Interview with Dr István Tamás, the Founder and Rector Emeritus of IBS, on the occasion of the 25th anniversary of IBS.
You were among the 100 wealthiest Hungarian entrepreneurs in Hungary in 1990. You are a businessman. As a successful businessman, why did you feel the need to found a college in 1991, not long after the political transition?
After 1989 when we in Hungary wanted to build a new economic system, a new structure, I felt that a change in the mind of people should take place as well. If there is no change in the head of people, we just slip back where we were; if we want to get out of the previous regime in our head as well, we need to study, we need to learn. This is how the thought that a school was needed was born. I met with the management of Számalk who already were planning to set up a school. They were planning to create the Hungarian franchise of a British college. So, eventually we, Számalk and myself, founded a company together, this was IBS KFT (Ltd), in 1990. Oxford Brookes University already had a British representative in Hungary who has set up an MA program, which was run by another company, Omegaglen KFT. It was this person’s idea that a BA program could be also set up here. So, Oxford Brookes was looking for another partner. This is how Oxford found IBS KFT. This newly founded school had two owners, Számalk and myself and this company received the franchise right from Oxford Brookes University to teach and issue their degree in Hungary. It was the infrastructure of Számalk that we used for teaching; in turn I, as the partner, assumed responsibility for covering financial losses if any. At the time I had another company, Dunaholding and I was also involved in several other businesses. Our special distinction was that the Brookes University accepted and accredited our BA courses in their system, so it was possible to earn a British degree and diploma in Hungary. Then Omegaglen KFT went bankrupt, and Brookes University approached us to take over their MA education in Hungary as well, which we did.
Where was the school located then?
At the beginning of our history, we were on Számalk’s premises, and we moved out in 1996. We moved to Tárogató út where we spent close to the next 20 years.
What was the reason of the move?
I need to go back a bit. As I said, we had an agreement with Számalk, that I would cover any financial loss. This meant that Számalk did not have any interest in reducing the losses; it was a bad agreement, which I protested. Számalk accepted my complaint, and it was a very generous and peaceful “divorce.” We agreed that the “divorce” would take place in the course of a year when I would be the head of the school so that I could see why the school could not produce profit. I really enjoyed this year, the discussions, the brainstorming, and generally looking into how an educational institution financially works. It is a totally different structure than a clearly profit-oriented business venture. It was evident that we needed a better infrastructure, a more appropriate one for the purpose of education. I believe that the thing of first importance for an educational institution is its content, what an institution does. But I also believe that the set-up, the look, the form, so to speak, is also very important: teaching and learning should take place in an appropriate environment. Moving to Tárogató út was good and rewarding, and the location served us well for a long while.
How did you improve the financial structure?
I thought the school should bring profit, or at least break even, and for that, the tuition fee should be raised. You should know that we never received any state support. My opinion was, from the very beginning that we needed to establish a tuition fee that would cover the costs. Although the figures and money were very different at the time, I still remember the figures. I thought HUF 200.000 tuition fee per year would make it possible to break even. But my opinion was overruled, the management at the time of Számalk said nobody could pay this amount and the maximum should be HUF 50.000. So, this was the fee that the school began working with, and no wonder I had to put in a rather considerable amount of money to cover the losses every year! I did that happily, all the more so because my other business, Dunaholding, was really running well. Anyway, I happily invested in education. As I said, I thought and still think that education is the most basic factor in change, in growth. I am also convinced of the need for a new type of education. Hungary’s education traditionally followed a Prussian type of school system and teaching where you “follow the leader.” There is a kind of army-like rigour where the principle is that I learn everything that is thought to be the best. I copy the best. Whereas the Anglo-Saxon type of education says, I want to be the best. The latter type of education produces more independent, more creative individuals. I accepted that our heritage is the Prussian type of education, which is ok, it is even good in certain respects; but we need to have a choice, so I thought, let’s bring in other types of education as well.
It is not very common that a business-oriented person has such a deep interest and involvement in education.
I have been wondering about this as well. All the more so, because since my childhood I have had a rather different major interest. I have always been interested in wood, in woodworking. When my kids, who are adults now, were 1-2 year-old toddlers, I made everything for them, the complete furniture for the kids’ room, of course partly because I could not afford to buy everything for them. I really loved working with wood. But well, by the time I could have bought all the excellent and modern tools to work with, I did not have time for it anymore.
In what other sense was moving to Tárogató út a turning point in the IBS story?
I was also convinced that we needed to get Hungarian accreditation as well along with the Oxford Brookes one. We began working on it, and it took a couple of years. In 1997, we received Hungarian accreditation as well. Since 1997, IBS has been a Hungarian-accredited institution. We needed this for several reasons. I wanted to revive the Hungarian educational system. IBS is a jewel-box in Hungary, a little island, with a strong international character. I do not want to have 5000 students, and I do not want exclusively Hungarian teaching. At IBS 50% of our students come from abroad. I definitely would like to keep this special status. But I also think that we live in Hungary, this is our home, this is the country we love, this is our culture where we want to fit in, and this is why we need and want Hungarian accreditation.
Where did the teachers come from at the beginning of the life of the school and where do they come from now? How would you compare the situation of then and now in this respect?
During the first couple of years the majority of our professors came from some other fields and not from education. They were working in all kinds of businesses, companies, they were entrepreneurs, IT experts, etc., they came from the “market” sphere and they had excellent English language competence. This was a really beneficial aspect of the school. This has changed over the years, but the majority of our professors are still coming from business, diplomacy, multinational companies, etc. They have experience both in teaching and in the special fields they come from.
How did the composition of student body change? When was the point when foreign students began to come to study at IBS Budapest?
At the beginning, we had students who were daughters and sons of diplomats working in Hungary, who sometimes did not return to the home country after their duty was over. There was a young man from Nigeria, for example, who studied at IBS, whose parents returned home after their diplomatic service but he stayed. Every year he went home to Nigeria and returned. In a couple of years, we had 20 students from Nigeria. This was marketing by word of mouth. A few years ago, students from Latin America began to attend IBS, and I do hope that the same kind of tradition of marketing by word of mouth will happen. I believe this Latin American market will grow within about 10 years.
Then, at the turn of the millenium, I thought the most important thing was to reach a size that would make it possible for the school to work and function on purely market-based grounds. The first 10 years economically was the investment period. The profit that was produced by Dunaholding almost completely went into the school. I do not regret it, on the contrary, I am proud of it. I am equally really proud of my other creation, the Palace of Wonders (Csodák Palotája), now run by one of my daughters. There are 160.000 visitors yearly, kids with parents, even fathers who are more immersed in the world on natural “wonders” than their kids!
In this period, the main goal was to have more and more students, which was not easy. Being the first private, self-financed college, we had to work in a context where education was free, that is sponsored by the state. It was hard to compete with this type of education, and there was a certain tension as well. We were blamed for accepting those students who could not get accepted in state education. The policy of our school has always been that we accept everybody who meets the minimum requirements. Statistics show that the proportion of students dropping out and not completing their studies does not differ from other colleges during the first year. We think that it is fairer to accept and give them a chance than excluding students right from the beginning. So, step by step, this tension was eased, as IBS could prove that it is a good, serious school even if you have to pay for it. Looking back from now, this logic is really hard to follow. By the way, it was also because of this that we needed the Hungarian accreditation; without Hungarian accreditation, we would not have had the right to recruit in Hungarian high schools.
We established a year when we accepted 100 students as if they were “state-supported,” though instead of the state I supported them; they did not have to pay tuition. 13 times more students applied for these 100 places, which proves that the school is actually good and strong. These 100 students then began to attract more paying students in the long run as the reputation of the school grew. The number of students grew considerably, from 500 to 1000, between 1997-2003.
Then came the next turning point, and we wanted to have more foreign students. In 2003 Dr László Láng came to work at IBS, first as the deputy vice chancellor, then, from 2012, as rector, and he brought a more professional recruitment system. The growth of international students’ number is due to his and his marketing team’s intensive and consistent recruitment activity during the last ten years.
What was the major change in the recruitment?
We began recruiting students from all over the world. Higher education is functioning as a business everywhere, and there is a big competition in this field. This is a very special type of competition that actually depends not only on the one who offers something, a product, a service, in our case, an educational service. We can never be good enough without the contribution of the “consumer,” who is the student. If I have a good product, a great car, even the worst driver can buy it and own it. But education never can be good without an engaged, hard working, open student. It is not enough that the school and its professors are excellent; good students are needed as well.
It is also rather well-known that you are helping students when they get out to “real life.”
Well, this is rather complex: to help students requires time and money. I have never given money just like that, here you are, do something. I never do this, I want to know not only the idea but also how that idea was conceived, how a business plan was built up, how you want to step out to the market with that product. This demands consultations and thinking, and it is very time consuming. I think that it should be the policy and interest of a business school that its students go into real business. Sometimes the person who comes to me with a request after our consultation leaves with the new recognition that he/she did not really think over what he/she wanted and that it is really not his or her piece of cake to go into business.
There were some major points of change in the life of IBS in the past few years, as well.
Yes, I consider one major point when we moved to Graphisoft Park. As I said, the Tárogató út campus served us really well and for a long time, but IBS has changed. Now we have a strong business profile, and our location, in the Hungarian “Silicon valley,” reflects our change as well. We are in a business environment, among multinational companies, where the old and new meet. The Óbuda gas factory was a very modern project in its time, and we both join this tradition by taking up the refurbished buildings as our place of education and as the source of the latest, most up-to-date points of view in business. Another important point was the acquisition of Budapest College of Management (Általános Vállalkozási Főiskola), which is a real win-win situation.
Did you teach for the school or did you ever consider teaching?
When we began this conversation, you asked me about how I decided to go into education, and although I myself I do not teach, there was a time when I gave business consultation classes. But I realized that my real field is face-to-face consultation and not teaching in a class. I believe that we need to pass on values and not just lexical knowledge. Look, it seems as if technology could provide us with everything. With the help of a computer and internet everything can be accessed within a short time. Yet this does not make somebody an intellectual. We need to build up this intelligence which can come from personal connections, from conversations between teachers and students. Sometime I might set up a special school. My ideal is the Greek type of master-student relation when the master learnt as much from his student as the student from him. I have four kids and I have very intensive relationship with each of them, but what I like most is when I talk and spend time with them individually, with one at a time.
At the celebration you also mentioned it happened more than once that a former student’s son or daughter studied here. So, IBS has “raised” two generations. How do you feel about it?
It is really interesting that we have a lot of students who came here from a family business to study. They complete their studies and go back to the family business, and they have conflicts with their parents. They say, Daddy, this is not the proper way to do your finances. I must admit that I experienced this phenomenon in my own family. Kata, one of my daughters is leading the Palace of Wonders, as I mentioned. When she began this work we were in contact on a daily basis, we consulted about it. Now, I see that there are things that she still consults with me, but she does not always need my advice. She resolves situations, sometimes in a very different way than I would, which is, I must admit, sometimes much better than I would have done it.
Sometimes I am walking in the campus and I cannot decide if the person I see is a student or a professor. . . everybody is so young. But this is a wonderful feeling.