Celebrating 60 years of ESAN: My Commemorative Remarks on our Institutions' Shared History

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Last month I had the honor to join ESAN Graduate School of Business for their 60th anniversary celebration. Stanford and ESAN have a long storied history that dates back to 1962, when Stanford at the direction of the U.S. Agency for International Development was given the responsibility to create the first business school in Latin America in Lima, Peru.?

Since its founding, ESAN has grown into an outstanding university and one of the pre-eminent institutions in South America for graduate business education. I’m proud of Stanford’s involvement in this enduring institution, and thankful to have been included in this landmark celebration.??

These are Remarks I gave on July 26, 2023 in Lima, Peru in celebration of ESAN Graduate School of Business’s 60th anniversary:

Welcome

Bienvenidos al sesenta aniversario de ESAN. Es un honor estar aquí con ustedes para celebrar sesenta a?os de innovación y educación de líderes globales.????

Thank you to Jaime Serida and the ESAN Leadership for inviting me to take part in this landmark celebration.?

During my time here,? I have felt welcomed and privileged to witness this dynamic business community and to feel the ‘spirit of ESAN.’?

Reflecting on the ESAN/Stanford relationship:

The relationship between ESAN and the Stanford Graduate School of Business began in 1962. The US Agency for International Development wanted to create the first graduate school of business in South America, here in Lima, and selected Stanford to establish the new school.

Stanford’s dean, Ernie Arbuckle, charged a small group of faculty to come to Peru and open the new school. The leader was a young professor named Alan Coleman, who became ESAN’s first dean. Professor G.M. Oxley led an initial feasibility study. A senior professor, Frank Shallenberger, helped teach the first class of ESAN students in 1963.?

Interestingly, Professor Shallenberger is famous for a class the previous year. In 1962, a student in Shallenberger’s class at Stanford GSB wrote a business plan to import running shoes from Japan and sell them in the United States. Shallenberger liked the idea and became a mentor to the student, whose name was Phil Knight. The business plan became Nike!

The Stanford library has archival material related to the founding of ESAN. One of the documents I found is an old alumni bulletin that outlines the founding team’s vision for the school. It says:

“We had two main objectives. The first was to build a lasting institution well enough adapted to the needs of Peru to secure acceptance among its constituents—the business community, the students, and the Peruvian government. Secondly, we wanted ESAN to offer first-class management training, set high standards, and make that training widespread enough to bring about change.”?

It’s remarkable to read that six decades later and see the reality today.?

What began in 1963 in a single house with a handful of faculty members and 43 masters students has expanded into a thriving university, recognized globally for excellence in business education.?

The evolving role of a business school:

I would like to say a few things about how business education has changed during the period since ESAN was founded, and how it is changing today.??

At the time ESAN was founded, business schools were primarily local institutions, serving the needs of employers. Indeed, Stanford’s founding goal was to educate students from California so they would stay in California. ESAN forged connections to the local business community.??

The central problem for business schools was to establish a scientific foundation for teaching management. There was a growing recognition that business education should be grounded in frameworks from economics, psychology, sociology, statistics, and political science – and connect these ideas and frameworks to practice.

That foundational view has persisted, even as business and the academic fields have grown and evolved over many decades.?

We also can identify at least three fundamental changes in business education that have occurred since that time.?

The first is a shift toward a more global perspective.?

Over sixty years, supply chains, capital markets, and especially the digital economy, have become global. All of this must be incorporated into how we prepare students. And perhaps the most powerful force of all has been the more rapid spread of ideas.

Business education also became global, starting with the creation of schools such as ESAN. This year at Stanford, we graduated 500 students from our core campus programs. We graduated more than 1,000 from our one-year online program, Stanford LEAD. The majority are from outside the United States, in fact, from more than 80 different countries.

The second shift has been toward innovation and entrepreneurship.?

When Phil Knight started selling running shoes from his car, he was very unusual. This year at Stanford, our graduating MBA students will start more than 50 companies.?

It’s actually not one of our program goals: we’re a school of business, not entrepreneurship. But we do believe that part of business education is to give students a glimpse of the future—from emerging technologies to new business models—to encourage them to take risks, and to learn the full set of skills necessary to lead a company.?

I also believe that in today’s world, one of the most exciting developments is the emergence of innovative ecosystems in many countries. In fact, it may surprise you that the largest company started by a Stanford MBA in the last decade was not founded in Palo Alto. It was not even founded in the United States. The company is Nubank and it was started in Sao Paulo.?

So globalization and innovation are two fundamental shifts.

The third shift, which I see powerfully today, is the need to prepare students to address a broader array of societal issues.?

There is a recognition today that to address many of our global challenges, from the need to create broader opportunity, to the effects of new technology, to climate change, business must play a significant role and business leaders must assume some responsibility.?

That ethos has been part of ESAN’s history, but I think it’s fair to say that it has waxed and waned at US business school’s. Today, it is essential.?

It is also the case that universities have a special role to play in addressing societal challenges. As another Stanford dean, Arjay Miller, once argued, universities have two distinctive strengths. They assemble talent from across many disciplines. And they are objective and truth-seeking.?

Today at Stanford, many of our key priorities involve connecting students and faculty at the business school with other parts of the university to work on issues such as sustainability, artificial intelligence, and inequality.?

I am a strong believer that advances on these challenges will fundamentally rely on combining specific knowledge, sometimes technical innovation, with the management, entrepreneurship, and leadership skills that business schools seek to develop.?

After all, we seek to produce leaders and what defines great leadership? Great leaders are able to bring together very different people and get them to work together to solve hard problems.

Closing

At the inauguration of the first ESAN class in March of 1963, my predecessor Ernie Arbuckle observed that “the future of private enterprise in any country is dependent on the quality of its leadership,” and the founding of ESAN would be an attempt to enlarge that reservoir of talent.

Sixty years on, it’s gratifying to see how those things have come to pass.

I’m proud that Stanford has been a part of that story.?

It’s an honor to be here this week to celebrate your accomplishments, and I look forward to more progress and collaboration.