Going global?
Ian Allsop outlines a scenario to help decide whether to set up an international operation
In this imaginary scenario a head is keen to open up a British school overseas since other schools are doing the same. As well as furthering a commitment to high-quality educational provision in line with a long and proud tradition and ethos, he hopes that it will bring in some much-needed cash. It could beef up the school’s bursary programme to satisfy concerns about compliance with public benefit. It could also provide a funding boost for some capital projects, which governors have identified as being crucial to long-term sustainability. But will it be expensive and risky? How do you begin to plan such an ambitious undertaking, let alone put it into action?
Background
The number of independent schools setting up offshoots overseas is increasing. That international schools, particularly British ones, have been successful is because of a continued demand for high-quality independent education in many areas of the world. There is still a premium for the ‘English’ quality brand and curriculum, so these schools are attracting developers and investors. Areas such as China, the Gulf states and southern Asia have seen significant growth, as have central Asian countries where oil and gas wealth is driving economic growth.
As well as providing an extra source of income, what better way to instil confidence in parents than to say you are a global educator? There are further advantages in teacher and pupil exchanges and developing a global alumni network.
Grounded in concrete
Harrow, Brighton College, Sherborne and Repton, among many others, have taken this step. There’s a temptation to think “why not us?” But such a strategy needs to be grounded in more concrete reasoning than mere empire-building or keeping up with the Joneses. It is important that a carefully mapped process is undertaken to identify the school’s vision.
There are many considerations for governors before they even start discussions with overseas partners, let alone begin building work. It needs to be well-thought through and costed, with the risks clearly defined:
- Does it fit in with the school’s strategic plan?
- Do the benefits stack up?
- What will it cost both in terms of time and upfront investment?
- Will it alienate parents at the home school who fear the school will lose its focus? (and possibly fear a fee hike to cover any investment).
Registering the risks
There are opportunity costs in terms of school time and effort and the risk of a diversion of focus to the new venture at the expense of the home school. It will involve the school working with people often at arm’s length, and it will also be reliant on local agents or organisations acting on their behalf. The school will need to have discussions around local regulatory and legal requirements, which cannot always be conducted without a suitable entity put in place.
There’s a reputational risk as the brand of the school is immediately associated with the exercise, no matter whether the school proceeds with the venture. Confidentiality is crucial. The international sector has many organisations attracted to making profits where there is a strong market, so schools should keep projects secret during the planning stage.
Questions to consider
Once these risks have been assessed and accepted, governors should address the following questions:
- What is the educational rationale for launching overseas?
- How do you quantify the benefits for your school?
- How and when should you engage stakeholders at your home school?
- How will a governance structure be established at the new school?
- How do you decide the best location and target market?
- How will the design and construction be financed?
- What is the timescale?
- How will you manage the additional workload without compromising educational quality in the UK?
- How will you protect your reputation and brand?
Model thinking
Once you’ve undergone thorough pre-planning and made a case for the benefits, you may feel comfortable to proceed, but only after answering one final question: what type of operating model should you use? The most common one is a franchising arrangement, but there is a case for going it alone.
Option 1
Franchising – the attraction here is increased income from service charges. Many agreements feature no investment from the school, except time, energy and some basic costs. The risk is that by letting a third party essentially own and manage the school in your name, you risk poor performance reflecting badly on your brand. It is essential to delineate responsibilities so that the operator runs the business, but the school manages the educational side.
It is critical that exit points are determined by the governing body, both prior to opening and once up and running, though due diligence and strong working relationships should significantly reduce risks once the school is operational. This can be ensured by the permanent position of school representatives on the international board.
Option 2
Going it alone – Marlborough College Malaysia is a genuine expansion of the home school. Taking the starting point that good governance is vital in the running of any educational establishment, this model helps it maintain a greater level of control and avoid the risks associated with franchising. Management and governance is directly linked to the home school. The operating company in Malaysia is directed by old pupils of Marlborough College, as well as the current and previous masters. This has been invaluable in ensuring the transfer of Marlborough’s ethos, culture, values and strengths to Southeast Asia.
However, such an approach will be costly in terms of both time and money to get the school up and running, even if you can identify a dedicated and able group to take on management and governance.
Whichever of these two options you consider, the hard work has only just begun, but if you have carried out the appropriate preparation then the rewards may well be worth it. Or you may have chosen a final option.
Option 3
Decide against expansion overseas – the risks associated with setting up an international school may not be worth it, or the benefits may not be clear. But that doesn’t mean that other people aren’t prepared to exploit your good name in the UK market. In any case, you should consider trademarking your school name in key jurisdictions to prevent its use by a third party. Otherwise you could find it attached to an outfit half-way around the world over which you have no influence.
Ian Allsop is a freelance journalist.