Thunderbird’s Future post the HLC decision – the Sentiments

Two weeks ago, we received the decision that T-birds around the world and on campus had been anxious about for months. The Higher Learning Commission (HLC) turned down Thunderbird’s application for a deal to become an independent partner with Laureate. The HLC went on to say that Thunderbird has been given the option to submit a new application addressing the HLC’s concerns.

In light of this decision, Das Tor sought out the opinion of students, faculty and alumni to see where their minds are at. We asked everyone the following:

What did you feel about this decision by the HLC?
What, in your mind, is the impact of this decision? (on yourself / the school / the Thunderbird community)
If you have read or heard from the TIAA, what is your opinion about their proposal?
What are your concerns about the future of Thunderbird?
What do you feel Thunderbird should do next?

Below are some of the responses we received:

I was very surprised by the HLC decision. The meetings on campus that I attended seemed to be fruitful. I was favorable to the Laureate proposal for I saw it as a powerful way of building scale for Thunderbird. I visited their operation in Brazil and was very favorably impressed with their organization, student body, facilities, and brand strength. Of course, I also had concerns about their speed of growth by acquisition and the business model and some of the news coming out of Chile. My concerns were attenuated by the fact that the terms of the contract guaranteed the Thunderbird independence.

Not differently from any corporation that is faced with a failed merger or strategic partnership, Thunderbird will have to realign its priorities and, at the right time, enter into a new partnership. The school needs to grow enrollment and build up enough critical mass to support a small network of campuses abroad. The integrity of its vision and mission, or the quality of work it does will not change. The essence of the brand will continue intact. It is, however, clear that a key priority is to regain the #1 ranking and improve the overall position in MBA rankings.

It is with sadness that I will remember this chapter of Thunderbird’s existence. While I respect and honor that which I’d call ‘positive opposition’, I cannot justify actions that destroy an entity that does so much good just to accomplish a particular point of view. Now that the Laureate deal is dead, it becomes even more impossible to explain the continuation of their campaign or their own reason to exist. So, my only conclusion is that, from the beginning, their efforts were not purely aimed at preventing the partnership with Laureate, but to advance the cause of a competing suitor. The proposal offered by the TIAA main sponsor is, in my personal view, a bad proposal for Thunderbird. The notion that by offering a long term loan the sponsor will have the school named after himself, and by extension would become our CEO, would never, I repeat never, be approved by the Higher Learning Commission and the AACSB. In consequence, we would become simply a trade school, unaccredited, unranked, and insignificant. Again, in my opinion, the proposal is primarily driven by a narcissistic motivation, and does not have the true interest of the school at heart. This would be one of the philanthropic deals of the century. According to a Business Week article titled “What’s in a name?” (March 14, 2012) the average naming gift is approximately $52 million. In our case, to get a major school named after a lender of resources would be a stupendous coup. While there are short-term cash flow concerns, Thunderbird is not devoid of options and supporters. The school sits on a property that is appraised at between $40-70 million dollars, it has access to endowment money, and has many truly altruistic donors.

The school must maintain its focus on providing an outstanding global business education, and prepare its students to succeed in the job market. This is job #1. It must focus on expanding the student base and explore a variety of new programs to serve different markets and needs in various geographies. However, this will only be accomplished if those who truly love Thunderbird come together in support of the institution. Nothing in the world can justify a destructive campaign toward Thunderbird for the purpose of winning approval for the ideas of an individual suitor. We must all work now to neutralize the waves of digital sludge that have been created. The Thunderbird brand has suffered, but it will return to health if we, all stakeholders, embrace it with vigor and creativity.

The future of Thunderbird is bright. Its graduates carry the flag of global understanding and prosperity to the farthest posts of Earth with amazing dedication. They are united by the same ideal. As a member of the faculty, I personally realize this vision through each student with whom I worked in the last 25 years. Nothing will give me greater joy than having this vision sustained by the new generations with the same dedication.
– Prof. John Zerio,  Ph.D., Associate Professor of Global Marketing

Rather than responding to each question, I would like to provide a more holistic view of our approach.

The faculty are committed to rebuilding Thunderbird. We re-affirmed this position by passing a unanimous resolution at the General Faculty Meeting held last week: The Faculty of Thunderbird is committed to the future of the institution. We ask all with a stake in the past, present and future of the institution, to put their differences aside, and, commit quickly to an actionable, sustainable plan to secure its future – a future the entire Thunderbird Community can share.
We gladly welcome suggestions/ideas from all key stakeholders to help us in this process.
– Prof. Ram, Chair, Faculty Senate; Ph.D., Business Administration

I had mixed emotions but mostly relief given how polarizing Laureate had become. They would have provided a financial windfall, but hopefully we will find a partner that is a better fit with our values and desired legacy. The time leading up to the decision was a very sad period in the history of Thunderbird. In the past, we were a Thunderbird family. Now we use terms like Thunderbird community and One Thunderbird in a much less emotional way. My hope was that we would go through some quick healing and truly pull the family back together again. It’s still possible. I’ve read both proposals. They display the undercurrents of a hostile takeover, but I may be missing something. We have encountered serious collateral damage in the press and social media. The more some blame others, the worse it will get. The impact on enrollment and Thunderbird’s top line could be dramatic unless we unify as a Thunderbird family. This is our real strength that we need to draw upon above all else. Shame on anyone who is still doing anything to divide the Thunderbird family. We need to get as many people as possible energized about the future of Thunderbird. This will require a mix of servant leadership, inspiration, and effective stakeholder engagement. The best place to find this kind of leadership is within each of us. We are T-Birds. It’s what we do. It’s what we’ve always done.
– Prof. Bill Youngdahl,  Ph.D., Associate Professor of Project & Operations Management

It was very disappointing that despite all the assurances we were given, the plans as presented to HLC were not acceptable. The greater disappointment for me was the fact that we are in the midst of a crisis that many of saw evolving over the last decade. I wish those who had the ability to do so had proactively shaped our strategy in the spirit of ensuring the continued well being of a great institution. We say that we ought to spread prosperity worldwide. Perhaps it should have started at home.
The decision was surely a wake-up call to many in our community. I am hoping that this will galvanize everyone to set aside their differences and pull together as a unified community with the single purpose of ensuring the longevity and vitality of Thunderbird.
I did go over the initial proposal from ex-Trustee Merle Hinrichs carefully, the version that was available to the community via the Thunderbird webpage. I found it woefully lacking in detail and nuance. Even some of the broader themes defined by that proposal seemed to suggest that this was far from an equitable deal and lacking in strategic substance too. The terms seemed too onerous and I supported the BoT decision to turn down that proposal. The current TIAA proposal (1.5 page version) is once again very unclear. On the surface it seems to extend a lifeline at best but I question the conditions that we have to meet to make use of that approach. We cannot live on handouts anymore if we cannot come up with a serious strategic shift in responding to the changing landscape in education. We have buried our heads in the sand for far too long. The future….I sure hope there will be one.
We need to explore any and all options to secure the immediate financial viability of the school. This would entail exploring options ranging from refinancing the debt to selling some of the assets and evaluating potential partner schools and investors. Hopefully the BoT is actively engaged in this process. The faculty nominated a group of seven members to collaborate with the BoT in these deliberations. In parallel we need to rethink our entire product portfolio. We simply cannot continue to add programs as a means of overcoming revenue deficits. Perhaps we ought to think of a “shrink-to-grow” strategy. It would encompass a few key initiatives (not in sequence).
(1) We repair the flagship programs and make them more value focused (e.g., admit employable students with reasonable work experiences, partner them with potential employers upon arrival, constant contact with recruiters to make classroom content meaningful). This will shrink the flagship program to roughly two cohorts of 50 each. This segment of the students must be very well qualified, top of the line with great GMAT scores etc. The unique value proposition ought to be our focus on developing talent that can be deployed at moment’s notice anywhere in the world to assist MNCs globally. They will be language proficient, possess business savvy, and have cross-cultural exposure that employers will find attractive. Many schools claim that they do this but few really deliver.
(2) This should be accompanied by an expansion of the MS programs. However, instead of a “plain vanilla” approach that offers specializations in marketing, finance, management etc. , we should;d build industry focused programs. We can easily mount offering in energy, healthcare, IT services, and financial services. We can admit students who have limited work experience and put them through a rigorous 2-year program (non-waivable) covering business fundamentals, advanced topics of a contemporary nature like the electives we offer. We can round off their education with a strongly interwoven industry perspective either as a specialized 6-month classroom experience and practicum or woven right through the program. With careful planning and leveraging our alumni network, we can offer attractive internship opportunities and open doors for eventual employment in the chosen sectors.
(3) The Executive Education programs should be redefined to focus on exploiting synergies between the industry verticals that the school wants to build its reputation around (e.g., energy, healthcare). The programs should be linked more closely with what we do best on both sides of the campus as opposed to relying on solely external talent that does not have any allegiance to Thunderbird graduate programs. For example, by building the link between Thunderbird and ExxonMobil using the expertise of our faculty over a decade, we have been able to place several students in ExxonMobil. Several of them occupy very high positions in the company today. We should replicate that model in other sectors. This will call for a rethinking of the entire strategy of Executive Education.
(4)..We should plough ahead with the online offerings that have been in the design phase for sometime. We need to ensure that the program is very well differentiated much along the lines of the other graduate programs that need redesign. They will have to deliver clear value that cannot be matched by others. We should focus almost exclusively on building a cadre of local talent in a range of countries who are either working or will work for large multinationals. We should focus on markets such as the merging markets where there is a dearth of such focused programs and the need for a more value differentiated player such as Thunderbird. Since we lack the marketing reach, we ought to strike a marketing alliance with players such as Pearson or Coursera among others to market our programs online.
– Prof. Kannan Ramaswamy, Ph.D., Strategic Management

In a nut shell: I don’t have a problem with non-profit education. I just don’t like Laureate very much as a partner and I think we sell ourselves short with them–out of desperation for capital. I’ve had a wide range of reactions over the last year. I love Thunderbird – I got what I wanted from it and a lot more. The idea of Thunderbird doing a JV with a for profit education institution is fine by me – I even find it quite innovative and refreshing considering the changing landscape of graduate business education. I don’t believe that the overall concept is a problem for most people. Non-profit and for-profit education models both have pros and cons. I believe that the issue for most people is the choice of the partner. We view Thunderbird as a top tier institution while we view Laureate as a second rate institution. Many of us look at the Laureate network and say, “these are mostly technical schools and community college-like organizations. What are we doing aligning ourselves with this brand?” This fundamental misalignment is not addressed, in my view. Instead, the benefits of needed capital, possible higher enrollment, and maintaining our independence are touted. But future, current and past students (alumni) are concerned that the brand will be diluted and cheapened and this is not sufficiently treated. I graduated in December, I’m living in NYC pursuing jobs, and I keep returning to that fundamental conflict, “why does top ranked Thunderbird want to JV with second tier Laureate? I know the answer and I don’t like it. Not that making a decision based on resources is wrong–quite the contrary. I just wish that we could get resources from an equally prestigious partner.
– Adam Nilsen, ’13

My first concerns are about some of the professors not adding value. We pay too much money per credit to have professors that spend their lectures telling long stories irrelevant to the subject. While complaints about faculty are a dime a dozen, I recognize that many opinions are subjective, but there’s a difference between not agreeing with a teaching/grading style and a not professor teaching at all. My second concern is for the school’s facilities–they are way below par: from the cafeteria to the dorms to the landscaping to the classrooms with speakers too quite to hear. This top international business school does not look like a top international business facility. I don’t care what Thunderbird does as long as it improves my education.
– Anonymous, ’15

To be honest, I think that the HLC realized that there were a lot of politics at play on this one. They probably didn’t want to get caught in the middle so they decided to defer and let the various parties work out their differences and come back at a later time. I personally think we are just going around in circles. I never was that thrilled about the partnership or at least the way that it was presented to the alumni. At the same time, I just see us still arguing for power and egos (on both sides of the fence) while not solving the underlying strategic barriers to Thunderbird’s growth and prosperity. I am in alignment with the desire to keep Thunderbird’s operational costs covered while searching for specific and time-bound long term solutions. What I am a little turned off about is that it still seems as though the offer (from TIAA) comes with conditions of board leadership that put us right back into the circular and unproductive tug of war battle for leadership/power/influence of the BOT. I am concerned that we are fighting ourselves when we should be putting our collective and diverse minds plus our wallets together to make Thunderbird thrive again and be industry leaders. Drop the egos, stop the games, engage the broader community, set tangible action steps, and hold stakeholders accountable. Plus, no more PR games on either side! We are not the first nor will be the last organization to go through major headwinds. Let’s show the world what we do best as T-birds: Adapt to new environments and win!
– Ted Ketterer, ’10

I was relieved, and very happy because I believed that the partnership proposal with Laureate was going to be detrimental to Thunderbird’s long term longevity as a top educational institution. I believe that the decision shows there are some serious problems in the governance of our school. It was a huge validation to all of the alumni and students who have been bringing up concerns about the venture since its inception. I love the idea of giving the school money and time to put some positive processes in place.  I love the idea of conducting a professional evaluation of all Thunderbird’s partnership and funding options. I also agree with the demands of replacement for the BOT. I think they have served Thunderbird poorly, they have failed, and they should be replaced. I am concerned that the people in power who have brought Thunderbird to its knees financially and organizationally will be allowed to remain in power. If this happens, the struggle will simply continue on and there will never be positive changes. I feel that Thunderbird should either accept the TIAA proposal or make some actual changes to the way it has gone about its business in the past. This would include apologizing formally to those alumni and members of the BOT who were kicked out for disagreeing with Thunderbird’s direction, and it would include putting somebody in power who is dedicated and committed to good (and ethical) business practices. I am hugely disappointed in Thunderbird’s leadership and the behavior of those who are supposed to be guiding the school and leading us all. I think it is time for a new BOT, a new President, new governance, and new options.
– Story Tweedie-Yates, ’13

As a student I wasn’t convinced either about why Thunderbird chose Laureate for the partnership and hence the decision came as no surprise to me. As a student, I am concerned and worried about my school’s future. I feel that the school probably had not addressed the reasons for the proposed alliance and hence was denied approval. I will be graduating in May and am confused about what stand I should take; whether to support the school and its administration or rather support the alumni organizations. I am concerned about the way the alumni are handled by the administration. I am also deeply concerned about the school’s trial and error policy of decision making. On what Thunderbird should do next: Involve the imminent faculty and review the cause of our debt crisis. Bring all the stakeholders in one room and hold a discussion. Evaluate options and articulate the decisions.
– Soumya Sivadas, ’14

I think the Laureate JV could have been an effective way for Thunderbird to innovate in the education space, and reach a broader base of students and employers. Educational programs will evolve in order to stay relevant with changing lifestyles, and the Laureate deal provided an option for Thunderbird to separate itself from other graduate business schools who are “going global” in programs (Harvard, Chicago, Duke, etc.). However, it’s good to see that the school can pursue other options that may not need outside participation. Either way, I’m happy to be a Thunderbird and I think the breadth of diversity within the institution is what makes this school special. I think a more inclusive and open communication process in general would be good for everyone committed to Thunderbird. Current students, along with the TIAA, and many alumni all want to see Thunderbird continue to evolve and stay true to its brand and position as the elite institution for international education. After the decision made by the HLC has gone through, I would hope that whatever is discussed moving forward about next steps for the school is kept within the Thunderbird community and is done with a spirit of resolution.
– J. Chase Harps, ’14

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