Training top people to lift top line

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Once again, executive education programmes are on corporate America’s shopping list.

Although, for the past few years, there has been some cooling of interest in spending on training as companies have scrutinised their costs, business schools now report that corporations are still keen to pay for managers to study on executive MBA programmes.

However, the focus of attention is shifting.

“I’ve seen these ups and downs before, and when the business comes back - and it always does come back - it comes back a little differently,” says Marie Eiter, director of executive education at MIT Sloan School of Management.

What Prof Eiter, and other business school faculty, have observed is that today, companies are looking at executive education as a means of enhancing top-line growth. “In the late 90s, there was a real push for impacting the bottom line in terms of ways to reduce expenses,” Prof Eiter explains. “Now, the real push is for innovation and new business development.”

Much of this push is being reflected in the greater demand for custom-designed programmes formulated for groups of executives that do not necessarily result in a degree, as organisations look to executive education as a way of finding solutions to specific business issues that relate directly to their corporate strategies.

“The EMBA is a part of that - but the conversation is around more organisational capability - and the learning profession is having to team up with the line manager on this,” says Cam Danielson, executive director of Kelley Executive Partners, the executive education arm of Indiana University.

And while companies are certainly not ignoring the development of their high- potential executives, some business schools report that organisations are reducing the level of financial assistance they make available for managers who want to take an EMBA.

“There have been caps put on how much the corporations are prepared to pay for tuition expense and the tuition fees have been going up, so there’s a gap there,” says Hugh O’Neill, associate dean of Executive MBA programmes at Kenan-Flagler Business School at the University of North Carolina. “And [companies] seem to be more selective in terms of who they’ll support - so you might have people from the same company in a cohort and they’re getting different levels of support.”

However, in an economy where they are less inclined to hire new staff, companies are realising that they have to develop existing employees - both as a means of retaining top executives and ensuring those executives are equipped to deal with new business challenges. “Talent management is getting a lot of attention and that term is now coming to refer to a strategy that a lot of firms are exploring,” says Prof Danielson.

But rather than, as was common in the past, sending them on to full-time MBA programmes, an executive programme is now the favoured route.

“Companies have been burned in sending people to MBA programmes and not having them return to the company,” he says.

“So we see them bringing the EMBA into the company.”

At the same time, the decision-making process as to which executives to put through business school is becoming more decentralised.”

Companies are saying to their various subsidiaries this decision can be made at the level of line managers, says Howard Kaufold, director of Wharton’s MBA for Executives Programme.

“It’s part of a general trend in corporations to decentralise and push more of the decisions and accountability into these business units rather than into a central function.”

But if decision making as to training requirements is being taken at a more local level, the relentless advance of globalisation continues to persuade companies and individuals that an EMBA with an international flavour is a good idea.

In the past few years, a growing number of schools have been offering these global EMBA programmes, whereby students spend chunks of time at different campuses round the world.

The Trium global EMBA, for example, is offered through a partnership between the London School of Economics, New York University’s Stern School of Business and HEC Paris, Graduate Business School.

The schools work together to design the programme and graduates earn a single MBA degree issued jointly by all three institutions.

Schools have followed different routes in the race to go global.

The University of Chicago has campuses in Barcelona and Singapore, while the Kellogg School at Northwestern University has partnerships with local schools in places such as Germany, Israel, Hong Kong and Canada. Kellogg is also establishing a campus in Miami, expected to open next autumn.

Prof O’Neill says that - despite its launch at a time when business travel was experiencing a dramatic drop in volume - demand is increasing for Kenan-Flagler’s version, the OneMBA. The programme offered in partnership with the Chinese University of Hong Kong, Fundacao Getulio Vargas in Brazil, Mexico’s Monterrey Tech Graduate School of Business Administration and Leadership and Erasmus University’s Rotterdam School of Management.

“We faced the [Iraq] war, hurricanes, Sars - I don’t think you could have created a worse set of conditions to start the programme,” says Prof O’Neill.

“And in some cases people didn’t want to travel. But it’s continued to grow and, for the most part, people recognise that we have to continue to encourage the growth of global communications.”

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