Thin line between two disciplines

Should it be called “executive con-cation”? Or perhaps the phrase “management edu-sultancy” would be less likely to arouse the suspicions of regulatory bodies or local police.

Either way, it seems that some companies are turning to business schools for the kind of input that traditionally they might have sought from management consultants.

Gordon Armstrong, marketing director of Duke Corporate Education, which is the top ranked custom executive education provider for the fifth consecutive year, notes that for Duke this trend seems to be particularly in evidence in the oil and mining sectors, where large multinational corporations operate in developing countries.

In the words of Mr Armstrong, these are “big physical operations” which involve “many stakeholders to be managed over a long time”. He points out that in many cases these companies “are, in effect, the town” but, although they often wield great power locally, they also have a great deal to lose.

A company with a mining operation in southern Africa, for example, will need to manage complex social, economic and cultural factors with increased dexterity and local sensitivity if its operations and investments are to be protected and to thrive. It is no mean feat and this is where the ‘edu-sultancy’ comes in.

However, Mr Armstrong is keen to differentiate between the nature of business school and management consultancy input.

He says business schools do not have the ‘horsepower’ to offer the detailed analysis performed by consultants. He stresses that the value added by the business school is that their educational, as opposed to advisory, model encourages company management to use business school resources such as research and faculty to “bring out the discussion” and find their own solutions.

In other words, companies are turning to executive education providers, rather than consultants, because the educational model helps to build in-house capability and expertise. It is perhaps also a more thrifty option.

Mike Stanford, partnership programmes director at IMD in Lausanne, agrees with Mr Armstrong that business schools like IMD provide companies with a facilitative process rather than manpower. He adds that another important differentiating factor is that, as an “educational institute” rather than a consultancy, IMD aims to develop those staff who are involved in the process. As he puts it: “Learning must be part of the experience.”

According to Mr Stanford a company might choose a business school, rather than a consultancy, to help tackle a specific issue or bring about a change “when the CEO wants to engage people, to make them energised and enthused about implementation”.

This engagement might include executing part, or even all of the company’s strategy, “monetising” innovations – that is, turning new ideas into money-spinners – or implementing a reorganisation.

At this point, one starts to wonder what it might be like to be on the receiving end of this type of customised management education. Kai Peters, chief executive of Ashridge, helps out with a brief explanation of a typical day.

It might start with as little as 30 minutes of teaching, the rest of the day could then be spent considering problems which are specific to your workplace. The day has more “blank spaces”, as he puts it. It is less structured and therefore more adaptable.

Mr Peters highlights the different demands which this puts on faculty; he talks of them as “superfacilitators” as much as teachers and notes that this sometimes sits more easily with faculty who have psychology and applied business backgrounds.

He estimates that at Ashridge, which is one of the UK’s larger providers of customised executive education and has its own consultancy arm, about 75 per cent of customised programmes involve overlap between classroom-based teaching activities and less structured sessions focused on company-specific issues. A decade ago, he estimates, this overlap was 10 per cent.

Apart from client demand are there other reasons, then, why less structured and more “process-focused” programmes might be an attractive proposition for business schools?

Bertrand Moingeon, associate dean for executive education at HEC School of Management in Paris, provides an interesting insight. During the development phase of an executive education programme which HEC is currently delivering to 300 divisional managers at Indian Railways, the school interviewed executives and managers. As a result faculty are currently writing cases and carrying out further research about the renewal of the Indian railway system.

Prof Moingeon calls this the “virtuous circle” between executive education and research. “Research is a raw material,” he says. “While delivering custom programmes, new knowledge is created. Executive programmes [provide] an opportunity to do research and this is valued by the corporate partners.”

All in all, the justification for business schools to develop their customised offerings in what some might call a “management consultancy” direction seems indisputable: the demand is there and they already have expertise in the shape of teaching staff and their research.

Troy Eggers, assistant dean of executive education at Columbia Business School, feels that, critically, business schools also have a much larger repertoire of frameworks to offer than management consultants.

He notes that ultimately this is what clients seem to want: to learn how to systematically apply tools or frameworks which will allow them to wrestle with their own specific problems.

However he also notes that companies will probably always prefer to hire management consultants in certain contexts and to achieve certain goals.

As for the business schools, Mr Stanford from IMD points out that not all business schools will have the skills to offer this kind of service and that equally, not all will be interested in doing so.