London Business School’s Big Expansion Plans

“WE’VE GONE INTO THE ROOF AND THE CELLARS”

Sir Andrew, who first began teaching at London Business School in 1974 and has been founding director of its Executive MBA program, does not want to move the school from its present location. ”We have this wonderful campus,” Sir Andrew says. “It’s small enough where people feel at home here, but when I first came here the campus was operating for 30 weeks a year. We now operate for 48 weeks a year. We now have four sessions a day, versus three. We’ve gone into the roof and the cellars.”

London now has three full-time master degree programs: its flagship full-time MBA program with 404 entering students; a one-year masters of management program with some 140 students, a master of finance program with 120 students. The school also boasts a part-time, masters-of-finance program with 73 students, and two Executive MBA programs—one in London with 75 students and another based in Dubai with 60 students. The school also has a large complement of executive education courses.

“The total is a record intake this year,” says Sir Andrew. “We’re not seeking at the moment to increase the numbers because we have no space. The main problem in London is that we are absolutely full.”

The demand can be partly attributed to the school’s performance in several major MBA rankings that has significantly raised its global profile in recent years. London Business School has been ranked number one by The Financial Times for the past three years. London was tied with Wharton for first-place honors in 2009, the first time it received a top ranking, then took sole possession of first place in 2010, only to win a tie with Wharton this year. Forbes also ranks London Business School first in an international category of two-year MBA programs.

“IT’S VERY NICE TO COME OUT TOP OF RANKINGS”

“We enjoy the marketing opportunities of being top of rankings,” he says. “Of course, it’s very nice to come out top of rankings. But for us what we do is we look at the component elements of rankings and ask what can we do better? Where are our areas of relative weakness? In that respect, rankings are good as a spur. Even if you are number one, you would be very foolish to ignore any area of weakness. Complacency is reprehensible.”

He is, however, concerned that some schools may be under pressure to manipulate the data they report to those who rank business schools to improve their rankings. “If the senior management of a school is under a huge amount of pressure and that is the way a dean is judged, that leads one in any field into dangerous territory,” Sir Andrew says. “The pressure is then on to do whatever you can even if you don’t cheat. There are lots of ways in which numbers can be manipulated. I guess there will always be problems if leadership measures its success by rankings. We don’t and I make clear for people coming into the school we’re doing really well in the rankings but we don’t regard this as permanent. What matters is your experience. If we come out top of the rankings, that is brilliant. But if we don’t, I’m not going to change what we are doing here.”

Sir Andrew says the school has no intention to launch a one-year MBA program, which is a popular alternative at many European schools. “Ever since the school started, it has had a two-year program. Questions have always been asked about a one-year program, but we have maintained the two-year program because there is demand for it. You can get through here in 15 months if you really kill yourself to do it and some people do. But quite a lot of people come here saying they want to get through here as fast as possible and when they come here they don’t. The revealed preference of a lot of people is they do value the extra time. At the end of two years, there is a terrible sense of sadness that they are going.”

“I HAVE HAD VERY FEW PEOPLE SAY, ‘THIS IS A REALLY LOUSY RETURN ON INVESTMENT'”

Despite rising concern over the declining value of the degree as steady increases in the costs of getting an MBA have outpaced gains in starting salaries, Sir Andrew maintains that there is no major concern over return on investment. “The people who come here are not illogical in looking at this,” he says. “If they felt they would not get a rate of return on their investment, I do not think we would attract that many good people. If salaries do not go up quickly, the rate of return will fall. But we haven’t seen any indication from people who are saying, ‘I’m not sure about that.’ On the whole, people come here because they have personal agendas rather than a calculation on return. I have had very few people say, ‘This is a really lousy return on investment and I regret coming here.’”