Issue Focus: The Global Manager
Around the World
How HBS embraced globalization and transformed its research and teaching
HBS celebrated the opening of its newest classroom in early March—in Mumbai, India. The 82-seat amphitheater-style facility, modeled after those on campus, is the new home for an expanding roster of Executive Education programs offered to Indian business leaders. Days after the official opening, seats filled with eager participants in a program titled Building a Global Enterprise in India.
To borrow from that title, the Mumbai classroom represents the latest step in a two-decades-long journey that could be called “Building a Global Curriculum at HBS.” What began on a modest scale in the mid-1990s has more recently, under Dean Nitin Nohria, taken on greater significance and urgency. Shortly after becoming Dean two years ago, Nohria made advancement of the School’s international strategy one of his top five priorities. “Today, HBS would be derelict in its mission if it weren’t preparing the leaders it educates to succeed in a global context,” says Nohria.
How times have changed. Perhaps no one is more acutely aware of the School’s global journey than Professor Krishna Palepu, who arrived on campus in 1983. At the time, “most of the curriculum was based on materials that were developed using US company experiences in the US context,” recalls Palepu, the Ross Graham Walker Professor of Business Administration and senior associate dean for International Development. “More importantly, in an insidious way, we never acknowledged that the concepts and theories we were teaching students really were based only on US data. We were teaching them as if they were universal theories.
“So we taught, this is how you distribute products, this is how you price them, this is how you brand them, this is how leadership is optimized, this is how you design organizations, and this is how you motivate people. Take any subject, they were all grounded in US-based scholarship.”
Looking back, that approach now seems quaint. “But it was the right approach for the time,” says Nohria, who joined the faculty in 1988 and, like Palepu, is a native of India. Writing in the Sept./Oct. 2011 issue of Harvard Magazine, he noted, “In the 1980s, the best companies, the best management practices, and the best jobs were in America. People like me who were born in places like India and came here to study didn’t plan to go home.”
What a difference a few decades have made. Tectonic shifts in geopolitics and business have profoundly reshaped thinking about management education. China, under Deng Xiaoping, embraced market capitalism and has transformed itself from a poverty-plagued backwater to an economic powerhouse now ranked second only to the United States in GDP. The Cold War abruptly ended when the Berlin Wall fell and the USSR fractured into 15 sovereign states, many of which have embraced some version of free markets. India, Brazil, and other developing nations shook off decades of economic stagnation to achieve remarkable growth. Concurrently, world trade advanced to the point that capital and products now flow freely around the globe.
All these changes powered an explosion in global creativity and transformed opportunities for MBA graduates. “It became clear that innovation was no longer taking place only in the United States, and that there were different kinds of innovations in different places,” says Palepu. Beginning in the late 1980s, Japanese innovations in product development and quality attracted considerable research attention from several HBS faculty members, including Bob Hayes and Kim Clark. And as developing economies took off, “students could no longer be counted on to spend their entire professional careers in the United States. More importantly, even US businesses began developing global value chains and global competitors. And recruiting itself became global,” notes Palepu.
As the nascent globalization process picked up steam in the 1990s, HBS began to grapple with its implications for the MBA Program, says Palepu. “We started asking, how do we respond to this kind of change in the world? And how do we make sure that our students, when they graduate, are equipped to operate in a global world?”
Out of that questioning emerged a strategy that remains unique among US business schools. Beginning in the mid-1990s, HBS set out to develop a network of research centers around the globe. “Change had to start with our faculty research,” explains Palepu. “If we don’t have theories that are more globally robust, and materials that are developed using multiple contexts, and innovations that are captured wherever they’re happening around the world, we won’t be able to teach our students to be effective in a global world. So that’s where we had to start.”
Today the School has seven research centers that facilitate faculty research and case development in Hong Kong, Tokyo, Shanghai, Paris, Buenos Aires, Mumbai, and Palo Alto. Palepu calls them “embassies of the School in terms of making connections around the world, being the faculty’s eyes and ears to know interesting things that are happening.” Building on their success, the School plans to open a center in Istanbul later this year and in London as soon as next year.
It’s a strikingly different approach from that taken by other business schools, where global strategy typically has meant setting up classrooms or campuses abroad and teaching more students the same material offered in the United States, says Palepu.
But HBS went the other way. “We said what we know is no longer valid in a globalized world, and we need to learn more before we teach,” explains Palepu. “So let’s invest in making it easier for our faculty to learn more about what’s happening elsewhere. Producing intellectual capital became the first phase of the School’s globalization effort. That’s the genesis of setting up the research centers.”
The strategy behind the research centers has remained steadfast, says Nohria. “We decided to chase knowledge around the world and bring it back to our classrooms in the form of cases and other research,” he says. “That strategy has served us well and will remain the foundation of our global efforts.”
The investment has paid dividends. While international discussions once were largely confined to the required Business, Government, and the International Economy (BGIE) course, today students are challenged to think about different countries and different business contexts throughout both years of the MBA Program. Twenty-eight percent of the cases taught in the first-year Required Curriculum and 38 percent of cases in second-year electives are globally focused. And global research continues to increase. Last year, over half the new cases and 40 percent of all faculty research had a global focus and setting.
Injecting more international material into the classroom has had a profound effect on case discussions and learning, says Palepu. “We underutilized the global diversity of this community when the entire curriculum consisted of only US cases. All the international students were silenced because they just thought, ‘Well, this is how the cutting edge works,’ ” he recalls. “But today classroom conversations are very different from 25 years ago. Some of that results from new materials, but some is because we’re empowering foreign students to bring their backgrounds into classroom discussions.”
For a school that pioneered participant-centered business education, removing barriers to engaging foreign students in class discussions was a clear win for faculty and students, says Senior Associate Dean Youngme Moon, the Donald K. David Professor of Business Administration and chair of the MBA Program. “The faculty can deliver only a fraction of what our students end up learning because so much of what they learn, they learn from each other.”
From campus to FIELD
While HBS went about building its global footprint, the community itself changed. Since Palepu joined the faculty in the early 1980s, the percentage of faculty born outside the United States has risen from 19 percent to 42 percent. And the percentage of students holding non-US passports has risen from 20 percent to 34 percent for the Class of 2013.
With more faculty and student diversity, and more international context in courses and cases, the MBA experience itself shifted toward a more global perspective. “Students now develop a keen understanding and sensitivity to the different challenges and opportunities associated with different global contexts,” explains Moon.
Still, something was missing. To develop a truly global mindset, students needed more than classroom experience. “We had to put them in situations where they’re able to practice the ideas and concepts that we teach in the classroom,” says Moon.
That’s where the global component of the new Field Immersion Experiences for Leadership Development (FIELD) course comes in. A yearlong required course, FIELD is designed to hone first-year students’ skills in leadership, global understanding, and integrative thinking through team-based experiences. Students began the global component, called FIELD 2, last October when they were divided into teams of six, assigned a global partner—one of 140 participating businesses and nonprofits—and challenged to develop a product or service appropriate for consumers in the partners’ developing markets. FIELD 2 culminated in January, when nearly the entire class of 905 traveled to one of 12 cities in 10 countries for a weeklong immersion to test their ideas in the local marketplace, make adjustments as needed, and deliver a final proposal to their global partners.
Putting students in the field and challenging them to apply what they have learned in the classroom is a logical extension of the School’s vaunted case method, says Moon. “The case method is so powerful because it is such a close proxy for decision-making in the field,” she explains. “But we realized that we’re now at a stage where we are capable of going beyond this proxy to actually putting students into the field.”
Was FIELD 2 worth the time and expense involved? No question about it, says Professor Felix Oberholzer-Gee, who led the faculty team that designed the FIELD 2 curriculum. “There’s something fantastic about this pressure cooker that is created by knowing you arrive on Sunday, and your final presentation to your global partner is on Friday. It involves not sleeping much for the week, but the intensity of the experience is part of what makes it memorable, interesting, and worthwhile,” says Oberholzer-Gee, the Andreas Andresen Professor of Business Administration and chair of the MBA Global unit.
Already, the immersion experience has had a positive effect on classroom discussions, says Moon. “After we returned, the students in one class had a case set in India. In the past, students from India emerged as the experts in class discussions. This year was a very different dynamic because now we had students who had just traveled to India, and they brought a different kind of global perspective from that of the Indian students. So the discussion that resulted from the mix of experiences was much richer than in the past.
“Now multiply that by all the conversations in all the case discussions enriched by student immersion experiences, and what you get is much more depth in how students engage and learn from each other.”
Over the long haul, Oberholzer-Gee expects students will remember several key lessons. First, they learned how to gather information in the field about customer preferences for new products. Second, they learned how to function as a team to bring out the best in everyone (something they practiced in FIELD 1). Third, they learned a bit of humility by discovering that ideas that work back home may not work at all in another place. “If that’s a lasting memory, it will be a big and important contribution to their education,” he adds.
The same positive effects can also be expected for second-year students who participated in the faculty-led Immersion Experience Program (IXP). This year, 116 students traveled with faculty to one of six countries during the January Term for 12 days of field project work. While the IXP program has been in place since 2005, this was the first year that students received academic credit, signaling the School’s recognition of the program’s academic rigor.
“Our goal with FIELD 2 and the IXP excursions is not only to enhance our students’ experience,” explains Nohria, “but also to improve how management is taught. This is what HBS originally did with the case-study method, pioneered here in 1922 and which today is used universally. It’s time to do the same with managerial field training.”
Executive Education’s global mission
MBA students aren’t the only beneficiaries of the School’s expanding global mission. As evidenced by the new Mumbai classroom, Executive Education programs also figure into HBS’s global strategy. This year the School is offering 23 programs in locations outside the United States, including 7 in India and 9 in China, up from only 4 such programs a decade ago.
Historically, more than half of the participants in many Executive Education programs have come from abroad. “So the programs have always been inherently global in that sense,” notes Palepu, who serves as faculty chair of the Global CEO Program for China. “But we taught the same things in those programs that we did in the MBA Program—cases built on the experience of American companies.”
That began to change several years ago, partly in response to pushback from participants who questioned why their programs did not include more global material. “More importantly,” says Palepu, “we realized that Executive Education programs are a great way for us to test how valid our international materials actually are. Part of the reason we started offering programs in China and India, and in other places around the world, was to have our faculty test the validity of their ideas in front of savvy local business audiences.”
Palepu cites an example involving a case he cowrote on the Haier Group, a Chinese multinational manufacturer of home appliances and electronics. “If I brought that case into a US classroom where no one had ever heard of Haier, it might sound really good. But if I taught it in China to CEOs of Chinese companies, which I have done, I would quickly learn whether it reflected a deep understanding of what was happening. So Executive Education programs abroad help us to test the depth of our knowledge.”
Challenge of a global century
HBS has made a lot of progress over the past two decadesin developing a more global curriculum for MBAs and Executive Education participants alike. The “thoroughly American” institution Dean Nohria describes upon his arrival in 1988 has evolved into an institution striving mightily to adjust to the realities of a new global century.
“This has profound implications for the types of students we admit, what we teach them, and the careers they choose when they graduate, as well as for our faculty members and their research,” says Nohria. Through the School’s expanding commitment to international research and its innovative approach to field-based student learning, “we seek to provide experiences for our students and Executive Education participants that are unmatched in global breadth of analysis and understanding.”