs at each school in the network has already been vetted. In return, the schools are able to combine strengths in ways that enrich their students’ educational experiences and keep their programs fresh.

These collaborations have helped ESAN raise its global profile—and increase enrollments. Just a few years ago, its MBA enrolled around 1,000 students, mostly in its full-time program. Today, more than 7,000 students attend its full-time MBA, part-time MBA, and specialized master’s offerings at campuses across Peru. With each new partnership, Talavera says, “we become more international and more open” to new ideas.

Students come to ESAN’s joint programs from countries around the world, but they “don’t need to speak Spanish because our programs are offered in English,” says Talavera. “They’ll get to live in a Spanish-speaking country, where they’ll be able to listen, watch TV, interact with people, and learn another language.” As part of such a large global network of schools, ESAN is able to promote its bicultural, dual-degree experiences to a large number of potential students. That reach, Talavera adds, has helped the school stay competitive over time.

EXPANDING OLD INTO NEW

ESCP Europe boasts a rich history, but parts of that history were shaped by events that might today be viewed with disapproval, Bournois admits. The school was founded on the heels of French Colonialism, an era when France put local populations in Africa and North America under its rule. The school cannot change that past, but it can take the best from it, Bournois says, pointing out that it was during ESCP’s earliest days that its faculty cultivated relationships with leaders in government and global business. These relationships laid the foundation for its expansion into international markets in the 1970s and 1980s. Those years, he says, “were a little bit shambolic. But as we gathered momentum, we acquired more experience.”

ESCP Europe now has six campuses, including the largest in Paris, as well as those in London, England; Madrid, Spain; Berlin, Germany; Turin, Italy; and Warsaw, Poland. Each country legally recognizes the school as a local university. “We’ve had to adapt to the national regulations, but that has made us stronger because it has helped us understand the differences in management in each of these countries,” Bournois says.

Each campus closely links its programs to local industry, from hospitality management in Spain to sustainability in Germany to the food and beverage sector in Italy. Today, ESCP’s faculty represent more than 50 nationalities, and 65 percent of the students come from countries outside France.

Expansion has similarly driven growth at the Desautels Faculty of Management at McGill University in Montreal, Quebec, Canada, says its dean Isabelle Bajeux-Besnainou. However, in this case, Desautels expanded into new disciplines. The business school began in 1906 as a department of commerce offering a two-year program within the university’s Faculty of Arts, and it focused primarily on economics and accounting. In decades that followed, that department branched into new disciplines before being rebranded as the Faculty of Management in 1968. It became the Desautels Faculty of Management in 2005, in honor of executive Marcel Desautels.

 

EstablishedEvolving Desautels McGill Renovated library

The Desautels Faculty of Management recently renovated McGill University’s old bookstore into
its Donald E. Armstrong Building, home to its master’s programs. The modernized building sits
in the heart of historic downtown Montreal.

 

Since its founding, the school has increased its disciplinary emphases from two to ten. That growth culminated in the creation of the Marcel Desautels Institute for Integrated Management, which encourages faculty to cross disciplinary barriers. At each stage, “we have evolved to meet the management education needs we are currently facing,” explains Bajeux-Besnainou.

To keep its programs nimble, the school’s faculty also pay close attention to “sectors of business that are shifting the fastest,” says Bajeux-Besnainou. In 1996, for example, the school collaborated with McGill’s schools of medicine and engineering to offer a joint MD/MBA program and a master’s in manufacturing management. It recently expanded its entrepreneurship programs to include several interdisciplinary minors.

In November 2018, it opened the Bensadoun School of Retail Management, which will house a retail lab that integrates disciplinary areas such as big data, neuroscience, sustainability, and law. The next frontier for Desautels, says Bajeux-Besnainou, is likely the development of more online and blended offerings, an area of education also currently experiencing swift change.

McGill University is preparing for its 200th anniversary in 2021, and Bajeux-Besnainou wants to ensure that Desautels one day reaches that same milestone. “At Desautels, traditions have never been an impairment to innovations,” she says. “Our tradition of research translates into innovation and entrepreneurship.”

'FIRST-MOVER’ STRATEGY

For many business schools, longevity has been the result of a willingness to experiment. That is likely the case at the Kelley School of Business at Indiana University in Bloomington. Set to celebrate its centennial in 2020, the business school can trace its spirit of reinvention to that of its parent university, says its dean Idalene Kesner. She points to the number of “firsts” throughout the university’s history. In 1867, Indiana University was among the first U.S. higher education institutions to admit women; in 1895, it was among the first to admit African American students. It also brought the Kinsey Institute to campus in the 1950s, a time when opening a center that studied human sexuality was highly controversial.

“I am very proud of the way IU operates,” she says. “As my father used to say, ‘The apple doesn’t fall far from the tree.’”

The school’s history became a focal point a couple years ago, when faculty underwent a maintenance of accreditation review from AACSB. As part of that process, administrators and faculty had to answer the question: “What differentiates the Kelley School of Business from other schools?” It was a difficult question to answer, says Kesner, because many business school deans and faculty believe their schools offer the best courses and produce the best research.

 

Original Kelly Building

Kelley Hodge Hall

Completed in 1966, the Kelley School’s original building (top) was designed by architectural
firm Hall-Kane & Associates in what many believe was a deliberate effort to resemble the keypunch
cards that supported early computer systems. Kelley’s original building is now part of the school’s
newly constructed Hodge Hall Undergraduate Center (bottom).

 

“What stood out to us was that, over our school’s history, we have always been a first mover or an early mover,” she says. For example, she points out that the Kelley School launched its online MBA program in 1999, ahead of most of the market. The school was among the first to integrate its core curriculum across disciplines, and one of the first public business schools in the U.S. to adopt responsibility-centered management, in which each department or unit oversees its own budgeting processes.

Kesner points to a course at the Kelley School that she believes well illustrates the school’s evolution over time: The Computer in Business. It was first offered in the 1960s as a required course, at least a decade before the first desktop computers had made their way into businesses. Today, The Computer in Business is still a required course, but it has evolved to teach students everything from Access and Excel to simulations to the impact of technological innovation on society.

Business schools with longevity do not fear jumping in first, Kesner emphasizes, but they also never stop making adjustments to keep courses like The Computer in Business relevant to new generations. “It’s surprising how many elements have stayed in our curriculum,” she says.

BUILDING BRIDGES TO BUSINESS

It has become customary for business schools to cultivate strong relationships with companies as a way to bring in practitioner perspectives and real- world projects for students, provide executive training, support research, and secure funding. But while those elements are vital to business education, it might be the ongoing feedback from companies about emerging trends and future challenges that truly keeps mature business schools young.

At IU Kelley, this feedback comes from regular brainstorming sessions with corporate partners. Says Kesner “We don’t ask them, ‘What are your needs going to be next year?’ because we’ve got that handled. We ask, ‘What are your needs going to be in five years?’”

Because executives might find that question difficult to answer, the school’s faculty looks for ways to help them work through the problem. “We say, ‘Let’s imagine artificial intelligence and machine learning. Here’s the list of jobs that companies recruit for now—mark off everything you think isn’t going to exist in five years,’” says Kesner. “Then, we talk about what jobs they think will exist, so we can develop our curriculum for those jobs today.”

 

Established Evolving  ESCP Europe Entrance
The entrance to ESCP Europe’s main campus in Paris.

 

Established Evolving ESCP Europe Today 1

The modern design of ESCP Europe’s recently opened second location in the Montparnasse
area of Paris contrasts with the historic architecture that characterizes its main campus.

 

At ESCP Europe, practitioner perspectives flow into its curriculum via formal company-funded chairs and professorships, described on the school’s website as “a privileged space for reflection and sharing, allowing a company to pass on its expertise, and support research and teaching activities in specific fields of activity or professions.” Chairs refer to units that design and deliver topic-specific educational programming with the help of their corporate sponsors. Professorships are held by faculty who primarily conduct research.

ESCP now has nine chairs and two professorships. Among them are a chair in the factory of the future sponsored by tire manufacturer Michelin, one in industrial relations and firms’ competitiveness sponsored by aeronautics company Airbus, one in international corporate governance sponsored by accounting firm KPMG, and one in the circular economy and sustainable business models sponsored by the accounting firm Deloitte. Professorships, too, provide content for the curriculum: For example, the L’Oréal Professorship in Creativity Marketing puts students to work on projects from the cosmetics company. Through these relationships, students provide companies with fresh perspectives, and the companies suggest ways that the school might improve its programs, says Bournois.

Companies also co-design customized executive education offerings. For instance, NetExplo Observatory, which studies the impact of technology on business and society, collaborated with ESCP faculty to create a Digital Transformation Facilitator certificate program. Most recently, French alternative energy company Engie, along with the student body, has been pressing the school to do more to promote sustainability in its curriculum and operations. In response, Bournois is considering the creation of a new department of sustainability.

“It’s always been a tradition at the school to bring in people who make those bridges between industry and academia,” he says. “You cannot build a bridge across a river with just a few stones. We must bring in people with the time, energy, and passion for teaching, but who are not full academics.”

HINDSIGHT AND FORESIGHT

It might be too easy for administrators and faculty at long-lived business schools to believe their institutions have the advantage over newer providers in their markets. But business schools must avoid that mindset at all costs, says Bournois. He stresses that all business schools must fight against “negative entropy”—the state of becoming too reliant on order and routine. Business schools that allow routine to become the norm, he warns, will not survive.

Instead, schools should embrace the mindset of “constructive dissatisfaction, in which we never believe that we have achieved perfection, that we are there and done. Even negative feedback helps us move forward,” he says. “As a dean, I love to always balance hindsight and foresight. It’s very important for us to reflect about the past and our legacy, but we also must try to predict, anticipate, and explore what is going to happen next.”

Talavera of ESAN adds this advice: Modesty is key. “It’s terrible if you believe that because you are so big, you are the best,” he says. “Sometimes when I am on a peer review team visiting small schools in Argentina, Brazil, or Colombia, I see what they are doing and I believe we can learn from them.”

Kesner of the Kelley School advises a practical approach to keeping programs nimble: Stay open to innovation, but continually measure results and make adjustments along the way. “We’re a state institution, and resources are very precious to us,” she says. Whether it’s a degree program, extracurricular initiative, or global partnership, if something’s not working, “we’re not going to just live with it.”

That’s why at least once every three years, Kelley faculty form a task force to evaluate how well undergraduate and MBA programs are serving both students and employers. They do the same for the doctoral program at least once every five years. The school also has metrics in place to help faculty determine whether a new program is meeting their objectives, so that they can decide whether to move forward with it, change it, or phase it out.

Kesner believes that it’s this balance between first-mover experimentation and long-term practicality that has contributed to the Kelley School’s success—and might explain why many established business schools grow more, not less, experimental with age. “The causal arrow goes both ways,” says Kesner. “Being an old business school gives us the right to step up and be innovative, but being innovative keeps us in the game.” 

 

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