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It was in 1999 that the Financial Times published its first ranking of business schools which provided non-degree executive education programmes. Of the 30 schools that participated in that ranking, 28 still compete among the 73 schools that are ranked today.
Over the past eight years the market for these programmes has been volatile and has changed dramatically, most notably following the terrorist attacks in New York in September 2001. For many schools it took several years for business to climb back to the levels of 2000.
But overall the pattern is one of strong growth. In 2000, when the FT first introduced rankings that differentiated between open enrolment programmes (which enrol applicants from many different companies) and customised programmes (designed for one company), only 30 schools were ranked in each category. But the increasing demand for customised programmes soon took hold.
By 2006 the number had doubled – 60 business schools which provided customised programmes were eligible to participate. In open enrolment the figure was 45. This year there has been a resurgence in open enrolment programmes: 50 providers have been ranked.
While in the past corporations have often seen customised programmes as being better value for money than open enrolment ones, this can be a fallacy, says Eric Weber, associate dean at Iese Business School in Barcelona. An open enrolment programme costs around $2,000 per participant per day, while customised programmes cost upwards of $30,000 a day. So, with $100,000 to spend, a human resource executive could get a three-day or four-day customised programme for 50 executives or a one-week open enrolment programme for ten individuals – making the customised programme seem better value.
But, argues Prof Weber, the short-term impact of the customised programme will not compare to the long-term value the company will get from sending a handful of high potential managers or board members on an appropriate open enrolment programme.
At Iese the biggest growth in open enrolment business has been internationally, says Prof Weber. “We’ve had more requests than we can handle to do open enrolment outside Spain,” he says.
At London Business School, the global mix of students on its London-based programmes has been a magnet to international participants, says Nirmalya Kumar, faculty director for executive education. These days, he says, it is not just the brand name of the school which sells programmes, but who else is in the classroom.
Not surprisingly, then, the growth in executive programmes in areas outside the usual axis of North America and Europe has been a conspicuous feature of this year’s rankings. Schools in South America, Australia, South Africa and China were ranked this year. To participate they have had to earn $2m over the past year in whichever sector (open or custom) they participate.
The growth in open enrolment programmes is not at the expense of customised programmes, though. Of the 678 companies that participated in this year’s survey of corporate consumers, nearly half said they would do more work with their business school next year compared to this. As well as the 296 (44 per cent) who planned to do more business, 351 (52 per cent) said they would do the same number of programmes next year. Just 25 (4 per cent) said they would use their business school less.
Sixty-three per cent of all respondents said they expected their companies to spend more on customised executive education in the coming year, with a further 33 per cent saying they expected the amount spent to remain the same.
Though the hype that surrounded the concept of the corporate university a decade ago has now subsided, a surprisingly large number of organisations still claim to have an internal learning centre of this kind – some 40 per cent of the total number of respondents. And 39 per cent of the total response base thought the use of corporate universities in large organisations would rise.
Corporate universities have not been forgotten, says Bill Shedden, director of customised executive development at Cranfield School of Management, but business school fears that they would cherry-pick top faculty have subsided. The two – business schools and corporate universities – now work hand-in-hand, he says.
One other big change is the use of distance learning technology in delivering customised executive education. These days 66 per cent of the corporations surveyed said distance learning was incorporated in their programmes, though only 16 per cent of the total use online programmes instead of residential courses.
Online learning has proven particularly attractive as a means of delivering materials prior to the beginning of the “live” programme – reading materials, case studies and so on. But it has also proven popular for delivering follow-up support following the residential programme. While follow-up has traditionally been included in the customised education package, it is increasingly being integrated into the open enrolment package, too.
At IMD in Switzerland, for example, open enrolment participants are sent an e-mail two weeks after they finish the programme to retain the contact between school and student. Two months after they complete the programme they are e-mailed again and encouraged to come back to the school with questions. Further contact is made at six months.
“The more I think you can take the learning process and get these managers to be teachers, the more effective the learning will be,” says Tom Malnight, strategy professor at IMD.
It is a target all business schools worth their salt are hoping to achieve.