OCTOBER 1, 2018

The Global Initiative in 2018

In January 2011, a few months after becoming the tenth dean of Harvard Business School, Nitin Nohria outlined in a letter to the community five strategic priorities—what would become known as the "five Is"—for the School. They reflected input and feedback he had gleaned through hundreds of conversations with alumni, faculty, staff, students, and other friends of HBS. In addition to innovation, intellectual ambition, inclusion, and integration, Nohria outlined in the letter his thoughts about internationalization:

Our strategy is to leverage Harvard Business School's scale and size not by greatly expanding our physical footprint, but by expanding our larger intellectual footprint.... Our plan is to prudently develop the regional centers my predecessors were so perspicacious in starting, so as to facilitate the research and teaching activities that will enable us to form important relationships and develop and test new ideas across the globe. Ultimately, we'll bring that knowledge back to HBS, and we'll seek to provide an experience for our students and participants that is unmatched in its global breadth of analysis and understanding.

Fast forward almost eight years later, and Nohria and colleague Lynn Paine, Senior Associate Dean for International Development,1 were preparing for the October meeting of the Global Advisory Boards and Global Leadership Council. With the 20th anniversary of the opening of the Asia-Pacific Research Center (APRC) just a few months away, it seemed an opportune moment to take stock and examine which aspects of the School's global strategy were working well and which were not. Much had changed—within the School and in the world—in the intervening two decades. Did the original aspirations of the Initiative still hold up? What forces and factors were creating pressures—and opportunities—today and in the future? Was there a shared vision for the next 20 years of internationalization at the School?

Background

Harvard Business School's roots as a U.S.-based institution and a school that was global in outlook and reach could be traced to its founding. On the one hand, the School was created in response to solidly American concerns, including railroad management, the merchant trade, and the financial panic and crash of 1907. Yet the first MBA class included students from Brazil and Canada and courses in German, French, and Spanish correspondence were offered. Similarly, one of the School's earliest researchers both carried out an in-depth survey of the retail shoe trade in the U.S., and went on a five-

1 Prior Senior Associate Deans for International Development included John Quelch (2001-2005); Krishna Palepu (2005-2012); Felix Oberholzer-Gee (2012-2014) and Luis Viceira (2014-2017); their administrative partners included Karen Wilson (1996-2002), Eileen Keohane (2002-2005), Andy Elrick (interim), and Victoria Winston (2006-present).

Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.

Copyright © 2018 President and Fellows of Harvard College. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. The Global Initiative in 2018

year traveling fellowship to learn about the economic resources and commercial organization of Central and South America—traveling 26,000 miles and crossing the Andes six times.

Over time, efforts to be more international in outlook and understanding became more intentional. Dean Donald David (1942-1955) sought to help "businessmen in this country be concerned about and be literate about the problems and attitudes of other nations." During the 1950s and 1960s, HBS and its faculty aided in founding business schools in Japan, Chile, Turkey, Mexico, India, Nicaragua, Iran, and the Philippines, among other countries—nearly a dozen in total. In 1973 the International Senior Managers Program (ISMP) for executives was launched at a campus in Lausanne, Switzerland, with the understanding that the faculty teaching group would relocate to the country for one- to two-year stints while engaging in extensive regional research and case development.

The most recent iteration of the School's international engagement was the Global Initiative, launched early in the tenure of Dean Kim Clark (1995-2005) to, in his words, "develop intellectual and human capital." Early in his tenure Clark had identified technology and globalization as key forces transforming business and society, and he wanted HBS to understand and respond proactively to them. Although many other business schools at the time were pursuing a global strategy predicated on partnerships involving degree programs and students, Clark—despite receiving offers of this nature— did not choose this path. It was a poor match for the structure and pedagogy of the MBA Program (most partner schools did not share HBS's commitment to a first year required and second year elective curriculum or the case method). Moreover, the Lausanne experiment had highlighted the challenge of requiring faculty members (and their families) to move abroad, and ISMP had been brought back to campus in the 1980s. Instead, following the recommendations of a faculty committee chaired by Professor Ken Froot2 and recognizing the value that had been created when the research and teaching materials developed in Europe found their way back to the on-campus curricula, HBS opted to begin building a network of regional centers. As outlined in an early strategy statement, the centers were intended to:

• Develop more in-depth research and course materials that would translate into richer classroom experiences in the MBA Program and in Executive Education;

• Encourage faculty members to develop a deeper understanding of global business based on work that would keep them close to the most important, relevant, and interesting management issues and practices—wherever they occurred; and

• Strengthen the School's relationships with important constituencies around the world (alumni, companies, etc.) that were critical to ensuring the highest quality implementation of the School's overseas activities.

The center in Hong Kong, formally opened in January 1999, was the first3 outside the U.S.; its staff included an Executive Director (an MBA graduate), administrative support, and a researcher. Bob Hayes and Warren McFarlan were named faculty chairs and asked to serve as a bridge between the APRC staff and the faculty in Boston, an Asia Faculty Group4 was formed to bring together colleagues doing work in the region, and an Asia Advisory Committee was named—19 members hailing from 12 countries5—comprising primarily alumni of the School's MBA, Executive Education, and Doctoral

2 Members included Professors Christopher Bartlett, Dwight Crane, Tarun Khanna, Gary Loveman, Krishna Palepu, John Quelch, Debora Spar, Stefan Thomke, and David Yoffie. 3 The California Research Center had been established in Silicon Valley in 1997 to support rapidly growing interest among faculty and students in entrepreneurship and dot-com firms. The California Center was brought into the Global Initiative’s network of centers and offices in 2017-2018. 4 Chris Bartlett, Yasheng Huang, Krishna Palepu, David Yoffie, and Mike Yoshino. 5 Australia, China, India, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand, and United States.

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programs. In the first three months, the APRC team largely coordinated travel and meetings in support of initial case writing efforts (see Exhibit 1).

Evolution

New centers followed in Latin America (Buenos Aires, 2000, and São Paulo, 2015), Japan (Tokyo, 2002), Europe (Paris, 2003), India (Mumbai, 2006), China (Shanghai, 2010), and the Middle East and North Africa (Istanbul, 2013); smaller offices also were established in Mexico City (2004), Singapore (2015), Dubai (2015), Tel Aviv (2015), and Johannesburg (2017). They all adopted a similar model of lean staffing in modest facilities (see Exhibit 2 for a summary of space and staff), though exceptions were made as HBS found itself co-locating with or sponsoring other Harvard entities in a region. In Shanghai, for example, the School had taken the lead in funding and establishing the Harvard Center Shanghai, which opened with office space as well as a classroom and breakout rooms to support executive education programs. Conversely, in Johannesburg, HBS staff shared space with the University's Center for Africa Studies.

As these new centers and offices came on line, their staff—perhaps not surprisingly—increasingly were asked to help with other activities at the School, and finding the right balance between tapping regional understanding and leveraging Boston-based expertise sometimes created friction. Executive Education, for example, had invested heavily in building corporate relations, marketing, and program delivery capabilities, and the team wanted to ensure that programs, no matter where they were offered, were consistent on dimensions such as the quality of participants and an engaged learning experience. But the regional teams knew more about which programs were likely to be successful and often had longstanding relationships with key local companies. It took some time for HBS to adopt a more truly multinational approach and rely more heavily on the centers, but eventually the regional center teams also became engaged in activities such as MBA Admissions and Career and Professional Development (CPD).

Additionally, as Harvard sought to develop a more intentional global strategy (and to build the centralized resources required to support it), the Global Initiative found itself tapped to provide assistance and expertise to the University. This took the form of coordinating visits by University leadership, including the President, Provost, or Vice Provost for International. It also drew on HBS's role oftentimes as the first mover in a region, and encompassed giving space and support—including legal, payroll, and accounting—to parts of the University that were themselves seeking to establish a presence or activities in a country (e.g., the David Rockefeller Center for Latin American Studies and the Lakshmi Mittal and Family South Asia Institute).

Throughout this time, the centers increasingly came to be seen as embassies for HBS, with support for research and case writing as just one of their functions—albeit a core one.

The Global Initiative in 2018

By Fall 2018, the Global Initiative had grown to 68 employees (including the staff of five on campus, known as the "GI Core") and carried an FY19 operating budget of $12.6 million (see Exhibit 3). While still supporting a significant portfolio of case writing—58 case studies had been published the previous year and another 65 were in progress—the centers had taken on an even wider array of other activities. Examples included:

• Non-case research – Roughly 60 such projects were underway that included activities such as data gathering, field interviews, videotaping, and analyses.

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• Faculty group immersions as well as immersions of one – These customized, multi-day visits focused in-depth on a particular industry or phenomenon. Typically one location was selected annually for the group immersion and engaged 10-20 faculty members, while any given center or office might coordinate 5+ immersions of one in a given year.

• FIELD Global Immersions and Immersive Field Courses – Working closely with the MBA Program team and faculty chairs for each location, the centers helped identify global partner organizations, cultural activities, and projects. All 900+ first-year students and nearly 300 second-year students participated in these offerings.

• HBX – The centers helped with the marketing of CORe and other HBX courses.

• GloColl – For more than a decade HBS had been bringing together faculty members from institutions around the world to learn teaching by the case method. The centers built relationships with schools in their regions and identified participants for the annual program. Since launch, more than 2,700 faculty members had completed GloColl.

• External Relations – While the Global Initiative intentionally shied away from fundraising activity, the relationships the research centers built with alumni were an important means of strengthening alumni engagement with the School. As part of their outreach to a region's business community, the Executive Directors worked closely with alumni clubs, leveraged faculty visits to host lectures for alumni, sought advice on case leads and research projects, and spent considerable time with their advisory boards.

• Executive Education – In the 2000s, Deans Clark and Light had planned for growth in the School's portfolio of international executive education programs, including, for example, opening HBS-style classrooms in both Shanghai and Mumbai. A range of new focused programs and programs for senior executives were launched, and the centers provided help in everything from marketing to program delivery.

(See Exhibit 4 for an overview of Global Initiative activities.)

Not all "global" growth at HBS had happened under the umbrella of the Global Initiative. Harvard Business Publishing and Executive Education, for example, each had significant activity happening outside the U.S., including a dozen international editions of Harvard Business Review and executive development program offerings in China, the Middle East, Africa, and India. Some of this activity was supported from Boston but, particularly over the last dozen years, regional staff had been hired to support corporate relations, marketing, program delivery, and other key functions. These roughly 50 individuals often, but not always, were co-located with the Global Initiative staff, and typically had reporting relationships both within country and to Boston.

Both groups had experienced successes in some regions and setbacks in others; at a minimum, it had become clear that flexibility was key. Even as the School had invested in developing classrooms in India and China, for instance, business schools in local markets had significantly stepped up their capacity to meet the needs of companies for business and leadership development—leading to lower than expected utilization rates and questions about how HBS's executive education portfolio should evolve.

Interestingly, the demand for the services provided by the centers did not wane even as greater numbers of the faculty were themselves born or educated outside the U.S. To the contrary, the regional centers had come to be viewed as a competitive advantage from a faculty recruiting standpoint, with at least a few recent hires noting that a key component of their decision to join the HBS faculty was the

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School's ability to support their ambitious global research agendas (see Exhibit 5 for faculty composition statistics).

Charting a Path for the Future

Nohria and Paine had begun discussing areas where the Global Initiative might focus in the years ahead. Both sensed that perceptions of the centers' activities and impact had not caught up to the reality of what they were accomplishing.

Perhaps a more systematic review would be helpful. Were the centers serving the faculty well? Feedback was gathered each year as part of the performance review process for the center staff, helping resolve issues as they arose (e.g., a case writing project going off the rails). But it had been a while since anyone had taken a holistic look. Were there faculty members who simply weren't engaging with the centers at all, and if so, why? Did the centers provide uniform support and were they easy to navigate? The faculty's research methods had become more diverse—with many conducting field experiments, large-sample data analysis, global interview projects, and the like—but it was unclear whether the centers were or should be appropriately staffed to support these various kinds of research, particularly given the complexity of issues such as human subjects review, data licensing, export controls, and IP and non-disclosure agreements that often were a backdrop for this work. Were there other activities the Global Initiative should coordinate, such as bringing together groups of faculty members doing work in a particular region or on a particular topic across regions? More broadly, did it seem that the original aspiration of a faculty "close to the most important, relevant, and interesting management issues and practices" had been realized? How would this be measured?

Metrics was an area more generally of interest to Nohria and Paine in trying to ascertain—and be able to demonstrate to alumni and other friends of HBS—the Global Initiative's contributions and, more generally, the School's impact. A point of pride for the Global Initiative had been the moment when it was able to count roughly half of the field cases produced in a given year, including those without center support, as being global in setting or focus. And clearly the MBA curriculum was far more diverse; Nohria remembered his experience as a junior faculty member when pretty much the only global cases in the first year were those in the Business, Government, and the International Economy (BGIE) course. Today, global cases were interspersed throughout both years of the program. But was the case count alone the right measure? If it was, what should the percentage be? What other indicators should be tracked? How might the School ascertain whether it was doing enough to truly develop global understanding, particularly after the launch of efforts like the FIELD Global Immersions?

Another question was the extent to which the centers and the Global Initiative should devote resources to fostering alumni engagement. Of the School's 84,000 alumni, nearly 45% listed a home country outside the United States. That percentage would only rise based on math alone: the percentage of international students in the MBA Program had been nearly flat at 35% for many years, meaning roughly 300 of each graduating class of 900+ were international. In Executive Education, the ratio was the opposite, with international participants comprising approximately 65% of the total— yielding about 1,000 new international alumni each year (including, for the first time, alumni for whom English was not their first language given the School's success in offering programs via simultaneous translation). Connecting alumni to each other and to the School was a goal that had emerged during the recent campaign; moreover, alumni philanthropy was an important component of the School's economic model and had been crucial in launching and sustaining the regional centers. Yet much of the engagement relied on Boston-based activities. Was there a unique role the Global Initiative could play in fostering community regionally, even as it left fundraising to the School's External Relations group? One specific idea that had emerged was re-launching the Global Business Summits of the 1990s and 2000s: annual conferences that drew upwards of 500 alumni and one or two dozen faculty

5 The Global Initiative in 2018

members together for a multi-day program of panel discussions, keynotes, and case discussions. Was there merit to introducing them again? Could the School leverage the new convening capacity created by Klarman Hall?

Nohria and Paine also wondered if the network of centers was sufficient, or whether additional presence was warranted in certain regions—or even within the U.S. (see Exhibit 6 for the locations of centers and offices). Though it sounded counterintuitive, Nohria had experienced firsthand the extent to which his colleagues viewed parts of the U.S. as "foreign" on a recent faculty immersion to a region of Mississippi known as the Golden Triangle: a quick show of hands revealed that more had been to China than to all of the southern states combined. For all the ways that globalization had lifted many out of poverty around the world, many countries still were dealing with challenges of income inequality and societies that felt deeply divided as a result. Would opening a center in the heartland of the U.S. help deepen understanding of this struggle that could be brought to other regions facing similar issues?

Nohria and Paine looked forward to discussing how Harvard Business School's international strategy should evolve to best meet the needs of the School, its constituents, and the regions in which it was engaged.

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Exhibit 1 Asia-Pacific Research Center Activity Report, October-December 1998

28 October 1998 (Lynn Paine – Consumer Products Company, Guangdong, PRC) Translator and travel arrangements were provided. However, the translator was not required because LP brought her Chinese-speaking RA. Purpose: To write a case

12 November 1998 (Anthony St. George – Foodstuffs Co., Guangdong, PRC) ASG revised draft of case and data in the office. Translation of case into Chinese was arranged but later not required due to time constraints.

16-20 November 1998 (David Yoffie and Mary Kwak – Broadband Development in Hong Kong and Singapore) 43 hours/26 meetings (6 meetings in Singapore, 20 meetings in Hong Kong) were arranged. Purpose: To write an industry note. Research subject: Will the broadband infrastructure in these two cities result in their developing services and applications which would allow them to leapfrog broadband development in the U.S.?

15-18 November & 23 December 1998 (Dick Vietor – 1998 Macroeconomic Data on PRC) Provided data and two monthly analyst reports on PRC and Asia. Purpose: Data update

6 & 9 January 1999 (Paul Healy – Accounting Infrastructure in the PRC) 13.5 hours/9 meetings arranged. Purpose: To write a note Research subject: Valuation process on PRC assets and companies as indicated via A, B, H, N shares and otherwise.

9-12 January 1999 (Tarun Khanna – Financial Intermediaries in HK) 24 hours/13 meetings arranged. Purpose: To identify case study candidate Research subject: How are scarce analyst, broking, private equity resources deployed in the assessment of investment opportunities in Hong Kong, PRC and the region?

7-20 January 1999 (Mike Roberts – Consumer Products Co. in HK/US, Healthcare Co. in Asia, Computer/Software Infrastructure in Beijing, PRC) Equivalent 18 meetings arranged. 3 potential case research candidates (3 days' meetings each budgeted) and 3 additional meetings arranged. Purpose: To write 3 cases.

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Exhibit 2 Regional Research Centers and Offices, 2018

Boston (Core) Victoria Winston Executive Director 2006 Boston Christy Bahr Assistant Director 2018 Boston Carter Svensson Senior Coordinator 2012 Boston Elise Yagoda Associate Director 2014 Boston

Africa Office (470ft2) Pippa Armerding Director 2017 Johannesburg Dilyana Karadzhova Senior Researcher 2018 Johannesburg Nthatisi Quella Administrative, Research, and Program Assistant 2018 Johannesburg

Asia-Pacific Research Center – Hong Kong (980ft2), Shanghai (15,706ft2), Singapore (500ft2) Jingsheng Huang Managing Director & Executive Director 2014 Shanghai Essie Alamsyah Senior Researcher 2015 Singapore Bonnie Cao Researcher 2018 Shanghai Billy Chan Researcher 2018 Hong Kong Kitty Chow Executive Secretary 2000 Hong Kong Nancy Dai Associate Director for Research 2009 Shanghai Doria Dong Program Coordinator 2016 Shanghai Dawn Lau Assistant Director 2011 Hong Kong Shu Lin Researcher 2017 Shanghai Tracy Qin Administrative Coordinator 2011 Shanghai Vina Tang Program Manager 2013 Shanghai Connie Yeung Office Manager 1999 Hong Kong

California Research Center (1,073ft2) Allison Ciechanover Executive Director 2013 Burlingame George Gonzalez Senior Researcher 2017 Burlingame Jeffrey Huizinga Senior Researcher 2016 Burlingame Nicole Keller Senior Researcher 2016 Burlingame

Europe Research Center (5,615ft2) Vincent Dessain Executive Director 2001 Paris Daniela Beyersdorfer Associate Director, Research and Administration 2004 Paris Emilie Billaud Assistant Director 2011 Paris Elena Corsi Assistant Director 2005 Paris Pietro de Agostini Project Coordinator 2016 Paris Federica Gabrieli Research Associate 2016 Paris Mette Hjortshoej Research Associate 2018 Paris Tonia Labruyere Research Associate 2014 Paris Emer Moloney Senior Researcher 2012 Paris Jan Pianca Assistant Director, Educational Programs 2011 Paris Oksana Sichi Manager of Administration 2008 Paris François-Lucien Vulliermet Research Assistant 2018 Paris

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Exhibit 2 Regional Research Centers and Offices, 2018 (continued)

India Research Center (5,615ft2) Anjali Raina Executive Director 2008 Mumbai Namrata Arora Associate Director, Special Projects 2007 Mumbai Saloni Chaturvedi Researcher 2010 Mumbai Rachna Chawla Assistant Director, Research Services 2006 Mumbai Tanvi Deshpande Research Associate 2017 Mumbai Anthea D'Souza Associate Director, Financial & Business Administration 2006 Mumbai Kalpesh Hedulkar Administrative Assistant 2013 Mumbai Mahima Kachroo Research Associate 2017 Mumbai Rashmi Patel Research Assistant and Educational Coordinator 2014 Mumbai Sanjivani Shedge Executive Assistant 2012 Mumbai Inakshi Sobti Associate Director, Community Initiatives 2013 Mumbai Rachna Tahilyani Associate Director 2008 Mumbai

Japan Research Center (675ft2) Nobuo Sato Executive Director 2009 Tokyo Naoko Jinjo Senior Researcher 20016 Tokyo Akiko Kanno Assistant Director 2004 Tokyo Yukari Takizawa Office Manager 2013 Tokyo

Latin America Research Center – Buenos Aires (1,076ft2), São Paulo (550ft2) Fernanda Miguel Director 2013 Buenos Aires Priscilla Zogbi Director 2015 São Paulo Mariana Cal Research Associate 2017 Buenos Aires Ruth Costas Senior Researcher 2016 São Paulo Carla Larangeira Senior Research Associate 2018 Mexico City Maria Martha Ruiz Melo Office Manager 2010 Buenos Aires Patricia Thorne Office Manager 2018 São Paulo

Middle East & North Africa Research Center – Istanbul (1,650ft2), Dubai (600ft2) Esel Çekin Executive Director 2013 Istanbul Samer Al-Rachedy Research Associate 2018 Dubai Yasemin Çağlar Educational Programs Manager 2016 Dubai Zeynep Mağgönül Office Manager 2015 Istanbul Alpana Thapar Assistant Director 2015 Istanbul Gamze Yücaoğlu Assistant Director 2013 Istanbul

Tel Aviv Office (desk space only) Danielle Golan Assistant Director 2018 Tel Aviv Dhalia Tabori Administrative Assistant 2018 Tel Aviv

9 -10-

Exhibit 3 HBS Investment in the Global Initiative

12000 11,426 California Research Center 10,466 10,639 815 Middle East/North Africa Research Center 10000 1,119 1,094 China Office / Harvard Center Shanghai 9,426 1,090 8,823 8,985 India Research Center 8,775 674 85 202 745 2,457 8000 Europe Research Center 7,688 2,803 3,348 2,529 Japan Research Office 2,741 2,658 6,623 2,773 Latin America Research Center 2,778 1,413 6000 1,264 Asia-Pacific Research Center 1,847 984 1,055 891 1,195 4,794 1,168 Global Initiative Core 296 1,521 1,651 3,994 769 851 1,534 616 1,311 1,430 4000 3,691 49 1,453 509 1,075 1,333 674 664 2,959 383 1,039 1,016 773 2,816 904 787 758 955 661 2,391 2,491 166 297 2,137 628 662 770 699 691 611 1,266 1,328 1,951 627 649 681 537 567 673 846 2000 206 510 560 742 182 412 597 628 1,186 721 375 414 464 541 539 1071 1057 722 713 554 793 1022 632 797 465 518 510 512 537 756 828 669 288 674 608 628 22 475 535 563 549 501 1,241 1,270 1,291 434 935 862 976 984 1,085 1,184 944 556 587 506 479 555 746 758 0 257 341 423 369 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

The Global Initiative in 2018

Exhibit 4 Global Initiative Activities

GI Admin, 28%

Faculty/Research, 49%

Pub Rel, 1% Univ, 2%

HBX, 2% Publishing, 1% Events, 4% GI Boards, 3%

ER, 3% Exec Ed, 3% MBA, 4%

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Exhibit 5 Composition of the HBS Faculty, 1998-1999 and 2018-2019

1998-1999 2018-2019

Number of faculty (headcount) 209 268 Number of non-U.S.-born faculty 66 99 Percentage of non-U.S.-born faculty 32% 37% Number of countries represented 26 37 Number of non-U.S.-born faculty by regions: Asia and Pacific 26 37 Europe 21 33 Middle East 3 8 Africa 3 2 Canada 6 9 Central and South America 6 9 Number of non-U.S.-born faculty by level: Professors 26 48 Associate Professors 8 13 Assistant Professors 23 20 Term or Other Faculty 0 17

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Exhibit 6 Regional Research Centers and Offices

13