Pedro Nueno´s 10th Anniversary as Executive President of CEIBS

Let’s Talk About China

When he took on the executive presidency of the China Europe International Business School (CEIBS) in 1995, IESE Professor Pedro Nueno vowed to devote a total of seven years’ time to the project before retiring. A decade later, he explains what inspired him to trail-blaze the development of a business school in the 1980s in China and why China has since stolen his heart.

If you want to make Pedro Nueno smile, talk to him about China. Nueno has spent 20 years on an educational project in China that has cost him lots of his free time and dedication. Yet, Nueno talks passionately about the work involved in bringing to life a seemingly impossible project that now boasts a 40,000-square meter campus, 8,000 students every year and a reputation that puts it ahead of some of the top business schools in the U.S.

IESE has a special relationship with CEIBS. Though the Pudong, Shanghai school is independent of IESE, IESE professors frequently teach there and organize modules and special programs. Pedro Nueno reflects on how it all began.

During the ceremony awarding the “Grand Cross of the Order of Merit” to IESE Professor Alfredo Pastor, you explained how CEIBS began like one of those jokes ...
... with an Englishman, a Spaniard, a Frenchman and an Italian ... some of the members of the European Foundation for Management Development (EFMD), where at the time I was executive vice president. I remember, among others, Maurice Saias and Claudio Dematte. Looking at the way the world was going at the time (it was 1983 or 1984), we commented on the fact that China had been open for around four years and thought about the possibility of doing something there. We decided to check out the lay of the land and discussed the possibility of taking European management to China. I was just one of a group of people. Perhaps I represent its continuity – still there more than 20 years later – though it was always an international and open project from the very beginning.

How did the idea of taking European management to China take shape?
We launched an MBA program in Beijing in 1984, at CEMI. It was a small MBA program, lasting two years, but it worked. We formed an academic board. I acted as president and all the leading European business schools like INSEAD, London Business School, IESE, Bocconi and IMD were represented. We looked for professors who might be interested in the project and would help by giving classes. The first person at IESE to express an interest was Professor Jaume Ribera, and he took part in the first phase.

When we saw that the project was going well, we decided to expand, though in Beijing the pace was very slow, so we looked for another partner who would allow us to develop in the way that we wanted to. The Shanghai government expressed great interest. We gained the support of the European Union and a new school was founded, CEIBS, set up as a joint venture between EFMD and Shanghai’s Jiaotong University.

And it grew ...
Yes, the school was launched in 1994. We still had no staff, but we managed to open in January 1995 with an MBA program. We did it by leasing back facilities at Jautong University, though we quickly designed the project for our own campus. It was a very ambitious project, led by the extremely prestigious architect I.M. Pei. Pei is the creator, among other things, of the glass pyramid at the Louvre. The campus is now finished and includes 40,000 square meters containing the kind of facilities about which few schools can boast.

Until a few weeks ago, you chaired the academic board. Now you are executive president. What led you to become involved in the project in the first place?
When I did my doctorate at Harvard at the beginning of the 1970s, I got to know people whom I came to admire deeply, for the way they were, what they had done, the way they took me in. For me, Harvard was the cathedral of management, and there I was no one. As well as being no one, I was young, Spanish and not only that, I was called Pedro. I could easily have been one of the waiters in Harvard Square, but they nevertheless treated me very well.

I got to know professors like George Dorio and Frank Folts. Folts was in charge of the managers who would have to reorganize American business to fight the Second World War. After the war, he launched programs for managers at Harvard. He also helped to create schools in Europe (he was at IESE), in Central America and in Japan. George Dorio had participated in the foundation of INSEAD. What really struck me about all these initiatives was that they were not in it to make money but merely because of their conviction that as Harvard professors they could help to build bridges in the service of development and peace. This was what inspired me to dedicate my time and efforts to a project like CEIBS.
In your case, where has this dedication led?
My aim is to have given 10 percent of my time, seven years, without personal gain, to help promote CEIBS by the time I retire. I think I have devoted about three years so far, so if I didn’t spend so much time at the beginning I will have to make a real effort now. This is my contribution, free of charge.

However, there is another, perhaps more selfish motive: learning. Many IESE professors have participated in the creation of schools in other countries. This represents real international experience, because giving a class in a school in Latin America is not the same as helping to create it, organize it, look for funds, design the most suitable programs for each region, etc. For me, China held the lure of learning to get to know the environment by creating a school.

IESE has supported these initiatives in many parts of the world. However, in the case of CEIBS, IESE was not behind the project as such, though it has always made it possible for its professors to help with the school’s development. Some of the school’s faculty members have played a key role in CEIBS’s evolution. One such teacher is Alfredo Pastor, who has managed the school over the past three years. He lives there in Shanghai and has overseen the school’s tremendous advance. As well as IESE professors, I could give you the names of 50 more people who have been important in the school’s young history: its first dean, Joachim Frohm, who we engaged in 1995 and who had to start from scratch, and Garet Dyas, who had been the MBA director at INSEAD and who designed the school’s MBA program, along with IESE Professor Jaume Ribera.

Where do you find the time and energy to continue with the CEIBS project, to travel constantly and to keep up with your classes at IESE?
Not many holidays and not many free weekends. This has been my life. Up to now, I have managed, and my family has understood because they appreciate the importance and magnitude of the project. My wife and my children have all heard me talk a lot about CEIBS, and they’ve visited on occasion.

China and the Rest of the World

One gets the impression that many in the West woke up late to what was happening in China and only recently realized the true power of its economy.
It’s true that there are people who seem surprised that China is working. I still meet people from time to time who will remark, “This China thing is working, isn’t it?” I reply that “this China thing” has been working for more than 20 years. It happens in the U.S., too. You only have to recall the surprise expressed when Lenovo bought IBM’s PC division. On this subject, the dean of one of the top business schools recently told me that he didn’t understand why his professors were not falling over each other to do something in China. This hasn’t happened at IESE, where we know a lot more about China than many of our colleagues at U.S. business schools.

From a political point of view, where is China headed?
China is evolving towards what it calls a social market economy, a market economy in which certain social aspects are important. Everyone enjoys certain minimum conditions. It reminds me of Europe in the 1960s when there was strong state intervention and the project for the construction of a welfare state, in contrast to the American approach. This humanist economic approach is shared by those responsible for the Chinese economy, and that is the direction they are taking. Of course, they are coming up against the imbalances that arise in a poor nation that is coming out of poverty, with some regions growing at 15 percent while others only reach 3 percent.

Is there a risk that the country may suffer some sort of upheaval that might endanger its stability?
I don’t think so. Many people in China have seen how the country is growing and a lot of them know what has to be done for it to continue this way. In these circumstances, I don’t believe they will be tempted to allow conflicts to arise, like Spain did during its own period of transition, even though many thought that the country would explode again after Franco died.

There is Life (for Europe) After China

Do we in Europe have any reason to be scared of China’s strength?
Age, experience and traveling give you a certain perspective. I believe that in China we could see something similar to what happened years ago in Japan. For example, Japan revolutionized the automobile industry and launched its brands throughout the world, selling high-quality products. There were many over here who thought that Japan would run us off the road, but by the 1990s Europe had learned and digested what the Japanese industrial system could offer. And Japan itself made certain mistakes, losing its competitive advantage. Now it’s spent 15 years paying off its debts.

I believe something similar will happen in China. As China improves its healthcare, its pensions systems, its welfare, with 700 million people working in the industrial sector, it will have to deal with imbalances. This will have a cost which will have repercussions, for example, on the workforce. In Europe, we are reasonably competitive and have identified where improvements can be made. Chinese businesses will increase their costs to a point where we will achieve a certain balance. Some sectors will retain their competitive advantage in China and some will retain it here. For that reason I like to think that “there is life after China.”

Supported by IESE

You began your career at IESE. How has the school fostered your development?
I owe IESE everything, because it has let me create a professional career that I find rather strange but nevertheless thoroughly satisfying. One thing that I would like to stress is that I have always felt free here. I have always acted with the utmost freedom. Other schools, for example, have made it difficult for their professors when they wanted to give classes at CEIBS. IESE has never done that with its faculty. I am sure that all the teachers from this school who have traveled to CEIBS will tell you the same thing.

For my part, I have tried to offer IESE all my efforts and a lot of ideas. I have put pressure on myself to launch new projects. And I believe I have always been loyal to the school and its dean. Nevertheless, as we have always taught at IESE, many of the things that have emerged over the years come down to teamwork. I have been able to work with exceptional and highly selfless people who have brought many projects to fruition.