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"If IDP is to continue as a world class company it cannot act small time."

Unis put in $7m for crisis-hit recruiter Universities have mounted an eleventh-hour bid to save their global student recruitment company, pledging up to $7million to bail it out of its cash crisis.
The Australian 24/12/04.

IDP trio under pressure to go IDP Education Australia plunged further into crisis yesterday as a snap board meeting attempted to solve its critical cash-flow problem.
The Australian 22/12/04

IDP refocus on core business IDP reviews its organisation as it shifts from diversification to student recruitment in the traditional core markets.
IDP 17/12/04

Boss's limo avoids cost cutting: After laid-off workers at IDP Education Australia cleared their desks on Friday afternoon and filed out of the building for the last time, they passed a parked limousine and driver. 
The Australian 15/12/04.

Shift to market consolidation to invigorate IDP: IDP Education Australia is to reinvigorate its global network strengthening focus on student...
IDP News Release: 08/12/2004.

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The crisis of IDP has been explained as being the result of the rising value of the Australian Dollar combined with increasing in-country competition. These statements are like saying that the Australian wine export or tourism industries are facing liquidation because of these same factors. Does this reflect an unwillingness to accept personal responsibility?

Some might argue this reflects a lack of planning as well as a lack of strategic vision by the IDP Board. It seems hard to believe that a company like IDP has been really so poorly managed over these recent years and that the Board has tolerated this situation to develop. Has any one of them looked at forward exchange rates? Did they ever consider reasonable contingency plan? How did a company that is a world leader in international education and development services reach this unfortunate state?

Let's compare IDP's 2001 strategic goals (its most recent) with the current state of affairs drawing on mainstream accessible public information:

• High value service provider demonstrated by higher market share: Indications are that IDP market share has been affected as a result of institutions supporting other agents

• Global: with the recent in-country office closures IDP is going in the opposite direction, toward a limited regional organisation focused on a few countries in Asia

• Diversified: IDP has gained a public reputation for concentrating most efforts on one sector of Australian education: higher education

• Leader on development services: IDP shut down its development services business, and the fellowship business could face the same situation once its Bostwana contract expires

• First Choice in International Student Services: there are comments in the industry that institutions are increasingly turning to other agents

• Knowledge Centre through leading research: IDP's top international education researchers already resigned or have been sacked by IDP in the 'transition'. It is expected that this role will be taken over by AEI - DEST, as well as an array of private consultants

• Industry preferred, by being a preferred employer within the industry, able to attract and retain people: Some of its best talents have resigned or were sacked in the transition.

• Strategic partners: Apart from some conference sponsonships, there is no public information on IDP engagement with other relevant private partners.

The cause of this regrettable situation lies with 'environmental factors', according to management. The sacking or resignation of eight senior managers, and countless middle managers means its management effectively allows its institutional knowledge, its corporate knowledge, to be gutted with no human resource contingency. Human resources were IDP's greatest asset.  

The lack of corporate responsibility is reflected in other ways that have long been known throughout the company. Most notably, an insistence on perks such as the chief executive was reportedly hiring of limousines from Canberra airport to IDP's Deakin Offices, in lieu of taxis.

Is there a future for IDP?

 It is arguable that the main factors affecting IDP's performance are not solely environmental, such as the Aussie Dollar or the increasing competition. The future and survival of IDP Education Australia will depend more on the appointment of a competent Board of Directors and senior managers, starting with the Chief Executive.

The symptoms assist neither IDP nor Australia's international education industry - in fact, in some circles it prejudices Australia 's reputation. Most notable was IDP's mishandling of the closing of the US office. This was revealed during the gigantic NAFSA conference in the United States . 

If IDP is to continue as a world class company it cannot act small time. It is time for industry to realise this and find a concerted approach to revamp and revitalise IDP for the sake of this industry and Australia .

From Here to Where?

There are grimmer possibilities such as IDP's being caught in a downward spiral to oblivion. If this trend continues most of the immensely valuable country directors may spin off their own businesses in competition with the rump IDP. Thus the investment by current and ex-country directors (who also 'succumbed to the transition' in the United States, Latin America, Africa, Europe and Brunei) may disappear perhaps serve the needs of the competition. Some in the industry are speculating that IDP's remaining country directors will become ‘tired’ of the current ‘state of things’ and will serve more effectively as independent agents.

The Development business, the original reason for existence of IDP (formerly known as the "International Development Programme") will continue to happen in institutions and private companies. IDP has squandered its reputation and will not be able to easily return to this side of business.

Resignations or sackings of their most brilliant researchers have dismantled the ‘industry’ research capacity, upon which IDP gained a word-wide reputation. Its research is likely to be continued by DEST and its Australian International Education arm, but other private consultancies are already capitalising on that niche - including at least one former IDP country director.

In short, I believe that the existence of IDP is now being questioned. 

This could well be seen as just a self-serving comment from a laid-off staffer. Furthermore IDP's latest media release argue that it is really reinvigorating its 'brand equity' with a focus on core business. Yet how much 'brand equity' is left? 

Its reputation seems to have been substantially undermined. A focus on core business (international student services) in Asia will not happen easily. Asian students are very aspirational and will not look to apply to study overseas through a company that seems in crisis.

As I commented in my presentation in the Australian International Education Conference, the new Asian hubs such as Singapore of Malaysia (or China in the near future) are becoming more attractive for a variety of reasons. Consequently, the numbers of onshore commencing students from these countries and the region will go back to more sustainable levels. Thus income generated from student applications to IDP can be expected to decline.

 In spite of its recent export award, IDP's lucrative IELTS side of business is also under threat. It is important to realise that the ‘next generation TOEFL’ - IELTS offered by the US Educational Testing Service powerhouse - will be a 24/7 examination - making it highly competitive against IELTS. More action is expected on this front.

A final remark: IDP was a great company to work for. It had a world-class staff and great working teams. The question is whether its management and Board can find a business model that can accommodate factors outside its control and maintain a momentum to return the company to its former glory.