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For many cash-rich corporations, management training is back on the agenda. The question is, who should teach the courses? Management consultancies, publishing companies, NGOs and corporate universities increasingly compete with traditional business schools. What can business schools achieve that the others cannot? What sort of courses are appropriate? And how do you measure return on investment?
An FT panel of experts answered your questions. On the panel were:
Dominique Turpin, IMD President and Nestlé Professor.Prof Turpin has directed customised programmes for companies such as Groupe SEB and Panasonic. He has extensive teaching, consulting and research experience in the areas of marketing and international strategy both in Europe and in Asia. IMD is ranked number one in the Financial Times 2012 Executive Education open ranking.
Michael Canning, chief executive of Duke Corporate Education. Mr Canning works directly with clients to design and deliver customised programmes to achieve specific business and learning outcomes. He has also co-authored an eight-volume book series, Leading from the Center and worked as an independent consultant in the San Francisco Bay area. Duke Corporate Education is ranked number one in the Financial Times 2012 Executive Education custom ranking.
Della Bradshaw, business education editor at the Financial Times.
What is the best option if I am looking to work with eco companies?
Della: Business schools tend to segment their short courses according to job function rather than industry type. So, would you want to work in marketing or accounting, for example? If you are actually hoping to change the sector in which you work, than a part-time degree might be more appropriate. There are not many that focus on eco companies though - Ashridge is the only one I can think of . But environmental companies would certainly recruit for more general masters or MBA programmes.
Dominique: Choose the school that is truly genuine to your values!
I think a business school teaches something different to what a consultant can do, what are your thoughts?
Michael: Many of the best consultants I have worked with have business degrees. It helps prepare you to understand business from a variety of disciplines, critical thinking, and how to frame issues, and communicate effectively. I encourage you to get a business degree if you thinking about becoming a consultant.
Della: My first observation is: do consultancies actually teach, or do they help companies develop and implement strategies? I think the big difference between business schools and consultancies is capacity. Business schools can help you formulate a strategy, but consultancies really make their money helping to implement that.
Dominique: Although consulting companies have dramatically increased their research capabilities, they do not always have the academic rigour and the independence that business school professors enjoy.
How important is brand in selecting a business school for a short course?
Della: One of the real advantages of big brand schools for the individual is that their qualifications are portable, even if you just study on a short programme. If you want to change jobs, having studied at Harvard, Stanford or Insead will always look great on your CV. For corporate programmes, the brand is not as important as the value your company gets from the programme.
Michael: Brand always counts. A good quality course and strong brand is a good combination.
Dominique: Brands are important but remember that brands represent the heritage of the past and not always current and future perspectives.
When I was researching material on management programmes, I saw that many universities offer diplomas or certificates for those who complete their courses, or even waivers towards an MBA. This makes them very appealing, but does the panel think that this is just marketing hype?
Michael: Not all hype. Some courses will be counted toward a degree by some institutions. You just have to check carefully the courses and the participating institutions.
How can business schools justify the fees they charge for short courses?
Dominique: The fees represent the value provided to the participants and I believe that quality has little to do with the length of the course. No school can charge high fees and sell commodities for very long be it for a short or a long programme! It’s important to truly understand the value proposition and check (through alumni) how meaningful and differentiated is the value of the course.
Michael: In many instances, you get a great quality course and top quality educators from well known institutions. These two things are always worth a little more.
How rigorous is the business school selection process for short courses? Do they require the GMAT?
Della: I know of no short course that requires the GMAT. That means that one potential problem of executive education open programmes is that you don’t know until you arrive what the calibre of your classmates will be.
Dominique: If you are talking about short executive programmes, no GMAT is normally required. However, the process is rigorous: The company will select the participants themselves. And since top quality programmes are not cheap, the company will think twice about who to send and what will be the total investment associated to the executive’s development (tuition plus opportunity cost).
Most business investments require a real justification of the returns on the money spent. How would you recommend a company measures return on investment for management training?
Michael: For us, the design of good management training begins by working with the client organisation to create tight links between business challenges/outcomes, to the capabilities required to the performance needed. If designed this way, it is easier to identify and track the markers of desired performance and how those are translating into business results.
In terms of capabilities, the second link, we think about affecting what people believe, know and do. The training should get at a shift in mindset to really change performance.
There are also other ways to measure even more directly. For instance, courses can be constructed to include “business challenge projects” where individuals or small teams apply their new learning (and continue to learn) in the context of solving real business issues.
Dominique: At IMD, we include more and more action leaning work within the curriculum of the programme. This gives the participants the opportunity to apply what they have learnt. At the same time, it gives the company the opportunity to get something back that is truly concrete, such as a new business plan for a new product or a new market.
Since most people go to business school in order to be able to find a new job or even change career, isn’t it a big risk sending employees to do programmes, since they might then have the extra skills and motivation to leave your company? How do you balance executive training with retention?
Michael: It’s a bigger risk NOT developing people. Employee’s intrinsic motivation kicks in when they feel that they are a) valued and that their work matters/is important and b) being developed to deliver even greater value – if you don’t do those two things at minimum then you will only have extrinsic motivation (i.e salary increases) to work with - and that makes you a hostage to the highest bidder but more importantly maintains a transactional relationship which is satisfactory to neither employee nor employer – and the employees will leave because they are unhappy and tell everyone what a bad employer you are.
Della: I remember the director of a top US corporate university telling me that yes, it was bad news if you trained your managers and they left, but even worse was if you didn’t train them and they stayed.
Dominique: Companies are usually reluctant to send their people to MBA or EMBA programmes since the diploma can be a licence to trade skills somewhere else. As a rule, no company wants to pay to educate their competitors! They prefer us to issue certificates, since they do not have the same trading value as academic degrees.
I am a manager turning 50 this year but I am keen to continue working for as long as possible, what kind of courses do you recommend I take to ensure my employability? I would also prefer to be in a class with people my own age, are there courses out there targeted solely towards my age group?
Della: I think we are going to see a lot more programmes out there for older managers, both short programmes and degrees. Most business schools still don’t really offer lifelong learning options, but I know of at least one business school that is considering a fellowship scheme, where senior managers would continue to be involved with the business school after graduation. This might involve belonging to a club of senior managers, getting access to cutting-edge research or regular managerial or sector updates.
Michael: Well, since everyone is telling us that we should consider that retirement will begin when we are 70 not earlier – you have 20 years of development left to go! I don’t believe there are programmes specifically targeted by age – but frankly you should probably seek out programmes where there are a mix of ages.
We have enjoyed considerable success pairing senior executives with more junior executives where BOTH learn from each other – the senior execs get a better feel for the motivations and work styles of their younger colleagues and also learn some new tricks e.g. to do with social networking, working virtually and 1005 digitally.
Meanwhile, the younger employees benefit from the wisdom their older colleagues have and learn to value their experience. So avoid ageist ghettos – get with the young folk – they are the future! Good luck.
Dominique: Yes, there are plenty of courses for 50 and above (e.g. how to develop functional skills, move from a functional job to a general management position, develop governance skills, etc.) Just make sure to select a serious programme in a well-recognised institution!
With inflation in the UK expected to remain above two per cent for the coming year, companies really do need to watch their bottom line. Would it not be better and much cheaper for me to opt for in-house training for my employees via a consultancy? What value added can b-schools bring to the table?
Dominique: In-house training is great to get everybody aligned but does not usually offer the opportunity to mix with people from other backgrounds such as different industries, cultures, functions! Participants in IMD programmes regularly tell us that 50 per cent of their learning came from sharing other people’s diverse experiences.
Michael: That question really depends on the amount of customisation you are seeking and what problems you are trying to solve with the training you are undertaking.
If the problem is unique to your business (something to do with your strategy, for example, or your ability to create a culture of innovation) then a customised programme would be extremely valuable. Working with a consultancy or customised education provider will help you target and build the unique and competitively distinctive capabilities to challenge yourselves and to address these issues on a sustainable basis going forward. In other words, you will have built self-sufficiency in your talent team.
If, on the other hand, the problem you are facing is that your people are too insular, too inwardly looking and need to look outside more and learn best practices from others, an open enrollment programme for a few of your people at a time might just be the perfect solution.
Business school professors seem to have been caught napping when it came to foreseeing the financial crisis. Given that the crisis continues, are they really the best people to offer executive training?
Della: Executive training is obviously about a lot more than banking. In the current crisis, getting the most our of your employees would seem to be a very sensible option, I would have thought.
Michael: To be fair, everyone was caught napping – not just business school professors. In part, this might have been a collective failure of imagination. It was certainly in part due to an inability to see a complex web of systemic interdependencies across the globe.
The crisis has hopefully served as a wake-up call to all to consider that the old ways of teaching executives - frequently based on inevitably historic cases where the outcomes are at least known or can be intelligently guessed based on past behavior - are no longer valid. What is required is a new style of LEARNING (as opposed to teaching) where executives are taught to be more conscious of how they are learning, from where, from whom (what some have referred to as meta-learning) and more thoughtful and deliberate about the exploratory nature of their learning journeys.
Skills in systemic thinking and scenario generation are also more likely to be in demand as executives cope with a future that is more uncertain and volatile, more complex and chaotic and in a sense more “unknowable.” Those institutions – be they business schools, professional learning companies, or in-house learning & development units, will definitely need to challenge themselves as to what the future of learning looks like and what their role in it will be. Carrying on in the same way as they did pre-crisis should no longer be an option.
Dominique: It’s not fair to generalise and put everybody in the same bag! Some IMD business school professors predicted the financial crisis but… nobody believed them.
I’d like to remind you what B. Bernanke, the US Federal Reserve Board said to Reuters on February 28th 2008: “I don’t anticipate any serious problems.. among the large, internationally active banks that make up a very substantial part of our banking system.”
Who do you think the public believed: Bernanke or the IMD professor?
Della, what are the three key messages from this year’s ranking?
Della: I think the key message from this year’s ranking - and from the previous few rankings too - is that customers are largely very happy with the business schools and the programmes.
This has changed dramatically from when we first started the executive education rankings, when we often used to receive complaints about the quality of the other participants - the “bums on seats” approach was much stronger then - and about the facilities, food and accommodation.
The other thing we are seeing is a resurgence in open enrolment programmes and a much more nuanced approach to the balance and interaction between open enrolment and customised programmes. European business schools have performed very strongly this year because they have been quick to recognise the opportunities outside Europe. But US schools are now beginning to compete outside the US too, so things could really change next year.
Given the current economic crisis in Europe, do you think politicians would benefit from Executive Education?
Della: Of course, the big news in Europe is that France has just elected a President who graduated from HEC Paris. Will Francois Hollande be able to use his business skills to rescue us all?
Michael: Unequivocably, YES. We need to bring businesses, governments, inter-governmental and supra-governmental agencies, NGOs and communities much closer together so that they can more easily see and navigate the interdependencies growing in the world today. I wouldn’t necessarily want to see programmes just for politicians, but the notion of politicians sitting alongside these other constituents is of interest. And most interestingly – this sort of programme is happening in emerging markets where the blurring between private and state is more pronounced.
Dominique: Oh yes, absolutely! Actually, we are getting more and more requests from government to educate politicians and public servants (especially in Asia).
At the end of May, IMD will publish the results of its “World Competitiveness Yearbook,” Every year, government officials contact us to learn how they can improve their ranking and ask us what IMD can do to make their policy makers more business educated, more efficient, innovative and successful.
The extraordinary economic growth in developing economies means they are often leading the way in programme commissioning, how are European business schools like yours responding to this? And how do you see executive education developing over the next ten years?
Michael: I think most learning institutions around the world are experiencing growth in areas they may not have considered previously. Just today, our own company is delivering highly customised programmes to small and medium sized business owners in Kazakhstan, one to a large pan-African bank in Kenya and yet another to a Thai conglomerate in Bangkok - to say nothing about the multi-nationals headquartered in the developed world who also ask us to take their executives to the emerging high growth parts of the world for highly immersive experiences so that they can learn to do business there.
However, our goal is not to be travelers and tourists to these places, but to be citizens in these parts of the world – to be citizens not tourists and experience and learn their challenges and also to tap into their creative energy. The world is clearly “rebalancing” and we need to be “in and of” the places shaping the future – all the better to serve their business needs and the needs to those multinationals doing business there. We have to if we intend to continue to make a difference and help shape the future.
Dominique: In my view, many of us are are still behaving like “colonialists,” meaning b-schools professors are going to emerging markets to preach the beautiful theories developed in the West. There is a lot to be learnt from the emerging markets: new business models, new approaches to capitalism, new approaches to serve the bottom of the pyramid, etc.
Let’s not wait ten years, business schools should already pay more attention to what is going outside of the West and be more curious to learn about the new emerging markets and competitors.
For sure, executive education will be transformed by new technology (e.g. internet and the smart phone), new business models (e.g. low cost players, more blended learning), new competitors (b.schools in the BRICs, for example). Some business schools will innovate and thrive, others will survive by ensuring their public mission to educate the masses, others will die or be forced to merge because they have no meaningful points of differentiation.
As many schools offer similar programmes, what should students consider when deciding which school to go to?
Dominique: I agree with you that too many schools offer very similar programmes. Dig in to find out their key differentiation, push them to answer these questions: “What makes you different? Why should I choose your school?”
First, congratulations to Michael and Dominique for topping their respective ranking. Does the top spot add additional pressure on your schools? How do you meet the expectations of your students? To Michael, how does it feel to be ranked first for the 10th year in a row and what is the key to Duke’s success?
Dominique: Yes, for sure, once you are at the top, you can only go down! We need to remain humble, non-complacent and relentlessly continue to innovate! It’s actually good pressure!! Congratulations Michael... but we hope to beat you next year!
Michael: In short, I’m both exhilarated and relieved. Reflecting on this honor, a lot has changed in ten years. We are much bigger, more global, with many more employees in multiple offices and we have many more terrific clients with new and interesting business challenges and talent needs.
While much has changed, a couple of things have endured. One core principle that has shaped who we are from the beginning and was embodied in our founders and has been embedded in our culture, is client focus and caring for our clients. I believe it is even more important today than ten years ago. We owe a great deal to our terrific clients, who push us in new directions and continue to raise the bar. They bring us interesting challenges and alongside of them, we have grown and become more global.
On a more personal note, it is an incredibly rare honor to be number one in the world at anything you do in life. But for all of us here at Duke CE, to have worked together and found a way do this for ten years in a row is something for which we are really proud and thankful. It is a special week. And one lovely and unique thing about our culture is on Tuesday after the announcement, I had many people asking and pressing me to answer this question – “So how do we intend to break the rules again and stay ahead for the next decade?”