1. Copyright 2006 © by IMD International, Lausanne, Switzerland Not be used or reproduced without permission Building an International Strategy for the Academic Institution – Role of the Rector/President EUA Leadership Seminar Lausanne, June 12, 2006 Dr. Peter Lorange, President, IMD The Nestlé Professor

2. 2 PL-EUA Leadership Seminar Dr. Peter Lorange, President A very competitive world for academic institutions, when they aspire to be on top internationally: Thought leadership is needed today for global success – provided through research! From: Supply-driven philosophy Shaped after the tradition of A. Von Humboldt's University, 1800 Axiomatic; discipline-based To: Demand-driven philosophy The demands of the customer* – eclectic, cross-disciplinary! – Student – Executive – Companies – Society * An intentional error: It is Learning Partner, not customer. The two-way relationship among equals is key!

3. 3 PL-EUA Leadership Seminar Dr. Peter Lorange, President We were ranked #2 worldwide in executive education (FT, 15 May, 2006), and #1 worldwide in MBA (FT, 20 January, 2006 – based on FT, WSJ, Forbes and Economist) Self owning foundation. Not-for-profit Independent; not part of a university Annual turnover (2006 estimate): Sfr. 105 Million No debt; no financial allocations from federal, cantonal or local governments 55 professors (full-time, 28 nationalities); 250 support staff employees (25 nationalities) In my comments, I shall draw on IMD, a leading graduate business school located in Lausanne

4. 4 PL-EUA Leadership Seminar Dr. Peter Lorange, President 51% from Europe 19% from the Americas 26% from Asia 4% from Australia / Africa From 76 nationalities! IMD is very international

5. 5 PL-EUA Leadership Seminar Dr. Peter Lorange, President 1. Real World – Real Learning Practical focus for learning Based on thought leadership – 26.9% of IMD’s expenses go into Research and Program development A clear business trend: More facts-based! More “minimalistic”! – The teaching programs must reflect this To speed up the transformation from research to program delivery is key! Pedagogical focus – very strong Our Faculty must be of top quality-world class! Our strategy – to achieve global leadership – is highly focused – based on 4 pillars

6. 6 PL-EUA Leadership Seminar Dr. Peter Lorange, President And, this means : to be successful internationally, one must integrate new research insights fast. How? International success thus implies: Flexibility of smaller programs e.g. One-section programs – with no coordination across sections? Risk – taking by faculty Avoid mechanistic student feedback – no “popularity competition”! Faculty reviews Research and Teaching progress / outputs (as opposed to “plans”!)

7. 7 PL-EUA Leadership Seminar Dr. Peter Lorange, President And, international focus means a shift towards more action – learning and action – research! Urgency! Real strategic issues Direct impact on strategies A consequence: Different dissemination channels for research to get global reach – the process with the refereed journals takes too long! Research monographs Edited books Web-casts (our weekly webcast is “seen” by 23000 executives, worldwide)

8. 8 PL-EUA Leadership Seminar Dr. Peter Lorange, President 2. The Global Meeting Place Executives from all over the world learn side-by-side at IMD Focus on dilemmas, not “right/wrong” answers Cross-cultural insights are thus key! A clear business trend: Growth of Asia New Research Centres – Shanghai – Mumbai – under establishment Growth in Americas – Latin American Research Center under planning Our strategy – continued:

9. 9 PL-EUA Leadership Seminar Dr. Peter Lorange, President 3. All learning is lifelong learning IMD’s learning network 175 companies, plus all alumni Wednesday Webcasts, 4PM Lausanne time – Live – Interactive – Q&A – Professors with thought leadership – Guest CEOs and top executives with ideas to share across the Network – Pragmatic Learning – More than 21 thousand executives now accessing –Directly from their PCs –Or in team-based learning environments –In corporate university settings – Clear business trend: Lifelong Learning must go on at work-place Our strategy – continued:

10. 10 PL-EUA Leadership Seminar Dr. Peter Lorange, President 4. A minimalistic internal organizational structure, and customer – focused processes No academic departments – no silos No title / seniority hierarchy No tenure Market-driven internal processes: – Bonus Clear trend: The large, diverse business schools are not doing as well as the smaller, focused schools. Power of “boutiques” / elite! Our strategy – continued:

11. 11 PL-EUA Leadership Seminar Dr. Peter Lorange, President Results in Revenues so Far: Positive 20 30 40 50 60 70 80 90 100 2002 Revenue (Mio SFr.) 19911992199319941995199619971998199920002004 96 2003 88 81 84 20012005 98 1990 2006 Budget 105 (Note: With more or less the same faculty size. Higher value offerings. International penetration)

12. 12 PL-EUA Leadership Seminar Dr. Peter Lorange, President Global Marketing is key! IMD has a full time marketing field force of 12 – Latin America/Iberia – North America – Africa/ME/India – SE Asia/Australia – China – Japan – France/Italy/Belgium – Netherlands (part time) – Germany/Austria – UK/E. Europe – Nordic – Switzerland – Also, global data bases – Global alumni activities – 44 clubs, worldwide

13. 13 PL-EUA Leadership Seminar Dr. Peter Lorange, President Question 1: A. The leadership teams of the university and the business school should sit down – say, over a week – a retreat – and work it out. Get the facts out! Stress the suboptimal consequences of treating the business school with too much constraint re. appointments, promotion, maintain jurisdiction over its funds, etc. What about if your business school is part of a university – and there is a conflict between the actions of the university and the preferred actions of the business school?

14. 14 PL-EUA Leadership Seminar Dr. Peter Lorange, President Question 2: A. Based on thought leadership A high proportion of an institution’s expenses must go into Research and Program development And, practical enough to have a link to learning The R&D must rapidly – and continuously – go into teaching programs – to ensure cutting edge/relevance The teaching side then also gives valuable feedback, that further refine the research agenda Grounded rationality! How can Strong Research Commitment be achieved today?

15. 15 PL-EUA Leadership Seminar Dr. Peter Lorange, President Question 3: A. Many business schools have large structural challenges, which make it difficult for them to live up to the modern challenges they are facing today. I recommend, therefore, a “minimalistic” structure: no (or a few only) academic departments no professional title hierarchy no tenure How to achieve more cross-functional research, with more speedy dissemination of the research results?