Business Schools are all about Business, says Bertrand Guillotin

If you follow business school news, you know that in recent years, the difficult economic environment has created not only challenges but also opportunities for business schools.  While they are not all born equal, the best business schools have followed an opportunity-driven strategy and have seen an increase in applications while their overall market is consolidating. 

When recent Bachelor’s graduates can’t find jobs (or when mid career executives have lost theirs), they realize after a brief reality check that getting more education might be adding a much-needed edge to their professional background. 

While this influx may slow down when things get better (the ones who stayed employed convinced themselves that specialized business education was not necessary after all - a common mistake), this cycle comes and goes. 

The global financial crisis that we have been experiencing since 2007 may be a cycle.  However, it is fundamentally changing the world in many ways.  Some will argue that economic indicators (e.g., Gross Domestic Product) prove that we are out of this crisis, coined the “great recession” in the U.S.  Nonetheless, millions of jobs have been lost, forever. 

Fundamental paradigm shifts are happening.  They include the transfer of power from Western countries to Asian countries, even a new phase of globalization perhaps during which we all aim to coexist better and use our resources in a sustainable way, finally.  Clearly, we are all more interdependent than ever.  The excesses on Wall Street have affected Main Street and not just in the U.S. but also in Iceland, Greece, and China.  In 2009, the H1N1 (swine/Mexican flu) also reminded us clearly about the fact that we all face the same challenges and those simply do not stop at the border. 

With all these impacts, some business schools also went through their own reality check.  They implemented what they have been teaching for so long.  

Over the past few years, many world-class business schools have either expanded globally faster than ever or have merged with peers.  They have created institutions with unprecedented global reach and also unprecedented research potential. 

Why did they wait for a crisis to do this?  In a way, some may have needed the crisis to be forced to go through this (painful as it is) reality check.  Others knew that trying times are building times.  Companies or institutions that are either created or reinvented during trying times leapfrog their competition once things get better.  To be more specific, in 2007, two of Australia’s most esteemed business schools (AGSM and the University of New South Wales’ Faculty of Commerce and Economics) merged to form the Australian School of Business.  Two years later, Melbourne Business School (MBS) merged with the University of Melbourne.  Also In 2009, France’s CERAM business school and ESC Lille merged to create the largest business school in France, named Skema, and continued to rapidly expand internationally.  Last but not least, in 2010, Aalto University was formed in Finland by bringing together three Finnish universities: The Helsinki School of Economics, Helsinki University of Technology, and The University of Art and Design Helsinki. 

Merging or expanding is a real challenge.  Costs can rapidly increase in the short-term before economies of scale and new world-class research can materialize, not to mention the cost of building new campuses.  In the meantime, such phenomena provide a rich environment for all involved, especially the students who are learning at these institutions. 

If we believe that education provides a strategic edge and enable people and organizations to flourish, then the best place for any advanced learner is where risk is taken, where boundaries are reconsidered every day, where “impossible” or “never been done before” are phrases absent of the conversation at these institutions of higher learning. 

The world as it is - and the world of business especially - is becoming more complex every day.  Solutions to problems cannot be found by mastering one discipline only.  CEOs must rely on international networks to remain relevant.  Their judgment and decisions cannot be made using one area of expertise alone.  They also need creativity, the ability to improvise and to build trust in others by doing well and doing so consistently over time, anywhere in the world. 

If anyone is interested in business or business education - the two are interdependent in my opinion - then the best place to learn the most is at a business school that has been following an opportunity-driven strategy.   

Bertrand Guillotin is P.I.M. Chair for North America and Director of the International Center at Duke University’s Fuqua School of Business, Durham, USA