Executive education has long been a lucrative market for business schools, but they now face competition from tech start-ups, which have seen an opportunity for market disruption.
New York-based Grovo, for example, offers what it calls microlearning courses — lessons with a single learning objective delivered in bite-sized chunks on users’ smartphones. Grovo says research among its corporate customers — which include US oil group Chevron, advertising agency Saatchi & Saatchi and Capital One bank — found that 97 per cent of the assignments started were completed by users and that the average user finished 50 per cent more course material than they had been assigned by their employer.
Disruption is the mantra among companies such as Grovo and it can mean taking revenue from existing providers, including business schools. Docebo, another US-based edtech venture focused on executive education, calculated that the market for online courses was worth $46.7bn last year, up from $35.6bn in 2011.
Some business schools, however, are choosing to see these companies not so much as a threat but as an opportunity. They are forming partnerships with platforms that can deliver their courses in novel ways that appeal to corporate clients without eating into the premium teaching provided on campus.
Katharina Lange, executive director of Singapore Management University’s executive development, says SMU’s internal IT department had originally developed a web-based teaching tool, but in the end her team sought a partnership with an outside business specialising in learning online.
SMU chose London-based start-up SmartUp, an app-based service focused on delivering succinct lessons to a smartphone, a device that people now use more often than their computer, Lange notes. “Our technology was good but SmartUp’s was better,” she says.
SmartUp is also providing SMU with data on students’ use of the system, helping the university to understand how people are learning and what subjects they most like to study. “This is what our HR department is asking for,” Lange says.
The client relationship is central to any successful executive education programme run by a business school and Lange notes that SMU retains control of this. She stresses that good course design as well as the way it is delivered is a result of listening to clients, with companies wanting to receive learning in ways that suit their staff. “Remember, you have two ears and one mouth,” she says. “Make sure you actively listen to what your client needs before you start offering solutions.”
Online programmes offered by non-business school providers are a tempting prospect for companies because they are cheaper, but they do little to support long-term career development or to foster a commitment to life-long learning, according to Matthew Gibb, director of the executive MBA programme at HEC Paris.
“Participants need the opportunity to fully step away from their day-to-day roles in order to expand their thinking,” says Gibb, who is also director of new international programming and academic partnerships. “Engaging with faculty, networking with classmates and alumni and meeting potential employers can, of course be done online, but not to the same extent.”
Schools are experimenting with blending online and campus learning. HEC Paris offers courses that mix both. A typical model is to make course introduction and study materials available for download before students come for lessons on campus, Gibb notes.
The problem for many schools is that they have failed to invest in the necessary technology to provide such teaching, according to Gibb. “All industries are facing the pressure of digital transformation and executive education providers must realise they are no exception,” he says, adding that it is not just Generation Z, the one following the millennials, that is demanding access to digital and flexible learning options, but also older employees who need to acquire new skills quickly.
“Such individuals would be better served by an online programme from a business school, but business schools must adapt their offering to remain relevant,” Gibb says.
Some edtech entrepreneurs agree. Frank Meehan, co-founder and chief executive of teaching app SmartUp, claims that business schools can succeed even as companies like his grow. “Top executives still get to fly off for executive training courses but everyone else is being encouraged to go digital,” he says.
The mistake business schools made in the past was to try to compete for the lower-margin business that is best served by edtech platforms rather than focus on the top end of the market, which campus-based learning provides, according to Donna Sharp, interim associate dean for Columbia Business School’s executive education operation in New York.
Columbia saw revenues decline in the wake of the 2008 financial crisis as companies cut internal training budgets, but has since recovered in large part by attracting those looking for a high-quality learning experience, Sharp adds. Columbia has a partnership with ExecOnline, an online platform for executive education courses, which enables the business school to reach corporate clients worldwide.
“There are limitations to what you can do in an online classroom,” she says. “There is still incredible value for people to come to the campus and immerse themselves with faculty, of whom they can ask questions. It is a premium experience.”
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