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Executive education is now seen as the biggest opportunity for many business schools. Yet technological change and the rising number of providers offering alternatives to traditional institutions have made it one of the most challenging and competitive sectors for providers in which to achieve growth.
The expansion in the market for short programmes teaching practical skills in bite-sized courses is driven by the need for employees to retrain to be productive in a digital age. The international university consortium for executive education (Unicon), which represents more than 100 business schools offering this kind of teaching, suggests the total market is worth about $2bn and has grown by 20 per cent over the past five years.
A survey by the Chartered Association of Business Schools of UK-based deans and senior managers in late 2018 found that executive education programmes were seen as second only to new online degree courses as a source of revenue growth over the next decade.
Demand for executive education is also being helped by the switch in postgraduate education away from two-year MBA courses, covering a broad range of business subjects, to one-year business masters degrees that specialise in management or finance.
“Speciality masters degree graduates need to top up their skills in management and leadership as they move up in their organisations,” says Tom Robinson, president of accreditation body the Association to Advance Collegiate Schools of Business. Many are likely to turn to executive education rather than another full-time masters, he adds. This gives these students the ability to reskill in specific emerging concepts, such as fintech and data analytics.
The problem for the business school executive education teams is remaining fresh in an age when courses can be taught through apps on a smartphone or immersive role-playing exercises, rather than through classroom-based seminars.
“The potential market for business schools is vast, but the market for learning and development is evolving rapidly,” says Andrew Crisp, founder of education research company CarringtonCrisp. “No longer is it dominated by classroom learning or executive retreats, but instead digital is to the fore with everything from microcredentials to digital badges to stackable certificates.”
Burgundy School of Business in France currently runs only business degree programmes. But its vision for the future is a network of executive education courses focused exclusively on the wine industry, delivered from hubs in the main wine distribution locations around the world, satisfying demand for the specialist skills needed to succeed in a market growing by about 6 per cent a year, according to Stéphan Bourcieu, BSB’s dean. “We are a niche market, but it is global and expanding fast,” he says.
How business schools respond will have a big impact on their future growth. The Wharton School in Pennsylvania is one of a handful of top schools worldwide, alongside Harvard Business School, Insead in France and Switzerland’s IMD, that generate more than $100m of revenue a year from executive education.
Mike Malefakis is associate vice-dean at Wharton Executive Education, and has been involved in the executive education market since 1992. He says the sector has changed “radically” in the past five years, in particular due to the introduction of online teaching models. However, he believes that business schools with strong brands such as Wharton have an opportunity to rise above the new competition in the same way that trusted media organisations have succeeded in an age of fake news.
“The ‘netflixisation’ of executive education is going to happen,” he says, referring to the way the streaming-media company has challenged the dominance of traditional broadcasters. “But there is a difference between the deep learning we can provide and superficial learning.”
Another way for business schools to fend off the competition from other executive education providers is to form partnerships with bodies that need to train senior officials. One example is the partnership established by Georgetown University’s McDonough School of Business in Washington DC and the US Financial Industry Regulatory Authority to run the Certified Regulatory and Compliance Professional programme.
This is the first year Georgetown’s McDonough School has been involved, but the programme has been around for nearly 20 years and has an active network of 1,200 alumni. As it is the only such programme for compliance professionals, it attracts people from a range of roles, such as investment advisers, compliance professionals and industry regulators. Although it is focused on US market regulations at the state and federal level, it is also relevant for overseas regulators dealing with that jurisdiction, which in turn adds to the quality of the discussion and depth of knowledge shared in each session, according to the course organisers.
The leading schools in the FT’s executive education rankings are hiring separate teams of teaching staff, called professors of practice. Rather than academic credentials, these individuals have practical experience of management. This makes them more valuable to executive education course participants, who want knowledge they can use the next day in the office, says David Asch, quality services director at the European Foundation for Management Development, the business school accreditation body. “The academic doesn’t cut it for these courses,” he says. “The key is to make sure you continue to be relevant to the organisations you serve.”
There is now a constant need for life-long learning at all levels in organisations, which increases the market for everyone, says Mireia Rius, associate dean for executive education at Spain’s Iese Business School. “Companies are changing thanks to technological disruption and longer working lives, which means that for the first time we can have four or five generations [Generation X, Generation Y etc] in the same organisation,” she says. “This all requires a new type of leadership and means today’s executives and firms need to develop different capabilities and skills.”
The challenge for executive education providers is to ensure they are still meeting the needs of clients whose skills needs as well as demand for retraining are changing.
“We are constantly researching, experimenting, testing, and working in partnership with our clients to see what works best,” says Rius, questioning the model of topping up knowledge from a business degree later with short courses.
“The old idea of episodic learning — ‘I’ll do an MBA, then at a later date I’ll do an executive programme’ — is not realistic, nor optimal for many,” she says. “Instead, there is more need for constant, life-long learning for individuals and at all levels in an organisation.”
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