One of the reasons for the European business school's success with the investment banking community has been the innovative direction it has taken under its dean, Carlos Cavallé, who has been responsible for its increasingly international outlook since 1984.
Directors of MBA recruitment programmes were dismayed to hear Cavallé's announcement on January 15 that he would step down from the position this summer. At 67, he is one of the longer-lasting business school deans.
But Cavallé's departure is unlikely to stop all interest cold, particularly as the business school is confidently expected to look for its next dean internally. Founded in 1958, IESE, known more formally as the University of Navarra's International Graduate School of Management, established Europe's first two-year MBA programme with the support of Harvard Business School. The MBA-course became bilingual in English and Spanish in 1980, giving its graduates the added appeal of offering fluency in another important European language.
Two thirds of the student body today come from overseas. Its entering class of some 210 students into a two-year course encounters some 35-40 different nationalities via its exchange programme. Every year around 50 IESE students are selected on a competitive basis to spend the first semester of their second year at a range of business schools which, in turn, send 50 students to IESE.
The exchange schools include the Columbia University Graduate School of Business, the Amos Tuck school at Dartmouth College, London Business School at the University of London, the Sloan School of Management at the Massachusetts Institute of Technology, and the Wharton Business School at the University of Pennsylvania, among others.
IESE's faculty, which amounts to 78 full-time and 38 part-time professors, is a big factor in the international nature of the MBA offered, according to Erik Weber, the associate dean for MBA programmes who took up the position last summer. He says: 'Our faculty has been involved in executive education all over the world - and I mean really all over. An MBA becomes international because of the faculty as well as the student body.'
Weber believes that if investment banks are looking more closely at IESE MBA graduates, it is because of the learning model the two-year programme follows. Weber adds: 'We give a solid background, like any good business school, but we also give a crucial focus on skills. We want people to know how to do it, not just what management is about in theory.'
Students work in teams of eight or nine people for a year and are asked to question their attitudes and question themselves constantly as managers. 'They are taught to bring criteria such as ethics and business responsibility into the equation. Recruiters seem to like that, because they see well-rounded people in the end,' says Weber. The case-study method is heavily used, and every case starts with the question: 'What would you do?'
The faculty is the second-largest producer of business cases in the world. IESE has an international advisory board of chief executives, presidents and members of the board of directors of 22 big multinationals. It has been advising the dean on the most recent developments in the world of business, and how executive education can best serve the current needs of corporations and new business ventures.
Last year the business school also launched its Global Executive MBA, featuring modular residential sessions in Barcelona, Palo Alto, and Shanghai involving distance-learning technology. Weber recently took on responsibility for this programme, which recognises the increasing demand for international mobility by course participants as well as recruiters across the world.
A recent Financial Times survey revealed that European MBA schools usually topped the table for such international mobility, saying that even the most traditional US business schools have now begun to recognise the need for change.
At IMD in Switzerland, for example, 68% of graduating students get a job in a different country than the one they worked in before the MBA programme, compared to 23% for the total sample, according to the FT.
The FT's own rankings placed IESE 25th among global business schools, but a EuroBusiness ranking put IESE second in Europe last year. In October 2000, in a look at European business schools, Business Week declared IESE to be third in the world outside the US, after first place Insead and second place London Business School. IESE was placed ahead of the prestigious IMD in Switzerland, which was fourth.
More than 60% of the MBA intake at IESE still comes from the European Union, but that may be changing. IESE has long had the same agreement as Insead with ABN Amro bank on special funding for students from eastern Europe, but the business school is now dealing with European and local banks for funding deals for students regardless of their international origin.
'Every day more companies are creating funds for scholarships for students. Europe should soon be closer to the US model,' says Weber.
Cavallé will clearly be missed, both within IESE and by the many investment banks that have already linked themselves with this business school. But his legacy of innovation is unlikely to die in the near future.