Standard 14 of the proposed new criteria for AASCB Accreditation deals with the provision of Executive Education. Given the importance of this activity in many business schools today, it is useful to look at some of the best practices in the industry.
At the AACSB Associate Deans Conference, Brent Smith, Associate Dean, Executive Education and Associate Professor, Management and Psychology, Jesse H. Jones Graduate School of Business, Rice University, set out some of the issues at his own university.
According to Mr. Smith the market is increasingly crowded and it is therefore vital that business schools fully understand their competitive positioning as well as the role of executive education as vehicle to advance the overall strategy of the school.
What is the role of executive education in a business school?
According to Brent Smith there are four major criteria for establishing an executive education center in a business school. In order of importance they are:
- To engage the corporate community and external relations.
- To facilitate research in the university.
- To help attract top faculty.
- An opportunity to generate funds for the business school.
Running executive education is a very expensive process and the revenue model should not be the only objective. However, this is often mistakingly seen as its primary purpose when setting up an executive education center. In fact It is more relevant to calculate the knock on effects of this activity through increased employment and research projects which may be generated.
One of the other challenges is constantly ensuring that the material you are delivering is relevant to companies and employees.
How should you understand the competitive positioning of your executive education center?
Executive education needs to be thought of a service rather than a product. It is sometimes difficult to change this mentality in business schools. There is a need to develop partnerships with other universities but this is so rarely done. Brent Smith can only cite two examples of this in 12 years.
Most executive education centers will be squeezed from both ends of the market. For example, Rice University finds itself competing with school such as Stanford, Wharton, INSEAD and London Business School. However, there are also more independent providers in the market such as DDI, Korn/Ferry International and PDI Ninth House. It is important to understand the dynamics of this and to position the executive center correctly to establish its unique selling proposition.
- Consultancies often have a pricing advantage, an ability to integrate development programs with a suite of broader offerings, and geographic scope
- The major schools have brand recognition, a broad alumni base, well-positioned programs, and extensive resources (and geographic scope)
- Independents (Duke-CE, CCL) have incredible flexibility (of faculty, geography, and delivery)
Who is the key customer in executive education?
In general this is the head person in HR department of a company. You must create opportunities to meet these people rather than trying the cold call method. You can use the university to get the contacts. It is the clients that often become the best advocates of the executive education center and this will give considerable help to the executive education center.
What are the most important lessons to be understood?
- You need to understand your market and market-opportunities
- You must determine how you want to position yourself in this market. For example:
– Open vs. Custom
- 80% of revenues at Rice University are generated through custom programs. They do have programs on a general management level but it is difficult to recruit on an open model.
A typical model for establishing a new program goes as follows. The Executive Education centre will be introduced to a company. They will do a needs analysis and then try to design a custom program. Once the program design has been established the search for the right faculty to deliver the program will begin. The average duration of this process 3-7 months.
Which faculty teach on executive programs?
Rice University uses 6-7 faculty members to do 90% of the teaching in executive education. (This is consistent with surveys done on business schools that say 7-10% of faculty are well suited to teaching on executive education.) This takes them from other roles within the school and needs to be agreed to by the Dean. This also brings other benefits to the school and is an ongoing process.
In the past they had run many open programs because there was a faculty that wanted to teach it. This was not a very profitable model. Most of the professors used on executive education programs are tenured. However, their promise to the client is that if they don’t have the necessary faculty, they will go and get in from outside. Executive Education is fully compensated at Rice University.
What is the future for executive education?
- Executive Education providers will need to develop themselves as an integrated “Talent Development Providers” or “Advisors”. This is a major requirement today to get new business from companies.
- Providers will need to develop more partnerships with consultants or to increase consulting. We will have no choice in this in the future.
- Online and blended learning will increase. There will be fewer traditional classroom based programs.
- There may be a decline in open-enrollment opportunities for schools that are in the middle space. They are likely to be squeezed out.
- There will be an increased interest on the return on investment and the value on investment proposition. This has been tracked for the past 3 years. The university engages in action learning commitments from customers with some KPIs that can be tracked. They can then go back to the CFO at a later date to prove the benefit. The clients are encouraged to track the data through a utility analysis framework.
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“Dr. Smith’s research interests focus broadly on personality issues in work organizations including response dynamics in personality measurement; the personality correlates of effective work performance and the relationship between personality and organizational climate/culture.”
“As the dean of the Sellinger School at Loyola University Maryland since 2008, Leggio has implemented a number of new programs, including Loyola’s first its first AACSB-accredited accelerated master of business administration program; the Emerging Leaders MBA;” … and many others.
“Blog of Professor Dr. Peter Lorange , one of the world’s foremost business school academics.”
Higher Education Management: “Unlike disruptive innovations, the OESP model does not seek to displace the traditional model of higher education. It’s not a direct challenge, but an extension of the existing model through the addition of services, skills and capital that are otherwise unavailable to the client university.”
Higher Education Management: “Digital higher education is now a strategic issue for colleges and universities. Online enrolment continues to experience double-digit growth. Investors are once again lining up to fund new companies in educational technology and media.”
Higher Education Management: “I think universities can move in new directions; they can identify new opportunities and shift resources accordingly. But they don’t have much practice. For last several decades, universities have had the luxury of not needing to make especially tough decisions.”
Higher Education Management: “I’ve known Alfred Essa for a couple of years. From the start, Al struck me as one of those people that is truly focussed on improving higher education. After a career at various organizations in the US, including MIT and Minnesota State Colleges and Universities, Essa now serves as the Director of Innovation and Analytics Strategy at Desire2Learn.”
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