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July 1, 2005

What Happens When You Need to Know Now?

With developing technologies and the global convergence of new ideas, executive education can be essential.

On May 1, 2004, Geoff Plummer took over as CEO of Australia's largest steel company, but it wasn't until he returned from Harvard's 10-week executive education program last year that he learned something crucial about his role in the company: Sometimes his employees are better off without him.

As the soon-to-be chief of OneSteel, a company with 7,000 employees and revenues of A$3 billion, Plummer attended Harvard's Advanced Management Program to gain new perspectives. “The point of going out of the country was to think about how other people do it, how other industries and other countries do it,” Plummer says. The unexpected lesson was “that my people had done a fantastic job without me. That's a very valuable lesson.”

The other valuable lessons came from the program itself. Plummer came away with what he calls a toolkit of things he could apply in his new role as CEO, from a more solid understanding of business fundamentals, such as marketing and finance, to how these all fit together in a cohesive corporate strategy. “I will have been out of the program 12 months at the end of May, and I'm still finding I'm going back and looking at the cases and using them as a reference for some of the thinking I'm doing,” he says.

Executive education has been around since the end of WWII, when the masses of people who flooded the workplace needed more education quickly to cover some of the basics required in the business environment. Today, it is even more important with the increasingly dynamic marketplace, technology and global convergence of new ideas. “The half life of knowledge has reduced dramatically over time,” explains Ken Bardach, the associate dean and Charles and Joanne Knight Distinguished director of executive programs at Washington University's Olin School of Business. “Now what's happening is as people get more and more degrees, the knowledge base is accelerating so rapidly, people need to go back to school to learn.”

In essence, executive education provides a solution to the question MBA programs cannot answer: What happens when you need to know now?

WHAT IS EXECUTIVE EDUCATION?

In the broadest sense, executive education is anything an executive does to enhance his or her education as a professional, which can include everything from one-day skills courses to executive MBA programs. Generally, however, executive programs do not offer degrees but serve people in upper-middle management and above who either need standardized programs on specific topics—open enrollment—or tailored programs on challenges unique to a company or an industry—customized courses. “At Olin, these people typically are working in a high position, average age 40, mid-career, who say, ‘I need to go back to school for new skills and insights,'” Bardach says.

“Custom and open enrollment are really different,” explains Charlie Breckling, the marketing director for executive education at Harvard Business School, which offers both types of programs. “Custom is a lot about building organization, lending organizational change, building teams, focusing on the industry, product line and processes of those specific companies. It adds a lot of value as it relates to the company and the individuals in that company.”

TOP NORTH AMERICAN EXECUTIVE EDUCATION PROGRAMS
 OPEN-ENROLLMENT:
  – Duke University: Fuqua
  – Northwestern University: Kellogg
  – University of Virginia: Darden
  – Columbia Business School
  – Queen's School of Business
  – University of Western Ontario: Ivey
  – York University: Schulich
  – University of Toronto: Rotman
 CUSTOM:
  – Duke Corporate Education
  – Columbia Business School
  – Stanford University
  – Thunderbird: Garvin
  – University of Western Ontario: Ivey
Source: Financial Times, 2004
 

Open-enrollment programs, such as the Harvard AMP program that OneSteel's Plummer attended, focus more on giving students exposure to a broad variety of management topics that apply not only to other companies, but to other industries. “They provide a completely different perspective from custom programs,” Breckling adds. “Generally, the focus is to build individual management, analytical and decision-making skills, to give them experience outside the company, to learn from other individuals, other cultures, as well as other industries, seeing how different people handle what often boils down to very similar business issues for all companies.”

Within the two types of executive education, the program options are endless due to a multitude of market demands. Each school, like any company in a particular business sector, has a unique proposition. At Olin, that's education on the count of one: one-day, one-topic open-enrollment courses. At Harvard, it's a focus on case studies: the discussion and practice of real-life scenarios. The University of Chicago, on the other hand, spends more time on the fundamentals than on case studies in its programs. And Duke Corporate Education specializes in custom programs, offering a learning network of 1,600 people around the world, including 85 full-time employees in Durham, North Carolina, and in London.

Programs range in length from Olin's one-day open-enrollment workshops to customized programs Duke has created for companies such as Caterpillar and SaudiAramco that may be used for years on end. Costs vary, too. A short open-enrollment program might be less than $1,000, whereas the design alone for a custom program could run anywhere from $150,000 to $750,000, with an additional $1,000 to $1,500 per person, per day for the program delivery.

WHAT'S THE BEST PROGRAM FOR YOUR COMPANY?

Given all of the options, the best place to start when looking for a program is with your own needs. What do you, individually, want to get out of the program? What does your company want to get out of it?

When exploring options for his company, the family owned aluminum and magnesium dye-casting and assembly company Spartan Light Metal Products Inc. Paul Walle, human resources vice president, looked at content first. Olin's course on organizational design appealed to him. “We were doing something at the company that was related,” Walle says. “The fellow I went with is the engineering vice president, and he's in the process of reorganizing his function. He'd mostly completed it, but we thought we should go and see if we'd overlooked something.”

OneSteel's Plummer says he went to Harvard's AMP program because the CEO was retiring in 12 months, and the board said if he wanted to be considered for the position, he needed to take responsibility for personal development. “Three years ago, it wouldn't have been a good idea for me to do it,” he says. “Too often, people do these things without a clear purpose. The nature of this program is a significant investment in terms of money and time. I had a clear set of development needs that I was going to try to work on, and I made good progress on a number of those. I also discovered a lot more development needs than I thought I had.”

Robert Fulmer, who works as an academic director helping design and deliver the content for Duke Corporate Education's corporate executive custom programs, recommends three criteria when selecting the right executive education program for your company: “People really like to look at what the rankings are,” he says. “Anybody who's doing a search wants to know that people have a reputation in the marketplace. Check references with whom you've worked and past clients. Third is how you hear and how you feel in talking to the individuals. It's almost like a chemistry test: If you feel good about working with people, in the way they respond to your questions, in the way they respond to your proposal.”

Interview representatives from potential schools to find out if their program matches your needs. Is it more important to go to a top school or to find someplace nearby? Look at the client list of the schools: Are there any from your industry or from similar-sized companies you could interview about their experience with the program? Make sure the program and school match the needs of the individual and the company.

If this is for the company, consider customized programs, which could be more cost-effective in the long run if it's a program you have designed and then continue to run every year. If it's for an individual, what are the specific skills and development areas? Do you need to leave with an action plan developed or a broader understanding of a particular subject? Look at content: Does this fit what you're looking for? Does it go into the depth you need? Also consider the environment: The other participants in the program, the instructor's approach and teaching methods, and all of those other variables such as length, cost and distance to travel.

GETTING THE MOST OUT OF YOUR PROGRAM

Gus Franklin, who retired as president of the auto-parts manufacturer Dana Corporation's regional organization last fall, was responsible for Dana's education quality and management. In addition to sending employees such as Franklin to executive education programs, Dana has run its own in-house center, Dana University, for the past 30 years. Franklin says there are two key ways to ensure the success of any education program: First, get commitment from the top level of the organization. “It's one thing for the senior manager to say you have 40 hours of education, and another thing to say you're going to get 40 hours of education, and here's what we're going to do with it,” he says.

Next, make sure the education extends to teams of people. “Executive education is better through the group than through the individual,” Franklin adds. “How you do it together is where the impact is. That's where you get the real bonus in executive education. You typically have the skills in place, but it's how you work together as a team when you're facing problems or when you're facing an opportunity to get more business or improve your product or go after some new technology to apply it to your product. That's lost if you're in an executive silo. It's an inability to connect within a group and between groups that really holds back corporations in their effectiveness.”

The biggest concern among clients of executive education today is making sure that what is learned can be applied when they return. Some schools build this into the process by asking students to list their objectives before attending and then analyzing them again after the program. The University of Chicago has developed a Web-based tool called Transforming Knowledge into Action, which asks executives to state their learning objectives prior to class so that faculty can prepare for the class and understand the group as a whole. “In the class, we try to get them to transfer those from learning objectives to action items,” says Michael Malefakis, University of Chicago's director of executive education. “They go back online and post those action-learning items. When they return two weeks after the program, we send a reminder e-mail: This is what you said you're going to do—how are you doing? Keep track of your progress. It's one way we're trying to help companies and executives drive results.”

Duke Corporate Education's Fulmer recommends that companies also take their own initiative. “If you're clear about what you want people to get out of the program, then it's fairly easy to apply—in business challenge or action learning, they'll be involved in applying it,” he says. “The second thing you can do is measurements.” Six months after the program, for instance, interview the students about how they applied their knowledge. Create focus groups and ask people about the program and how they would do it differently. Encourage them to use alumni groups to post ideas they have found to be successful.

Sometimes it's hard to measure the return in financial terms, but the other rewards are great. “If you hear people say, ‘I'm focusing more on the strategic issues of the company now instead of spending so much time on tactical issues,' and that's exactly what you wanted them to get out of the program, clearly they're doing a better job and changing their focus,” Fulmer says.