Business schools all over the world have been badly impacted by the global pandemic, and that is especially true of schools that have a strong presence in executive education.
At INSEAD, one of the biggest players in exec ed along with Harvard Business School, IMD, and Northwestern University’s Kellogg School of Management, revenues from executive education fell by 37% to €76 million in the past year from a record €120 million in 2018-2019.
Put another way, the total revenue from executive education at INSEAD last year slipped to just 32% of the total, down from 43% a year earlier. The overall impact of the revenue collapse was cushioned somewhat by the success of the school’s degree programs, which accounted for 54% of revenues last year, up from 42%. Total revenue fell by 16% to €236 million ($282 million) from €280 million ($334 million) in 2018-2019, according to INSEAD’s newly released annual report.
‘THE CRISIS HAD A PARTICULARLY SIGNIFICANT IMPACT ON EXECUTIVE EDUCATION’
The downturn would have been much worse if it had occurred over the entirety of INSEAD’s fiscal year. INSEAD reported the the 2019-2020 financial year began strongly. “From September to February, Executive Education revenues soared and degree programs remained on track to meet participant targets for the year,” according to the report. “Then came the COVID-19 pandemic and campus closures.
“Over the next six months, the crisis had a particularly significant impact on Executive Education. Many accepted participants deferred their entry to Open Programmes and, because of travel restrictions, companies delayed Customised Programmes, resulting in a 20% overall drop in revenues. The effect was compounded by a loss of revenue from Campus Hotels, all of which were forced to close.”
On the other hand, noted INSEAD, student recruitment and admissions to its degree programs remained “surprisingly buoyant, especially in the case of the Master in Management, which exceeded expectations by admitting more students than projected into the inaugural class of 2020/21.” In fact, the school’s cash on hand at year-end rose to €123 million from €89.0 million, while INSEAD’s endowment grew to €282 million by year-end from €239 million.
‘WE WILL LOOK BACK ON 2019/2020 AS A YEAR OF ACCELERATED INNOVATION’
Like many other business schools, the pandemic fueled accelerated innovation at the school, moving more of its learning experiences online. “All things considered, we emerged from this most financially challenging of years far stronger than might have been expected,” according to the report. “Indeed, the dedication, creativity and enthusiasm of our faculty, staff and students proved to be a resource of incalculable value as we digitised our delivery and moved our classrooms online. We will look back on 2019/2020 as a year of accelerated innovation and of challenges overcome. Looking to the future, the outlook is hopeful. Already we have experienced record applications to our degree programmes and online Executive Education revenues for the first quarter of 2020/2021 are higher than ever before.”
INSEAD’s own management of its finances also helped greatly during the crisis. “Throughout the second half of the year, INSEAD’s finance professionals acted quickly, working with colleagues across the school to preserve income and reduce costs. Previous investments in streamlining the finance function – along with the recent creation of a global procurement team – paid dividends in helping to effect cost savings,” according to the report. “Similarly, the school’s considerable investment, over the last few years, in online and blended learning brought unexpected returns as classes in all degree programmes moved successfully online. At the same time, Executive Education was carefully rescheduled or – in some cases – swiftly redesigned into a virtual format.”
The school also benefited from government support and loan schemes. “In France, the shift to partial activity for many staff members enabled substantial cost savings, while the opening of a government quarantine facility in the Singapore Residences was an unexpected source of revenue,” the report noted.
A LANDMARK YEAR FOR GIFTS AND PLEDGES
Despite the pandemic, INSEAD’s fundraising campaign had what the school called a landmark year. “With €76.6 million raised in gifts and pledges, we surpassed our goal of €250 million three years in advance,” according to the school. “Although we have hit our Campaign target, our aspirations go well beyond this milestone, and the school will continue the good work of changing the culture of philanthropy at INSEAD…A highlight in the year was an all- time record of a €60 million gift from an alumnus and his wife who are long-standing patrons of the school. Their generosity will serve to set up an endowed fund for research and enable the school to buy the land on which our Europe Campus stands.
“The outstanding engagement from our alumni advanced yet another Campaign goal in the year: we reached 42 percent of our 50 percent alumni participation target, with 12,008 alumni donors. The Force for Good Campaign is committed to building philanthropic support to deliver a positive impact on business and society. This collective project can only be realised through the enthusiasm and participation of each member of the INSEAD community and a collective belief in the school and its values. The Campaign continues to transform entire areas of the school.”