IMD is unusual among the top tier of global business schools in that it does not run any PhD or graduate programs, but focuses almost exclusively on executive education – serving a market that is mainly post MBA, experienced, and with an average age of 42.
Dominque Turpin, IMD’s president since 2008, compares this need for exclusive focus to Formula One. As an F1 team employs specialist engineers and drivers to refine, perfect and race its cars. So for IMD to be a prime provider of executive education everything must be geared to this end. As cars from Le Mans or Indianapolis will not succeed in Formula One, so learning strategies that are right for MBA courses will fail at executive level. And as F1 drivers are a special breed so too are professors able to succeed as executive educators.
Based on Lake Geneva at Lausanne in Switzerland, IMD is one of the world's premier business schools; its open programs being ranked first by the Financial Times for four consecutive years from 2012 to 2015 and its custom programs always ranked high in the top ten.
The school was formed in January 1990 through the merger of two independent management education centres, one originally established by Alcan (now part of Rio Tinto), and the other by Nestlé. The new organization, IMD (International Institute for Management Development) has from its inception reflected this industrial and commercial provenance, a heritage that sets it apart from other leading business schools which are mostly university-affiliated.
With this background IMD prides itself in being run like a business, rather than as an academic institution, and there are no academic departments, just one integrated multidisciplinary faculty. The professors do not have permanent academic tenure but work under 3-year contracts and a performance based pay package. The faculty consists of 50 full-time members, made up of 23 different nationalities. Every year, some 9,000 executives, representing over 98 nationalities attend one of IMD’s programs.
Dominique Turpin is now focused on the future. At a time of rapid change in the business world (change he exemplified by quoting the recent unheralded collapse in global oil prices and the surprising rise of Donald Trump), he believes that all business schools, IMD included, need to adapt and change their own aims and methods to be sure they remain relevant. The major driver of the changes that business schools face comes from their need to keep up with the sophisticated demands of their clients. Clients, who are still affected by the shockwaves of the 2008 downturn, and so wary of expenditure on marketing or training, demand that any executive education initiatives truly demonstrate impact and ROI.
Unless business schools adapt clients will look for alternatives and may readily turn to consultants and other sources for their business and people development needs. To some extent this is already happening. Turpin quotes as an example the fact that when IMD won the contract to revamp the executive education provision for GE Crotonville (GE’s global leadership institute) it later discovered that the two other organizations shortlisted for the role were not IMD’s traditional competitors – other top tier business schools – but two consultancies. The answer to why these two organizations had been on the shortlist was that they were seen by GE to be more practical, pro-active and fast-moving than some of the academic institutions that might have been selected.
As another example, when asking advice from Nestlé who they might recommend to IMD for a senior chair in the area of digital marketing, rather than suggesting someone from an academic institution they said they would work with people from Google, Facebook, or similar as academics were moving too slowly. In fact ‘digitization’ was not yet a standard part of business school curricula – although IMD got a head start in this area with its Global Center for Digital Business Transformation in partnership with Cisco.
To prepare for the future Turpin sees two significant challenges for business schools. First securing professors whose research and teaching abilities are relevant to the business environment as it is fast emerging today and who can have a significant impact in the business world. Secondly to develop competitive business school offerings that are more relevant and impactful than the engagements provided by the consultancy practices and others that are entering the executive development space.
The first of these challenges is exacerbated by the current pervasive model whereby academic tenure and opportunity for career progression amongst professors is not determined by how their work is helping business innovation, economic growth or leadership development, but almost entirely by how often they are quoted in specialist academic journals. In fact how they relate to and communicate with other academics is valued more highly than the impact they are able to make in the real world.
According to Turpin, “Speaking one-to-one to deans [of other business schools], they all agree that the tenure system is obsolete… But don’t expect it to change any time soon.” In fact the tenure system is spreading internationally as new institutions in China and Brazil are hiring US and European educated professors. Furthermore journals, such as one where Turpin himself sits on the advisory board, that have set out with an intention to address a business as well as an academic audience have become increasingly academic and low circulation.
As far as what the business world thinks about this, Turpin refers to his experience at last year’s World Economic Forum at Davos, where he had dinner with several prominent bankers and asked them “When was the last time you read a paper in an academic journal in the course of their work?” The reply was unsurprisingly not for years, if ever.
“Of course balance is needed. We do not now have to throw all academic research into Lake Geneva. But once an academic model comes to predominate it is hard to shift. No school goes from the academic to the practical – it is usually the reverse.” says Turpin.
What this means in the case of IMD is that finding faculty to join its Formula One team is its greatest challenge. Finding and retaining professors that are not only smart but are good communicators, committed to making an impact, customer-centric, values-driven, and able to communicate across cultures is key to the future development of the school.
The second challenge is to develop new business school offerings that meet the future needs of clients and can stand up to the competition from consultants. In this schools start with two advantages. The best schools are devoted to new research and to delivering teaching based on research. Their PhD educated faculty members have learnt the value of research to underpin learning. From this comes a further advantage for business schools – objectivity. Professors have no further motive than to deliver impactful learning. By contrast, as clients have confirmed to IMD, the consultants are not similarly neutral. Their core business – providing advice – is more lucrative than providing executive education and this will always skew their objectivity.
Before explaining the new approach to learning that schools now need to embrace, Turpin points to the traditional methodology that is no longer relevant: lecturing from notes to offer a prescriptive solution is no longer enough. In our VUCA (Volatile, Uncertain, Complex, Ambiguous) world professors must recognize that they do not have all of the answers. Consultants offer prescriptive solutions, but progressive business schools should provide environments that can help participants on their programs find their own solutions. The role of their faculty members is to facilitate discussion and to leverage the power of peer learning – according to Turpin at least 50% of learning comes from interaction with peers.
Turpin is unimpressed by most of the recent online incursions into executive education. He sees the rise of MOOCs as perpetuating the old model of knowledge-dump by lecture. Revealingly, 94% of MOOC participants fail to complete the course. TED talks which also suffer from people’s short attention span are only 20 minutes long. MOOCs do in theory offer the ability to spread learning to wide audiences, but Turpin is sceptical about the investment going into this “bringing Harvard to Africa” approach. It may enhance institutions’ reputations for CSR, but is not likely to be commercially viable, and the winners are likely to be big name personalities rather than business schools with limited brand awareness.
He does however believe in the potential for high quality blended learning and is proud of IMD's award winning Small Private Online Courses (SPOCs) which can be taken as part of a program or separately. The SPOCS run by IMD are known as Global Leadership in the Cloud Programs. Unlike MOOCs these courses are restricted to small groups and provide stimulating interaction and attention from professors and coaches. Their comparative success can be measured by the fact that 95% of participants complete the courses.
Key to making an impact as an executive educator is the ability to tell a story, and nowhere is this more the case than online. Creating a good online course is like making a movie. Professors with an average age of 52, used in the past to making presentations comprising numerous boring slides, can have difficulty with this and it may take a new generation to perfect really exciting online courses.
Speaking of IMD’s specific future development Turpin says “As a marketing professor for 30 years I am obsessed with differentiation – you must never just follow what the competition does.” Innovating to be different is essential. Counter-intuitively he says that the school benefitted from the high value of the Swiss franc following its delinking from the Euro in January last year amid the ongoing turbulence in the Eurozone. Suddenly IMDs prices made it less competitive, which forced it to innovate and propelled the changes that have greatly strengthened the current offering and the school’s outlook for the future.
Whereas the custom program side of the school is thriving, Turpin is concerned about the pressures on the open program side. Internationally there are just too many programs – in six recent months 120 new executive programs were launched in Asia. A process of commoditization has beset the business school sector, where MBA and EMBA programs are becoming simple commodities nearly indistinguishable from one another. He fears the same could become of open programs.
Furthermore the decision for an executive to attend an open program is increasingly moving away from the employer and being taken by the individual, albeit the HR department may be asked for approval. Consequently a different way to market programs is now needed that really captures their value to the individual. This value may not just be in the learning but in the overall experience. IMD has 50 professors but 300 staff in all, many of whom help in delivering great career enhancing experiences, as do the many events and hospitality professionals with whom the school has close connections.
Turpin highlights one recent example which illustrates both the school’s commitment to innovation and flexibility and its focus on delivering profound experiences. This was when IMD ran a one day ‘mega-dive’ for 600 executives to facilitate the transformation of two newly merged French railway companies into one united force capable of embracing the future and letting go of the past, an initiative that had been driven by a number of major recent challenges.
There was little incentive for the professors involved, other than a belief in the IMD approach, because working well outside their comfort zone, the potential to ‘screw up’ was great. In fact the event, which involved films and a jazz band and took 50 days to create, was a great success. Mega-dive participants representing all parts of the organization from senior executives to station masters and passengers were interviewed to set the scene. On the day there were no long presentations, or lectures, rather the aim was to generate ideas and contributions from all stakeholders to contribute to the transformation of the business.
This is just one example of how IMD is innovating new ways to deliver executive learning, in order to have a significant impact on its clients’ businesseses and its program participant’s careers. It is a sign of the type of approach we can expect to see in future.