An International Outlook for British Schools – A Case Study
Locations
However, expanding overseas is challenging for any business, and schools are no exception, therefore insights from those who are involved in this sector can be invaluable. In this article, Paul Westbrook, Chief Executive of Brighton College International Schools (BCIS), and Rishi Soni, Commercial Director of BCIS, share their own experiences behind Brighton College's international expansion.
The rationale for international expansion
The first step for any British school considering overseas expansion must be to ask itself why and what do they hope to achieve? When asked about Brighton College's own reasons for expanding, Paul Westbrook identified the following three key drivers that will resonate with many schools:
What markets should be targeted – active vs reactive strategies
Once a British school decides to expand overseas, it can be a daunting process to decide the location of that first international school. Most schools would like to say their expansion followed a strategic plan but, in reality, expansion is rarely so strategic. Schools typically take advantage of opportunities that present themselves. That is not necessarily problematic provided the opportunity is viable.
Brighton College’s entry to the overseas market coincided with the desire of an overseas group to incorporate a quality school within its residential developments. As the developments were not necessarily for sale but for longer term investment, the need for ongoing quality education existed. Paul Westbrook notes, "We understood our partner’s agenda and recognised the overlap with our own agenda: a clear reason for providing long term premium education to a particular neighbourhood. This first school was very successful: within four years, there were more pupils in that school than there were in our school here in the UK."
The success of that first school generated local interest in opening further schools within the region. This was not part of an aggressive strategy for expansion "it was", Paul conceded, "a great compliment and endorsement of our education by both local and expatriate parents and also a clear indication that our partner enjoyed its collaboration with Brighton College. That second school was followed by a third, all backed by the one partner. I think this demonstrates our suitability as a partner and our commitment not just to education but to a specific geography and the pupils within it. It also supported our contention that having a close network of schools in an area benefits our brand and provides the local heads with an immediate peer group to complement their peer group in the UK, with whom they can discuss local market opportunities and any local concerns that may arise."
As with many British schools, the Far East is a natural market and following the success of its first international schools in the Middle East, Brighton College has expanded into Thailand and Singapore.
For some franchise systems, the aim is to open multiple sites as quickly as possible and support that growth with blanket marketing. In contrast, Rishi Soni describes Brighton College's strategy as "not being about the number of schools we open, but rather ensuring we open high quality schools, in destinations where there is demand for British education, an ability to attract and retain the best teachers and the prospect of delivering a sensible financial return to enable us to support the College here in the UK and help fund our existing philanthropic objectives, with a partner that shares our ethos and values". Paul Westbrook adds that typical franchising involves a customer with a limited interaction with the service provider – a night at a hotel or a meal in a restaurant. Education involves a customer (the parent) trusting their most valuable possession (their child) to be educated and nurtured by one school for many years in one setting. For Paul, "the word “franchising” conjures up a relationship that Brighton College does not recognise. We work with our partners to ensure that every child receives a first class education, tailored for them – tailoring does not sit comfortably with the homogeneity suggested by the word “franchise”. We feel an obligation to every child in our family of schools and as a result our agreements are not merely franchise agreements but are set up so as to seek to protect both our first class reputation and the quality of education and pastoral care for the children in our schools."
Identifying an appropriate partner
Finding the right partner is always a challenge, regardless of the sector, but it can be particularly difficult for schools as they seek partners who can combine financial acumen with a philanthropic desire to put something back into their local communities. As Rishi Soni observes, "we are not looking for partners that are purely seeking a quick financial return because developing and operating schools is a long term commitment to a specific location. It takes generally three to five years for the schools to break even and the profits and returns come in the longer term. So we need partners who share that long term horizon."
As a general rule, the relationship between the British school and its local partner is commercial, with both parties seeking a financial return. However, within the education sector there is an inherent tension between this commercial objective and the British school's strong philanthropic aims. This tension can be exposed if the partner does not share the same approach as the British school.
Paul Westbrook recognises this possible tension while knowing that Brighton College has been fortunate to find partners who share its philanthropic aims. Paul goes further, by acknowledging that "part of our role is to help our partners better understand what education can do, the power of education, if you like. I am not certain how many potential partners within our sector are purely financially motivated, I am sure there are some, but we make it very clear that unless our agendas are aligned in terms of the balance between commercial returns and achievement of philanthropic aims, we will not move forward with a partner."
The hotel sector is often compared with education as they both require relatively large sites, significant initial capital and their use is unlikely to change over time, only the badge might differ. However, the differences between the operators in each sector can be stark, with the hotel operator much more focussed on its financial return, hence the interest taken by investment funds in developing hotels.
The hurdles, both internal and external
There is much for British schools to consider when expanding overseas, and so it is for Brighton College as Paul Westbrook comments, "different countries have very different cultures; different requirements in education; different human rights records; different approaches to faith or gender roles and so on. One question for any UK charity is how easy is it for our UK education to work within the requirements of a new market, what aspects of our education may we need to reconsider and how comfortable are we with the resulting breadth of our offering?"
Four of the challenges most frequently faced by British schools are:
Key lessons learned
When asked what advice he would give to any British school expanding overseas, Rishi Soni's advice is simple, "do not underestimate the work involved in delivering an international school and getting it right". Brighton College has been expanding overseas for over a decade and is constantly expanding its team. But Rishi sees the benefit of starting off on the right footing, "at the start of the project, get proper legal advice to support you in your contracts, do your research on the investors and the markets before you go into it to ensure there is demand for the service you want to offer to that market."
Schools also need to be aware of the regulations in every country they are looking to enter – and even within a country, as is the case in the UAE where regulations differ from one Emirate to another. "So right from the outset, truly understand what the regulations are and how they might impinge on the type of education you can deliver."
Paul agreed with Rishi's assessment: "Get the team right, don’t underestimate the task, don't be under any illusions that it is easy, and don't feel the pressure to do something swiftly, take your time to get it right."
There is now more pressure than ever on schools to expand overseas. That pressure increases the risk of taking a short-term decision that comes back and bites a school in the future. An international school typically envisages a 30 to 50 year relationship and as Paul Westbrook says, "if you rush and make a mistake at the outset, you might be lucky if the partner accepts this and is prepared to work with you to improve matters; but on the other hand, you might have a long time to regret it: for these type of long term agreements, when you commit to something, you are committing not just yourself but future generations of the school, its governing body and its senior management team".
Recognition for the education sector
As a final comment, Paul Westbrook believes the UK government can do more to assist British schools expand overseas if it would give greater recognition for the role independent education plays, particularly the export income derived from both UK and overseas schools. "There is an element of emotion and political charge associated with our sector. It can be an unpopular position to accept that having a vibrant independent education sector benefits the UK as a whole, and not just a privileged minority. Of course, we have a desire to be needs blind but we also need to generate income to reward teachers and administrative staff, maintain infrastructure, develop and innovate and so we have to invest in other sources of income to prevent our core education becoming unaffordable and open up public benefit accessibility to those who would not be able to afford it. Education (tertiary and independent sector) are a key export for the UK because British education is seen as one of the very few sectors where the UK leads the world and yet it is taboo to mention it. In any other sector, I feel we might be able to benefit from significant government support to drive our overseas growth. As it is, I think schools are likely to have to plough their own fields. This is fine for Brighton College with the UK and overseas reputation and recognition that it now has but I feel for those schools who are not able to afford a well resourced team or who may lack the financial wherewithal to attack overseas markets effectively and I wish those who find themselves with ambition but less experience and resource all the very best in steering a course through what can be very opaque waters. With an inexperienced team, good advice becomes even more critical."
David Bond is a partner at European law firm Fieldfisher LLP and can be contacted at david.bond@fieldfisher.com or 020 7861 4079.