The Arizona Republic: Once on the verge of calamity, Thunderbird School of Global Management has a resurgence
Corrections & Clarifications: A previous headline incorrectly identified Thunderbird School of Global Management.
Five years ago, Arizona's homegrown international management school, once considered a leader for international business training, was on the brink.
But on Monday, a renewed version of the Thunderbird School of Global Management will break ground with a new building in Phoenix, a physical rebirth several years removed from a tumultuous period that saw an alumni revolt and extreme financial woes.
The building — a five-floor, $67 million project next to Arizona State University's law school on its downtown Phoenix campus — signals a step forward for a once-foundering Thunderbird.
In the nearly five years since ASU acquired Thunderbird, the school's enrollment has rebounded, albeit still below its historical high mark.
The school has brought back some hallmarks that made it distinctive before its ASU rebirth and cut some of the overhead that comes along with running a stand-alone college.
Its master in business administration is gone, replaced with a master in global management, the same kind of degree that brought Thunderbird recognition at its peak. The school has focused in on language classes again. School officials have started undergraduate programs, which Thunderbird as a stand-alone didn't have.
But can Thunderbird reclaim its position as a top offering among business schools, which have become more and more competitive for students and star faculty since Thunderbird's heyday?
The people in charge of the school, and its alumni, hope so.
"What ASU has is a gem. And it's being polished again," said Doug Deardorf, the co-chairman of the Thunderbird Global Alumni Network.
Where Thunderbird was
To understand the significance of Monday's groundbreaking, it's vital to know where the school started and how it got to its low point in 2014.
Thunderbird started as the American Institute for Foreign Trade in 1946 on a former World War II aviation training base in Glendale. The base is where the Thunderbird name originates. The school focused on international business and globalism, built on the assumption that trade and better foreign relations could prevent global conflict, according to a history of the school posted on Thunderbird's website.
Over the subsequent decades, its reputation as a premier international business school grew.
It was the only international business program in the country for several decades, according to a 2013 story by Poets & Quants, a publication that covers business schools. That put the school in a "singular position to capitalize on the growing interest in global management" among the business community in the 1980s, the publication reported.
The school counts some business titans among its alumni, such as the CEO of PepsiCo., the executive vice president of Warner Bros. and the vice-chairman of the Phoenix Suns.
In all, Thunderbird has more than 40,000 alumni in 140-plus countries.
But competition grew, with U.S. business schools entering the globalism game. International business and management schools around the world, like INSEAD and HEC Paris, stepped up their games.
And Thunderbird started to falter because of poor business decisions. Global events, like 9/11 and the financial collapse, contributed to enrollment woes with the school's high number of international students.
The 2013 story described Thunderbird's problems as "long-lasting and self-inflicted, making it a quintessential case study in organizational decline."
Thunderbird lost its distinctiveness. It switched its graduate degree program from a master of international management to a master of business administration, joining a crowded field of business schools seeking the same students. It posted years of financial losses.
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John Byrne, the editor-in-chief of Poets & Quants, said Thunderbird failed to keep up with the increasing competition in the U.S. and abroad as business schools started adding more international focuses to their programs.
"Thunderbird lost its differentiation in the marketplace, which led to a lot of the problems that occurred at the school," Byrne said. "So now enter into this highly competitive world a brand that's lost its distinctiveness, and you got a tough fight ahead."
Then, it attempted to partner with a for-profit venture, Laureate Education, to relieve its financial problems. That move put many alumni off, and they strongly fought it.
"There's a lot of people that got very, very emotional about this. And it broke some relationships, a lot of relationships," Deardorf, who opposed the Laureate move, said.
Larry Penley, who is now the chairman of the Arizona Board of Regents, which oversees the three state universities, was the last president of Thunderbird. It was clear the school's financial situation was "very, very shaky" at that time, and something massive had to change, he said.
"Thunderbird had no choice but to look at alternatives, and it looked at quite a number of alternatives, a number of which ... were in executive session negotiations," he said.
The Higher Learning Commission, the school's accrediting body, denied the Laureate move. Alumni called for Penley to resign. Penley said his job essentially was to find an alternative to Thunderbird as an independent school because it was clear the school was not thriving as it stood.
In the end, he thought the ASU move was the "right choice for a whole set of reasons."
"The emotional attachment to Thunderbird, I have to tell you, is far stronger than what I've seen with other schools and other universities," Penley said. "Even I, as I walked through those halls after I left, it's an emotional experience to be a part of Thunderbird, whether you're president or a student or a faculty member or a staff member."
ASU takes over
Instead of Laureate, Thunderbird was purchased by ASU, a choice that was met with skepticism over whether the school could maintain its identity as part of the behemoth university.
ASU had "raised our hand" a few times over the years to try to help Thunderbird, to no avail, said ASU President Michael Crow. Finally, ASU's offer took.
"We actually thought it would be bad for Arizona and bad for the United States for Thunderbird to not make it," Crow said.
Crow emphasized that Thunderbird isn't a business school and doesn't duplicate ASU's W.P. Carey School of Business. Thunderbird is a global management school. And it's something he saw as an asset to Arizona that would be a shame to lose.
The school, when it was independent, had the budget of a university but was operating at the size of a college, he said. He thought if ASU could lend its size and infrastructure to the school, it had a better shot of making it.
Thunderbird was homegrown Arizona, he said, and "became this unbelievably prominent global institution and produced all these leaders."
"So when we looked at it, we saw it as an unbelievable manifestation of American ideals, American corporate leadership, American corporate responsibility and all kinds of other things. And so we said, 'We need to keep this thing going,'" Crow said.
But they didn't need a 140-acre campus in Glendale. Instead, the school will fit into a 110,000-gross-square-foot building in downtown Phoenix. Undergraduate programs for the school operate out of ASU West in Glendale.
Since the ASU purchase, the school has gone through a lot of change, and some returns to form. ASU cut a deal to swap land with Arizona Christian University for the Glendale airbase campus. The university announced its plan to move Thunderbird downtown in 2017.
A new dean, Dr. Sanjeev Khagram, came on board more than a year ago.
"We're reclaiming the best of the past, rebuilding the foundations for success, and we are reinventing ourselves for the future," Khagram said.
The first few years of the new Thunderbird were rocky and had growing pains, he said. For example, ASU courses are usually three credits, while Thunderbird's were two. Faculty were used to Thunderbird processes, which were different from ASU, he said.
"There was learning on all sides," Khagram said.
Alumni assumed a different role than the more direct influence they had with the independent school, he said. The school had to work hard to regain alumni confidence in the direction of the school and make them see that it would thrive again, he said.
For a school like Thunderbird, alumni support is important.
Many alums have become leaders in business, which can translate into deep pockets. Funding for Thunderbird's new building will come, in part, from philanthropy from alumni.
Beyond money, it's clear the reputation of the school matters deeply to its graduates, and they want to see their alma mater thrive again. There's an alumni advisory board. A global reunion in Tokyo this year attracted hundreds of former students from dozens of countries.
Enrollment has steadily increased each year since 2015, when ASU took over. That year, the school had 461 students between its undergraduate and graduate programs. For 2019, preliminary numbers show 954 students overall.
In July, the school received the green light for five years from its accrediting body, the Association to Advance Collegiate Schools of Business. Khagram said the financial situation had put the school in an uncertain position with accreditors, which now is resolved.
Thunderbird is the only ASU college with a separate brand, known as the "Thunderbird School of Global Management, a unit of the ASU Knowledge Enterprise." Thunderbird's ASU website shows Thunderbird's logo, not ASU's. Other ASU colleges' websites are ASU-centric.
Being part of a larger university helped Thunderbird cut overhead costs that ordinarily come with mergers, Crow said. The school has raised money through alumni giving and tuition revenue, he said.
Byrne, the Poets & Quants editor, called the ASU takeover the "saving grace" of Thunderbird. If Thunderbird is able to capitalize on ASU's reputation for using technology and innovating, while making programs affordable, the school could rebound, he said.
What the future holds for Thunderbird
The future is wrapped around the new site in downtown Phoenix, a contrast from the suburban campus in Glendale.
The move makes Thunderbird more visibly part of ASU, though students have taken classes at the Arizona Center in downtown since last year.
The building is set to open in spring 2021, timed for Thunderbird's 75th anniversary.
The new Thunderbird plan calls for 20 centers around the world, in places like Seoul, Toyko, Dubai and Nairobi. ASU's campuses in Washington and Los Angeles will offer Thunderbird programs. The school is adding online options.
Getting rid of the MBA, everyone seems to agree, was the smartest move the school made in recent years. With so many universities, including ASU, offering MBAs, Thunderbird needed something more distinct.
"That's a really smart strategy, frankly, for the school. And I think that will pay off," Byrne said.
Some alumni may still view Thunderbird with nostalgia, mourning its independence and campus in Glendale, Deardorf said. For the most part, though, alumni saw change as inevitable and are gratified the school is moving in the right direction, he said.
"We're hearing all the right things, and there's the right evidence that progress is being made," he said.
Crow said he doesn't have any long-term concerns about the school's ability to succeed. And his ultimate vision for the school extends beyond training future global leaders.
"The big goal is that it starts catalyzing more global engagement and global economic opportunity for Phoenix and Arizona, No. 1," Crow said. "And No. 2, it becomes this place where new businesses are thought through, managers are produced, problems are solved, ideas are built. It's a further evolution, connecting us to the global economy. So this is a global economy play."
Will it work?
Khagram and Crow pointed to recent rankings from Times Higher Education/Wall Street Journal, which put Thunderbird's master in management program at the top nationally, as evidence the school is back on track.
"We believe we've turned the corner, or we wouldn't be building the building," Crow said. "We believe that this can work. We believe this is a signature product of Arizona."
In reality, the competition for students and top rankings is much more fierce today than it was when Thunderbird was in its prime in the 1980s and earlier, Byrne said. Thunderbird may never regain that position, he said.
"I still think you can be a legitimate player in the game. It's just that it's a harder game to play. It's a very costly game to play. And I don't think you can earn back what it had been in the '80s and earlier," he said.
For Deardorf, who graduated in 1984, there's a part of him that thinks nothing could be better than his years, he joked. But, as he spoke with The Republic, he was reviewing an upcoming speech he's set to give to a group in Manila about change.
You can romanticize the past, he said. But if you really want to move forward, you can't live there. Change is inevitable.
"I think the best is yet to come. ... I think the school can really rewrite its future in a very, very good fashion," Deardorf said.
Republic reporters Russ Wiles and Anne Ryman contributed to this article.