Under the new leadership team, emlyon business school is preparing to meet a new set of challenges with the strategic commitment and support of an innovative form of shareholding. But what's behind this decision to broaden the share ownership? What will be the role of the investors? And what impact will it all have on the School's strategy?
Isabelle Huault, Executive President and Dean of emlyon business school, and Jean Eichenlaub, Managing Partner of Qualium Investissement and President of the early makers group Supervisory Board, discuss this pioneering educational model.
emlyon business school is the first of France's ‘grandes écoles' to turn to private investors. Could you tell us more about this move?
Isabelle Huault: The decision is really a continuation of the School's deep-rooted transformation that started a few years ago. Lyon Métropole Saint-Étienne Roanne Chamber of Commerce, the School's founder and original shareholder, took the innovative step of changing our legal structure in September 2018 to become a Société Anonyme (limited company) called the “early makers group.” It was the start of a process to strengthen the School's equity capital — partly because of the planned reduction in funding from France's Chambers of Commerce and partly to give fresh impetus to the deployment of its strategic plans. It was vital for the School to make this change, so that we could deliver our educational plan for excellence sooner, rather than later. Our plan is all about meeting the new challenges facing the higher education sector today, and the need to provide teaching that embraces two major issues — the environment, and the digital transformation. Bringing private investors into the ownership structure, in September 2019, was simply the next logical step in this evolution.
Why were Qualium Investissement and Bpifrance chosen as investors?
Isabelle Huault: The process was led and managed in a highly professional way by the business bank, Natixis Partners, which took full account of the particular nature of the School and its educational mission. We were able to assess several high-quality projects and to have detailed discussions where we could explain the School's overall plan and some of its specific features. In the end, we signed an agreement that is perfectly aligned with emlyon's model of excellence. The choice was clearly focused on our partners having compatible values and sharing a common vision for the School and its plans for future development. I would also add that the shareholding plan was approved unanimously by the elected representatives of the Lyon Métropole Saint-Étienne Roanne Chamber of Commerce and, before that, it had been the subject of a consultation with employee representatives and had also been submitted for approval by the competition authorities.
What convinced you to get involved in this project?
Jean Eichenlaub: For Qualium Investissement — and I think I can also speak for Bpifrance — it's above all a belief that this pioneering model will provide emlyon with the resources needed put its ambitious strategy into action. We carried out a detailed study of the School, which included extensive talks with the teaching staff, the Chamber of Commerce, and its 2 leadership teams. The School's unique positioning, with its academic and teaching excellence (multiple accreditations, its position in national and international rankings, etc.), along with its know-how in terms of developing new offerings, through a combination of teaching innovation and international partnerships, are perfect illustrations of that strategy in action. Lastly, the quality of its teams and exceptional growth potential are additional factors that figured in our decision. We are proud to be a stakeholder in a sector of the future such as education.
Have you given the School profitability targets?
Jean Eichenlaub: No, we haven't set any. As a candidate for a shareholding, we accepted the objectives that had already been set out by the Supervisory Board as part of the School's strategic plan. Thanks to its entrepreneurial strategy (operating a school as an educational company), emlyon was already among France's leading business schools. With our support, it now has greater resources for self-financing its future development. We have also undertaken not to sell our shareholding for a minimum period of five years.
How does this new model fit with the School's strategic plan?
Isabelle Huault: The arrival of new partners in our governance will not change the School's strategy and positioning, but it will make them more efficient and will accelerate their deployment. The priorities, projects and processes, along with the necessary changes, have all been the subject of lengthy discussions between the School's management and its investors, with the aim of improving the performance of the emlyon group and meeting the expectations of all its various stakeholders. So, we are still pursuing our 2023 early makers strategic plan, with its three main focus areas (digitalization, globalization and hybridization), and we are keen to increase both the pace and the intensity of the work currently underway. But at the same time, we are also ensuring that we maintain the School's academic excellence and the quality of its teaching. In addition, our ambition is to strengthen the School's policy on societal engagement and social openness. Lastly, we want to maintain a balance between the expectations of the School's different stakeholders — as its employees (and soon its graduates) — have also become shareholders in the School.
In practice, how are the investors involved in the School's governance today?
Jean Eichenlaub: Without intruding into the day-to-day management of the School, we are helping Isabelle and emlyon's management teams to deliver their strategy for organic growth by making our business networks available to them, and by providing support where there is potential for external growth. Our aim is to be a partner that listens, that's fully engaged, and that's ready to help the various stakeholders, such as the Chamber of Commerce, the teaching staff, the group's other employees and its alumni representatives. We are working hand-in-hand with the leadership team, acting as a source of both propositions and recommendations about the strategic directions being taken by the board of directors. And we are happy with the way this strategy is developing.
This operation will lead to a capital injection of around €100m over the next five years. What will be the priority projects or resources for this investment?
Isabelle Huault: It's difficult to answer that question at this stage. We are keeping to our current plan, and we need time to decide which major strategic directions should be taken to achieve the vision that we all share. Our investors are perfectly aware of this. The work we're doing now will help us to identify the priority projects that will maintain and further develop our academic excellence, and that will help us to achieve our ambitions. We are having very constructive discussions with our investors and their feedback about our strategy is very useful. emlyon is very fortunate to be supported in this way.