Caspian Business Journal

The Harvard of the Steppe?

The New University of Astana’s ambitious plan to offer a Western-style business education is just a part of Kazakhstan’s goal of becoming an education destination.

This past April, three representatives of Duke University’s Fuqua School of Business sat down over tea in a windowless conference room at the Almaty Holiday Inn with the CEOs of some of the largest foreign corporations in Kazakhstan, among them Citibank, HSBC, Nestle, Proctor & Gamble, Chevron, Honeywell, and Philip Morris.  The meeting, organized in part with the help of the American Chamber of Commerce in Kazakhstan, represented but one more step in Kazakhstan’s tremendously ambitious path to make its capital, Astana, as attractive a destination as the West for education.Bek Zhainazarov, Director of Business Development for the New University of Astana (“New University”), articulated the vision.  “We already have a partnership with Duke University’s Fuqua School of Business to build our program in business education,” Zhainazarov said, “and the foundation has been laid.”  The New University’s goal was simple: that Kazakhs not only could stay but would want to stay in Kazakhstan instead of going abroad for education.

Richard Staelin, Professor of Business Administration at Fuqua, explained that the gathering was so that Duke can assess the needs of the corporate community.  He was buttressed by Dean Thomas Keller: “What we would love from you today is what companies such as yourself and others would expect this university – the New University of Astana – to deliver”, said the Dean.

What was missing today among Kazakhstan’s managerial and professional class? Most foreign CEOs agreed the answers were “critical thinking,” “decision analysis,” and “strategic thinking.”  “There’s trouble thinking outside the box, and a need to push people to think conceptually,” explained Walter Daniel, a partner with the law firm of White & Case LLP.  But there was disagreement over whether that gap could be filled by a full-time two-year MBA program, a part-time executive MBA or eMBA program, or shorter two-week courses that could be tailored to company needs.

Unsurprisingly, many of the companies had their own internal training programs for promotion which would naturally compete with training by New University professors.  Michael Jopson, General Director of Nestle Kazakhstan, agreed that “the eMBA is an alternative to sending our managers to another part of the world for experience,” which would address one of the major issues for Nestle, “succession planning.”  As Jopson put it: “At first, everybody who comes in with the company are expats, but then who do you get to succeed?  We need to bring the Kazakhs who work for us up a level.”

Daniel Nagy, Duke’s Associate Dean and Regional Director for Russia, CIS, and Europe asked if there were other areas that companies wanted a particular focus on other than abstract thinking to which some roundtable members answered “leadership” and “management in general”.

The New University is meant to be a carrot, not a stick, and the conversation turned to whether foreign corporations will choose to send their employees there and, perhaps more importantly, whether young Kazakhs will choose the New University over institutions abroad.  Daniel Connolly, CEO of Citibank Kazakhstan, raised this issue in terms of opportunity cost.  “If they have the money they’ll go off to get the brand,” he said.  The task for New University, then, was to provide a diploma that has the equivalent or nearly equivalent branding power, but without the expense of business schools in the United States.

Nervous laughter erupted to Dean Keller’s question regarding whether the New University would have its MBA program in Almaty.   The Dean had returned to the issue of whether the full-time MBA or part-time eMBA would be more immediately practical.  The eMBA came with the challenge that it would presumably require students to study in Astana even if most businesses are located in Almaty.  Would the New University have its MBA program in Almaty?  No, came the answer from Zhainazarov, and some stifled chuckles by companies.  A truly competitive eMBA program would be intense, just like eMBAs in the United States, another complication in light of the already strenuous environment that many young managers find themselves.  “We work them hard enough already” was the consensus.

The executives agreed that for there was no truly single gap in knowledge, and thus no silver bullet.  Companies had managers who had been trained in the Soviet system, and who may or may not have a command of English.  On the other hand, explained an executive from Philip Morris International, there were young and well-educated Kazakhs who had excellent English, but little (as yet) work experience.  For these unmolded individuals – managers they were not, but could be – the question was whether an MBA was really a necessary next step instead of years out in the field.

Kazakhstan is not the first to build an educational hub in the steppe.  The Soviets constructed Akademgorodok (literally, “Academy town”) out of whole cloth on the outskirts of Novisibirsk in Russia, a mere 600 miles to the northeast of Astana.  Akademgorodok was, and still is, a sprawling center of dozens of institutes and of scientific research in the area.  What distinguishes Kazakhstan’s efforts, however, is that it has reached out to top Western institutions to make their programs and degrees competitive.

Is the missing ingredient in the alchemy of transforming institutions hiring Western consultants like Duke’s Fuqua? For some time, Kyrgyzstan has retained something of a lock among Central Asians as the most appealing place for higher education.  Bishkek’s many universities play host to thousands of students from the five Central Asian republics.  American University – Central Asia is located there, and a recent study provided that it may be the only university in the region where students cannot regularly buy their grades.  Indeed, the Times of Central Asia recently reported that an influx of Chinese students, many from the Xinjiang region, was becoming felt among the Turkic populace.  Among the top reasons given by the Chinese for why they came to Bishkek is the same as can be heard by any other student: expense and convenience.  Bishkek, of course, has become less desirable as its stability slides.

Astana, however, is clearly not looking to offer the same choices as Bishkek.  And Kazakhstan is the one Central Asian republic that has engaged in a far-reaching program of sending its future professionals abroad for Western education.  Known as bolashak, the program offers the promise of an education in the United States or Europe in exchange for returning to Kazakhstan to work for five years.  There is no question that the bolashak program has provided many young Kazakh managers now employed by the CEOs taking tea with the representatives from Duke’s Fuqua.  Kazakhstan not only wants a professional class, however, but one trained on home soil.

While the New University is Kazakhstan’s most ambitious foray into internationally competitive higher education, it is not its first.  Kazakhstan has an MBA program taught in English by professors many of whom are foreign.  It’s the Bang School of Business at KIMEP, otherwise known as the Kazakh Institute of Management, Economics, and Strategic Research.  The MBA program there advertises itself as one that “trains leaders who can manage effectively and transform successfully organizations in Kazakhstan and internationally.”

Indeed, KIMEP professor of taxation Thomas Balco was part of the discussion with the representatives from Duke and top executives.  And Professor Balco agreed with Citibank CEO Daniel Connolly when the latter explained that while KIMEP was already inputting MBAs into the Kazakh economy, those MBAs did not necessarily add value to the individuals in their capacity as employees, and that until they did, the KIMEP MBAs would not provide businesses what they needed.

Duke’s involvement is limited to developing a graduate program, and does not include developing any undergraduate programs at the New University.  Dean Nagy stated at the meeting that the timetable was “aggressive,” and that they wanted to have the program ready by 2012, aiming for an opening of July 6^th.  Even before then, however, short courses and smaller certificate programs could be developed. As Professor Staelin put it, the set up will be “fast” but the product will still be “high quality”.

By the end of the meeting, the conversation once again turned to branding, something guided by perception, opportunity cost, and expense.  Professor Staelin explained that at least some 50-100 individuals per year would be needed to do the MBA or the eMBA.  Would it be difficult to fill because the diploma says “New University” and not, in fact, “Duke”?

It is a question to which Kazakhs themselves seek the answer.  I talked with a Kazakh student, Ayzhan, who had studied for a year at a high school in the United States with the FLEX (Future Leaders Exchange) program offered by the U.S. state Department.  Ayzhan, a top student with an English fluency that any high-achieving Central Asian would be jealous of, was considering returning to the U.S. for her undergraduate degree and was curious about an American’s perspective of KIMEP and the New University of Astana.  Her question was the same as the CEOs:  Without Duke’s actual name on it, would the New University provide a good education and, perhaps more importantly, a diploma that would command respect?  Ayzhan is only one of thousands of Kazakhs who want to live in Kazakhstan, but still receive the best education possible.

Today among universities, respect tends to correlate with age: Oxford has been around for nearly a millennium; Harvard and Yale were founded before the United States was the United States.  Duke, however, is a case in point for how a university that does not necessarily have the luxury of age can establish itself as among the top in the world.  Young by comparison to many of its peers, Duke in general and its graduate schools in particular have surged into the top ranks in the past few decades.  For Kazakhstan, then, the question of whether the New University will become a choice for those like Ayzhan will not be answered for some time.  And indeed, whether the New University’s MBA program makes financial sense in the short-term is not the immediate issue; rather, it is one of long-term economic sense.  The frankness of April’s meeting, and Kazakhstan’s choice of the Fuqua School of Business as a consultant, are auspicious.