An International Marriage of B-School Giants
It's often said that two heads are better than one. Now the two top B-schools in BusinessWeek's annual ratings are embracing the concept in a joint effort that will span the world.
The Wharton School of the University of Pennsylvania -- No. 1 among U.S. schools -- and INSEAD, with campuses in France and Singapore, and No. 1 on the international list, have decided to forge an exclusive alliance. They'll connect their existing programs so that students and faculty in MBA, PhD, and nondegree executive-education programs can tap global resources in person or via technology.
For years, B-schools have forged limited alliances, but the top schools have refrained from linking more than a few classes or single programs. With this alliance, Wharton and INSEAD are setting a new standard. Says Wharton Dean Patrick T. Harker: "We're both big enough to take a little risk." As Harker explains, citing the way successful companies look to innovation for a winning edge, "We're trying to shake our [business] up."
The goal is to merge the knowledge base of the two schools' faculties and increase the flow of information to alumni and corporate clients through their online knowledge portals, which the schools are merging. More channels to reach working professionals should let the schools experiment with the concept of "lifelong learning" -- continuing to influence managerial thinking both during, and after, MBA and executive programs.
They'll also create new programs. "We want people to start thinking of the world as a whole, and that won't happen by just slapping a degree together [with another B-school]," Harker says. For that reason, Wharton and INSEAD have agreed to establish a center for global research and development, which is already awarding $10,000 seed-money grants to faculty members researching new curriculums. The schools hope to fund the center with donations from alumni and companies. Revenue will be split down the middle.
The partnership was actually Wharton's idea. The school approached INSEAD in August, 2000. After a yearlong strategy study in which a dozen other schools were considered, INSEAD made the most sense, Harker says. That's because the two could share campuses in Fontainbleau, France, Singapore, Philadelphia, and in San Francisco, where Wharton plans to set up shop campus this fall (see BW Online, 12/14/00, "Wharton's Invasion of the Bay Area B-School Scene").
Last October, Gabriel Hawawini, dean of INSEAD, told BusinessWeek that he was considering a move into the Americas -- but probably not for three more years (see BW, 10/2/00, "A Global Report Card"). Now he explains that plans were accelerated when opportunity knocked. "Had Wharton not worked with us," Hawawini says, "they would have worked with someone else."
The relationship opens the doors of international classrooms to Wharton's 800 MBA students and INSEAD's 726. Beginning in the fall of 2001, MBAs will be able to spend seven weeks attending for-credit classes at any of the partnership's worldwide campuses. They will also be able to take advantage of each campus' access to local recruiters. The 180 PhDs at Wharton and the 52 at INSEAD will share courses, which could save both schools money. But with these B-schools, each with its own extraordinarily healthy endowment, cutting costs isn't really the point.
The schools' executive programs, which already rake in about $40 million each in annual revenues, expect to produce joint courses that neither could have run on its own. The alliance is also a way to tap into the other school's base of custom executive-education clients, such as ABN AMRO, France Telecom, and Nokia at INSEAD. Hawawini says that INSEAD has limited corporate clients outside Europe.
Corporate executive-education honchos see such alliances as the way of the future. Sergio Serrano, director of human resources in the corporate offices of Mexico's Cemex, an international concrete company, spends as much as $30 million annually on postgraduate programs for his company's 200 executives worldwide. "We don't only want the Americanized business perspective taught to our executives," he says. "We need the perspectives from people from Europe, Asia, and Africa, so that we [impart] a wider business mission to the entire organization."
As it is now, 90% of Cemex executives go through U.S. B-schools because that tends to be where the best education is, he says. Hawawini sees the possibilities: "Now we're saying, 'Talk to The Wharton-INSEAD alliance.'... We can offer classes in four locations and maintain a certain standard of quality."
Other B-schools are right behind. Columbia Business School and London Business School will begin running their EMBA-Global MBA executive programs together in May, with two open-enrollment, nondegree programs -- one taught in London, the other in New York (see BW Online, 5/1/00, "The $100,000 Executive MBA Program"). The two also plan to share custom executive-education work.
New York University's Stern School of Business, HEC Graduate Business School in Paris, and London School of Economics are also co-producing TRIUM, their version of a global executive MBA program this September (see BW Online, 10/6/00, "These B-Schools Make Headway by Consorting With the Competition").
More announcements are on the way. The University of North Carolina, Chapel Hill's Kenan-Flagler B-school is set to announce a five-school international linkup in April. Says Kenan-Flagler Dean Robert Sullivan: "In a sense, the only thing that [will] separate us will be geography." The schools will connect classes via technology worldwide and will co-produce several executive programs.
All this puts the pressure on other B-schools to get in on the action. Says Dean Sergio Raimond-Kedilhac of IPADE in Mexico City: "It's not easy to establish relationships with schools at higher levels on the rankings. They are guarded and want to protect their brand names." He's hoping to find a U.S. partner, noting that IPADE's selling point is its understanding of doing business in Mexico.
INSEAD and Wharton appear to be in this for the long haul. Inked into the agreements is a right of first refusal, so if either plans a new global program, each would first have to consult with the other. Both deans also say they expect to someday offer a joint global executive MBA program (INSEAD offers only nondegree executive education). And "maybe," the Alliance will eventually offer degrees as a single institution, rather than simply sharing resources, says Hawawini. "Wharton would find it difficult to enter into something tighter [than the alliance] as an organization," he says. "For us, it would be easier, [but] I personally can't see it happening anytime soon."
Fair enough -- but don't forget that Hawawini said much the same thing in October about forming an alliance.
By Mica Schneider in New York
Edited by Douglas Harbrecht