Executive development takes a high-profile in most organizations, and is given significant attention at board level. Succession planning, mentoring, role rotation and training are all part of this mix.
One aspect that receives particular focus is external executive education. This is due to both the out-of-pocket costs and the issue of “time away from the business”. This area is typically about developing the strategic and softer skills rather than technical skills such as accounting for example. External executive education is a major industry in its own right with many hundreds of universities and other organizations competing for the corporate dollar in this area.
Take the Harvard Business School for example. In 2011, it provided open enrollment courses for some 6,700 participants. In addition, it provided 62 custom programmes for some 3,200 participants, and these custom programmes were delivered to 31 separate companies. Whilst the specific numbers will differ, there is a similar pattern across hundreds of business schools across the globe. This is lucrative business for the providers of these programmes. In graduate schools of business, it is generally acknowledged that the executive programmes provide significant profitability compared to the flagship MBA classes.
But how effective are external executive education programmes? The answer is often “it depends.” Indeed, the same can be said for internally developed and delivered education programmes.
On one level, we can look at overall corporate results. Assuming we accept the principle that executive education is ultimately about helping to achieve better corporate outcomes, we can use corporate results to some extent as a proxy of its effectiveness.
Well, maybe. There are many factors that impact corporate results, and we need to be careful to avoid jumping to conclusions on cause and effect. But having said that, CNN Money shows some interesting statistics regarding the performance of Fortune 500 organizations. In the period 2000 – 2010, 50 of the Fortune 500 showed total return to shareholders of between 17% and 46% annually. The top 50 in EPS (earnings per share) growth also demonstrated similar performance. These numbers are strong by any basis of comparison, and don’t forget this includes the period of the GFC in 2008/2009.
Whilst we can argue that executive education may have played a part in helping to deliver these results, that is probably as far as we can go. Drawing any stronger connection would be way too tenuous at such a macro level.
But individual corporations also face a similar challenge. How do they link and track the delivery of executive education with actual outcomes and results? This is partially overcome by participants agreeing some form of objectives upfront that can be measured both at the end of the programme and with some ongoing tracking. The key is to ensure the right issues are identified that will derive benefit from the executive education, and that the appropriate measures are agreed to drive the right outcomes. This is an important part of the value proposition for executive education. There needs to be a win-win for the organization and the individual participants.
This linkage is highlighted in an article for Bloomberg Business Week where Stephen Burnett the associate dean of executive education and professor of strategic management at the Kellogg School of Management said, “…….there should be a direct and measurable connection between executive education and business results”.
But what of the future, and how can executive education maximize real value? Four areas of emphasis are needed to deliver that value:
1. Focus executive education on the big strategic shifts
Some industries will face major strategic shifts that create the need for urgent change – for example, technology and the changes in the media industry. Other changes are at a broader level. For example, one of my previous blogs discussed business models and the future of work. These aspects are fundamental to the way organizations will function in the future. It is essential that the focus of executive education is shaped around these strategic shifts.
2. Rethink speed and flexibility in executive education
The speed of change is a much quoted challenge for executives – in their organizations, in their markets and in the global economy. Social media is a case in point, and this phenomenon is rapidly changing the consumer landscape and how buying decisions are made. Executive education needs to be very nimble to be on top of such issues with timely and relevant content.
3. Exploit the online component
The online environment provides a great opportunity to develop foundational skills in some areas so that face-to-face education can be used to build more significant capabilities. For example, online learning could be used to highlight the general fundamentals of say collaboration together with case examples to illustrate. But the specific application in the work environment and what needs to be done differently is far more suited to the face-to-face experience.
4. Lets get smarter about measures
It is very satisfying to hear someone say that the education course they just attended at some cost to the business was very useful or that it was excellent. It feels like a real value for money moment. But how will it impact the business and the individual? What will be different, why is that important and how will it be sustained? Measures need to be built into the performance management system for both the business and the individual participants, and must be assessed regularly to ensure outcomes are delivered.
Robert Louis Stevenson talked about travel being more about the journey rather than the destination. Executive education is also about a leadership journey, but it is one that needs to closely tied to clear milestones along that journey.