Executive Decisions

Executive education is rapidly evolving to offer shorter, closer, and more focused programs that deliver real solutions to today’s companies.

Executive Decisions

Executive education programs have long been the vehicle of choice for corporations that want to train their most promising talent. Dedicated, short-term courses are designed to help executives develop their individual skill sets and better understand the realities of their industries. But now that companies are operating in the shadow of a recession, they want their investment in executive training to translate into tangible value for their organizations.

Christine Poon, dean of The Ohio state University’s Fisher college of Business in Columbus, has seen that transition firsthand. She came to the dean’s office in 2009 at the height of the recession, after 30 years in the health care industry, including a post as worldwide chairwoman at Johnson & Johnson. During her time at Johnson & Johnson, she says, the company used exec ed to help broaden and diversify the skills of high-potential executives. “But if i were back in corporate America today,” she adds, “I would also want them to be trained to deal with topics relevant to my company. That would be an added value.”

Business educators are hearing that sentiment from an increasing number of corporate leaders. With budgets tight and expectations high, employers want today’s executive education programs to be faster, more customized, more local, and more accessible to their employees around the world. And they want more than better trained employees—they want their people to come back to work with solutions that have immediate and measurable ROI for their companies.

Fast and Focused

According to Mike Stan-ford, executive director of the Partnership Program at IMD in Lausanne, Switzerland, corporate clients want executive education programs to achieve two important objectives: efficiency and impact.“

“Our clients want to focus on how our program will help them get where they need to go most efficiently. They want experiences that add value to the company, and not those that are simply fun or interesting,” says Stanford.

The impact of executive education has been top of mind for employers for at least 15 or 20 years, Stanford adds. But the big difference today is how they define impact in their conversation with IMD faculty.“

Ten or 15 years ago, when companies talked about impact, they asked about return on investment. But it can be difficult to measure return on investment for a learning activity,” he says. “But now we ask them, ‘What’s your objective?’ If your objective is to change behavior, we have tools to measure that. If your objective is to spark cultural change, we can measure that. Our conversations about impact are now more specific. They’re much smarter conversations to have.”

Evgenia Ovasapyan, director of executive education programs at Russia’s Moscow School of Management Skolkovo, agrees. “We’re seeing a decline of interest in open programs that focus on individual skill development and theoretical concepts that are not applied to real businesses,” she says. “Corporations want to see obvious out-comes for their businesses.”

Although exec ed has been moving in this direction for years, the financial crisis has accelerated its evolution considerably, according to researchers at the International University Consortium for Executive Education (UNICON). In UNICON’s November 2011 report “Breaking the Mold on Blended Learning,” Marie Eiter and Toby Woll write that “the recent financial crisis has forced companies not only to scrutinize the costs of executive development, but also the time that executives and upper management are away from the office.

Chief learning officers are placing greater emphasis on the immediate application of executive education in the workplace, Eiter and Woll continue. “Providing a stellar class-room experience is no longer sufficient,” they write. “Companies seek learning that is transferable to the workplace. Executives want to learn concepts and frame-works that can be put into practice and contribute to real-world solutions.”

Duke Corporate Education (Duke CE), the executive education arm of Duke University in Durham, North Carolina, recently released its report “Learning and Development in 2011: A Focus on the Future.” Duke CE asked 142 of its corporate clients to share their biggest concerns about executive training. Improved technological delivery, less travel, reduced cost, and measurable value all made their lists.

The report quotes Cathryn Klassen, vice president of leader-ship and talent development for Sun Life Financial, who notes that company leadership is under more pressure to demonstrate the value of executive development. “This might not mean that budgets are cut—in fact, we made additional investments,” she says. “It does mean there is a spotlight focused on real business value. … Development must be tied to the actual organizational capabilities your company needs to build.”

Closer to Home

As part of their emphasis on impact and value, corporations also want programs that are “shorter, cheaper, and with as much payoff as possible,” says Bill Shedden, director of the Centre for Customized Development at Cranfield University in the United Kingdom, and UNICON’s executive director. “That means they want courses linked to whatever they’re working on right now. They want business schools to integrate their biggest problems into the pro-grams, through mentoring, coaching, and any other career development initiatives they’re pursuing.”

But as their budgets shrink and their expectations rise, companies have made the items on their executive education wish lists even more defined and highly targeted, She-den adds. For instance, to keep costs down and minimize their employees’ time away from the office, more companies are askin for shorter programs offered much closer to home—sometimes on company premises. “More companies are saying, ‘We’d like you to run this program for us, but we want you to run it on our site or at venues closer to us,’” says Shedden.

They’re also asking for more content to be delivered online. Business schools are offering more content via course management systems, video conferencing, online formats such as Webinars and simulations, mobile devices, and tablet computers, says Shedden. “It’s not necessarily ‘e-learning,’” says Shedden. “At Cranfield, we call it ‘networked learning.’” That could mean that course introductions and static content that repeats from one run of the course to the next are offered in online formats that employees can access from their desks. Employers also appreciate when their employees can attend Webinars and do some of their creative work online—or even access content designed for the company’s own technologies and systems.

The iPad has become an especially useful learning tool, says Stanford. IMD began piloting the use of the iPad in its longtime five-day exec ed offering, “Orchetrating Winning Performance,” in June 2010. Since then, the school has developed several iPad apps to encourage executive students to converse and learn even when they’re not face-to-face. “The iPad takes away the feeling that they’re learning only when they’re in the classroom,” he says. “Even when our students are on the street or at the coffee shop, they’re always in a learning mode, sharing what they’re seeing via blogs or social media. Their everyday experience becomes their classroom.”

Not Quite Customized

With customization quickly becoming the norm in executive education, more business schools are facing a dilemma: Should they try to serve all companies? Or target those in a specific area or industry? Schools may no longer have to make that choice, says Stanford of IMD. He notes that what was once thought of as customization has transformed into what really is defined as good customer service. That is, business schools can assess a corporate client’s needs and pack-age or adjust their existing offerings accordingly.

“When a client comes to us with a development issue, our solution might include individual coaching and mentoring. It might include customized modules. It might include strategic use of our open enrollment programs, in which we customize parts of those programs for that company,” he says. “We’re no longer making the distinction that an open enrollment program is off the shelf, and therefore ‘bad,’ or a custom program is just for that company, and therefore ‘good.’ We’re finding that everything we have ca be put together in ways that are meaningful to the organization.”

He points to changes that have occurred in the “Orchestrating Winning Performance” program, which is designed to allow individuals and teams to work on an issue they’re currently facing on the job. Most recently, the school has seen an increase in the number of large groups of executives being sent through the program. Companies now see a program like this as an opportunity to build individual skills sets and effect large-scale behavioral change in their organizations, says Stanford. “That gives a whole new energy to what an open enrollment program can achieve.”

For some schools, packaging their offerings effectively means targeting clients whose objectives best align with the strengths of their faculty. For example, the University of Miami School of Business directs most of its exec ed offerings to the needs of multinational Latin American companies headquartered in its home state of Florida. That decision emerged after close discussions with the school’s exec ed clients, says Amelia McGuire, the school’s associate dean of external affairs and head of its executive education program.“

We had to look at content—what professors did we have, what could we realistically deploy, and how could we build it?” says McGuire. “Then we looked at the existing market here in south Florida. We realized that the sweet spot for us was the Fortune 1000 companies here that were based or doing business in Latin America.”

UM customizes almost all of its executive education courses to each corporate client. Once a company approaches UM to design a training program, faculty visit with company representatives to learn their objectives, then they design a tailored five day course. The courses are taught jointly by faculty and company executives and are based solely on projects pulled from the workplace.

At the beginning of each course, the company’s CEO or country manager comes in to speak to the group and outline expectations. Over the next five days, students discuss topics and work on projects to meet those expectations. On the last day, the school holds a recep-tion where students mingle with corporate leadership and pre sent what they’ve learned.

Fisher College takes a slightly different approach to executive education—it has focused not on a region, but on a segment of the market. The school has partnered with GE Capital to create exec ed programs that specifically serve the needs of middle market companies—those companies with annual revenues between US$10 million and $1 billion. Much of this training is offered through the school’s National Center for the Middle Market. (See “Eye on the Middle Market” on p. 27.)

“We’ll be offering executive education that emphasizes the themes that are highly relevant to this segment: innovation, customer focus, and human capital,” says Poon of Fisher. Courses will be taught by faculty from Fisher and subject matter experts from GE. After students are armed with classroom theory, they identify issues in their companies in one of these areas. Then, they return to their companies to work on those issues, with the help of faculty mentors. In four months, they come back to Fisher to present their project outcomes and receive additional coaching.

By focusing on the middle market, Fisher College can offer pro-grams that are “semi-customized,” says Poon. On the one hand, all students experience a set curriculum, which makes the program easily scalable. But by targeting a specific market and importing real-world projects, the curriculum offers the training these students find most relevant. “We’re still experimenting. We’re trying to find the balance between creating a program that’s neither completely customized, nor completely ‘off-the-shelf,’” says Poon. “By working with GE Capital, we can keep the topics we’re introducing in the classroom relevant to the industry. And by having students apply their training to real projects, we can keep the program relevant to their companies.”

Exec Ed á la Carte

Collaboration is a big and growing part of the executive education experience. In a recent survey by AACSB International, 230 institutions representing 50 different countries were named as partners in collaborative agreements involving non-degree/executive education. In addition, 34 schools representing ten different countries indicated that they desired to initiate more collaborative partner-ships. They’re particularly interested in looking for partners in the Asia-Pacific region, according to 36.7 percent of respondents. Smaller but significant number of respondents would like to collaborate with schools in Europe (18.3 percent) and the Americas (15 percent).

Shedden of UNICON notes that these collaborations are often driven by the companies themselves. Rather than choosing a single business school to meet all of their exec ed needs, many employers are inviting different schools to work with them based on different criteria.

“Many of us mistakenly view all business schools as a homogeneous unit because we’re all in the same market,” says Shedden. “But companies often combine executive education programs from different schools based on their research skills and reputations.”

He points to a program for executives for software company Oracle that Cranfield offers jointly wit IESE in Barcelona, Spain. In that case, says Shedden, Oracle wanted to combine Cranfields strength in program customization with IESE’s strength in strategy. “Today’s corporations are sophisticated purchasers. They know the strengths of the various business schools. They might turn to different schools because they want a different disciplinary focus, or they might want to expose their executives to different cultural experiences,” says Shedden. “Business schools have to recognize that they don’t necessarily know everything.”

Stanford of IMD agrees that the “old boundaries” that separate one business school’s exec ed program from another’s are fading, in favor of more collaborative delivery models.

“So much of executive education today is driven by business needs,” he says. “The days when executives go to Harvard to receive what only Harvard faculty can deliver, or to INSEAD for only INSEAD faculty, or to IMD for only IMD faculty, could soon be over,” he says. “Today, we partner with consultants, behavior coaches, and other business schools so that we can deliver what’s right for the client.”

Virtuous Partnerships

That recognition—that no business school has all the answers—is leading business and business schools alike to forge deeper partnerships to inject exec ed programs with both academic and industry perspectives. Companies are becoming more involved in the design of executive education courses, as advisors, men-tors, and even instructors. (See “Corporations on Campus” on p. 28.)

That level of involvement may produce programs that respond to the needs of the market today and better anticipate its needs five or even ten years from now, says Poon of Fisher College. “When you partner with the business com-munity, your faculty can immerse themselves in the issues companies are struggling with. This creates a virtuous relationship where our faculty rethink the curriculum based on employers’ needs, and employers advance the skills of their workforce based on our scholarship.”

Poon and other educators emphasize that many companies still view executive education as a way to reward talent and cultivate loyalty. But after the recession, its purpose has expanded significantly. For employers, it’s also a tool that will help them improve their operations and do more with less, says McGuire of UM.

“Companies can no longer give big raises or extraordinary bonuses, even as they’re adding more to job descriptions and stretching their people across more responsibilities. Even so, they still want to retain their talent,” she says. Investment in executive education is a way for companies to show their best people how much they are valued, she adds. But by tying executive education directly to their objectives, companies also receive tangible dividends for that investment, in the form of employees equipped with the bolder innovations and smarter solutions their organizations need to thrive.

A Look Inside Deloitte University

Most companies meet their individual training needs by turning to business schools for both open enrollment and customized exec ed programs. But when a company’s strategy becomes so complex—its problems so unique to its corporate environment—it may decide to take control of its own executive training. That may mean building its own corporate university, with a curriculum infused with its most integrated and ongoing strategic needs.

Deloitte Consulting, headquartered in New York City, recently became one of the newest entrants in the community of companies with their own corporate universities. Last October, the company of companies with their own corporate universities. Last October, the company officially opened Deloitte University (DU), its US$300 million, 700,000-square-foot leadership development center. DU is built on a 107-acre plot of land in the small town of Westlake, Texas, just outside of Dallas. The company is currently pursuing LEED Gold certification for the facility, which uses sustainable design principles and incorporates renewable and recycled materials.

DU features 800 guest rooms and 35 classrooms, as well as a fitness cente, running trails, amphitheater, and ballroom. Deloitte expects the university to deliver up to 3 million hours of instruction to 35,000 employees each year.

The company’s leaders made the large investment because they felt the company needed to develop courses that reflecte its specialized focus on client services, explains Diana O’Brien, a managing prin-cipal of Deloitte University. “We rely heav-ily on telling stories—our own stories—of success and failure,” she says. “We also talk about the power of listening. Learning to step back and listen to a group can be very powerful in effecting transformational change.”

The curriculum was designed with the input of Deloitte’s senior leadership, academics, and clients. Courses range from “Welcome to Deloitte,” which offers new hires an overview of the company, to the “New Manager Program,” a weeklong program for the recently promoted. “The Art of Empathy” teaches students to set aside their per-sonal agendas to see issues from their clients’ points of view, while “The Art of Inquiry” helps them think about how to ask the right questions. “Mastering the C-Suite” helps upper-level leaders further develop the listening and communication skills they need to sustain client relation-ships. “Anatomy of a Train Wreck” walks students through real examples from the company where client service went terribly wrong and explores how things might have been done differently.

Tom Hodson has been involved in executive training at the company since he was made a principal in 2005. This year, he has been teaching in the New Manager program. “It’s really a milestone for our people,” Hodson says. “During the week, they attend plenary sessions on leadership, one of which I deliver, and they go through business simulations that involve how they can better manage things like client meet-ings and staff problems.”

Hodson and O’Brien are quick to emphasize the value of academic business training, but note that DU is designed to pick up where their employees’ past edu-cations leave off. “Business schools don’t have access to our culture. They don’t know the specific leadership behaviors tha differentiate us. They don’t have access to how we implement strategy or deal with the intricacies of the tax code,” says Hodson. “Those aren’t topics available in a broad-based MBA program.”

It also would be difficult for a bus-ness school to replicate the sense of community that Deloitte sought to create at DU, he adds.

“Deloitte has a workforce of 50,000 people. You’d be surprised how diverse our community is, even though we all work under the same umbrella. Deloitte University helps our people foster relation-ships with others they normally wouldn’t run into and learn about services we provide that they may not otherwise know about,” says Hodson.

Perhaps most impor-tant, the leadership center will serve as a living labora-tory, where the company can identify and measure the training approaches that are most effective. Deloitte will sur-vey selected groups of employees after they’ve attended classes at DU to see whether they changed behaviors as a result of what they learned.

The information these surveys pro-vide will be more valuable than what the company could acquire from twice-yearly employee reviews, says Hodson. “We want to gather robust data on a regular basis to track the correlation between the learning in the classroom and the quality of our services. DU gives us the ability to measure whether our training drives business results.”

A video tour of Deloitte University is available at www.youtube.com/watch?v=3hSUIamRLDI.

UNICON’s report on blended learning is at uniconexed.org/2011/research/Blended_Learning_Report-Eiter-Woll-Nov-2011.pdf. Duke CE’s report on learning and develop-ment can be found at www.dukece.com/papers-reports/documents/FocusFuture.pdf.