Schools of thought on executive education

by 17 Apr 2007

The demand for executive education courses in Australia has boomed over the last five years. Teresa Russell examines this trend and finds out why HR and other business professionals are taking up these short courses in record numbers

Executive education courses can run from one to 14 days, are targeted at middle and upper management, are delivered by business schools, and usually have no assessment for participants. Subjects covered vary considerably from provider to provider, but they often attempt to teach soft skills to technically competent people who have been promoted into management roles.

While all business schools offer “open” courses, available to the public, the big growth over recent times has been in provision of in-house custom programs for larger corporate clients. The leaders of four of Australia’s most highly regarded business schools spoke with Human Resources about the state of the booming executive education sector.

Graeme Gherashe, director of executive programs at the Australian Graduate School of Management (AGSM); Craig Hawke, director for corporate and executive education at the Macquarie Graduate School of Management (MGSM); Dr Karen Morley, associate dean of executive education at Melbourne Business School’s Mt Eliza Centre for Executive Education (Mt Eliza Centre) and Neil Edwards, chief executive of Chifley Business School (Chifley) are well-placed to discuss the issues in executive education.

Whats out there?

You are unlikely to be able to think of a short course needed by a member of your middle to upper management that is not provided at least once a year by an Australian business school. Every facet of business management training and leadership development seems to be available, along with some very specific courses relating to particular professions, industries or geographical markets. Most of the courses are two to five days long with face-to-face learning.

Some schools offer both day attendance and residential courses, whereas the Mt Eliza Centre offers only residential courses. “There is often a reaction from HR managers and line managers that people are too busy [to attend longer residential programs]. A breakfast meeting is no substitute for an intensive development program that seeks to change behaviour,” says Morley, defending Mt Eliza Centre’s “residential only” position. “The market continues to buy our courses,” she adds.

Fees for executive development courses range from $1,000 to $17,000, depending on the length of the open course and whether or not there is a residential component. All the business schools publish course prices on their websites.

The four business schools that spoke to Human Resources also offer custom courses, as do many of their competitors. In fact, it is the largest part of their executive education revenue stream. These are generally courses that are taken up by large corporates that are able to release 20–30 managers to attend a customised in-house program, run by the business school. One-on-one management coaching by members of the business school may be added to the offering, moving in on the market usually populated by smaller consultancies.

MGSM also offers a corporate award program –like an in-company university. Participants receive a graduate diploma in management after they complete six subjects with 40 contact hours per subject.

Target market

The types of people who attend both the open courses and the in-company custom courses have one thing in common: their employers want them up-skilled, retained and developed. “They are typically the high potentials – highly talented and motivated people. Many of them have degree qualifications. The ones who benefit most are those who are prepared to challenge themselves, challenge the way they do things and have a mindset for change,” says Gherashe.

Morley says that the Mt Eliza Centre uses nomination forms and phone interviews to ensure that the participants are all coming into each program with about the same level of management responsibility.

A business school like Chifley – which is owned by the Association of Professional Engineers, Scientists & Managers, Australia (APESMA) – attracts participants from companies that employ large groups of technical professionals, such as those operating in the mining, transport, engineering, logistics and energy industries. Edwards says that Chifley’s participants typically once had more technical roles, but now are in positions where they have to understand the business.

Although Australians comprise the majority of participants in these executive education courses, the schools attract many New Zealanders, and a surprising number of participants from Asia and beyond. They also run custom courses for organisations around the world, usually gaining entry by running courses for the Australian arm of a multinational company.

International providers of executive education, such as Harvard BusinessSchool, also seek participants from within Australian organisations for their short courses in the USA.

Sector growth

Edwards says that Chifley is planning on annual double-digit growth in its executive education sector for the next five years. “The demand has been driven by corporations wanting to provide solid management skills to middle and upper management and for whole teams,” he says.

Hawke has seen “significant growth,” especially in MGSM’s customised programs. “The health of the sector is related to the health of the economy. As the war for talent gains traction, people and capability development are being talked about at the senior level. Companies are now realising that they need capability to execute strategy,” says Hawke. As a result, organisations have been demanding programs that deliver management skills and leadership development in a relatively short time period.

Trends

Morley says that everybody is aware of the trend towards customised programs tailored to organisational needs. She says there has been a lot of recent interest from professional service organisations in the legal, accounting and finance areas – especially with a focus on leadership.

“We’ve seen a growing trend for organisations wanting follow-up after a block of education is completed. Companies also want programs to build more of the learning into action. There is also going to be a convergence of education and consulting as time goes on,” predicts MGSM’s Hawke.

Edwards says that Chifley’s clients have demonstrated strong interest in them also assessing the capabilities of participants, and believes that demand for this will continue into the future. “They are not interested in putting high-flyers through MBAs. Our clients need to get large groups skilled immediately. They are likely to let MBA students carry the load themselves,” he believes.

Gherashe says that the custom market is growing, with especially strong demand around strategy, leadership, change management, business acumen and sustainability (triple bottom line). “In the future, there is going to be a greater use of technology for delivery of the learning. Many of our clients are also looking to us to help them measure the impact [in their organisations] of what we have done for them,”he says. When asked to speculate about the direction course prices will go in the future, Gherashe says that although other providers have chosen to increase their prices, he sees a far greater demand among clients for good learning outcomes, rather than concern with course costs.

Custom programs

As Australia’s largest airline, Qantas employs around 38,000 people. Most are based in Australia. The company’s current management development strategy –part of its talent and succession planning strategy – had its genesis 18 months ago when the organisational focus shifted to its leadership pipeline.

“We are clear about the development we are going to need for people who will be the future leaders of Qantas,” explains Karen Lonergan, group general manager for organisational effectiveness and management development. The main focus of her job is Qantas’ senior and emerging leaders.

Lonergan explains that the organisation provides customised executive education courses as a part of a broader leadership development program. Qantas has partnered with two different business schools: MGSM runs its in-house senior executive program, while AGSM runs a customised program for its emerging leaders.

Based on both past performance and future potential, line managers nominate participants for both programs. MGSM’s senior executive program comprises three three-day modules over six months, with 20 participants per year. The emerging leaders program is held at AGSM’s accelerated learning laboratory in two three-day modules over a 12-month period.

“Executive education courses are only a part of a broader program for these managers. It is not just an event that happens in a classroom a few times a year. It is connected to their work,” says Lonergan.

The emerging leaders also complete assessments through the company’s capability framework, engage in additional skills development, receive mentoring and coaching and also must complete an on-the-job project. The senior executives are also provided with management coaching and must undertake a group structured business project that is presented to senior management.

Lonergan says that Qantas took the route of using customised executive education because it is a focused intervention on a key group of people. “Many have good technical qualifications to begin with. It is better to give them a focused piece of education on our business and industry, than more general education,” she explains.

When choosing a provider for its senior executive program, Qantas received submissions from the major Australian business schools. Lonergan says they knew they needed someone who could work with them to carefully customise the content and meet their specific needs. “MGSM understood our business and has made the content of the senior executive program extremely relevant,” she says.

When looking for a provider for its emerging leaders program, Lonergan looked no further than AGSM. “We needed truly accelerated learning in this group. Qantas has a long history with AGSM and knew it was a world leader in this innovative type of learning,” she says.

Many people associate tailored programs with high costs, but Lonergan insists that value for money played a major part in the decision. Although the program costs are commercial-in-confidence, Lonergan asserts that, “You can do our year-long learning journey for around the same cost as a short course at a leading business school.”

The first cohort of each group is just winding-up now, with very positive feedback from participants and their managers. However, Lonergan says the true measure of success will come in 12 months time, when Qantas’ 360-degree leadership and management capability framework will be used to assess the extent of their increased capability.

She advises others looking at similar programs to be absolutely focused about what they are trying to achieve and to ensure that the classroom piece of the learning is integrated into the workplace. “Choose key capabilities and a key population. Don’t try to boil the ocean,” Lonergan recommends.

Executive education for HR

NSW Treasury Corporation (TCorp) is the central borrowing authority and asset management arm for the NSW state government. It employs 70 people, including Lynn Goodyer, its head of HR. Goodyer has recently attended the AGSM’s five-day residential general management program.

One of TCorp’s strategic initiatives has been to enhance leadership skills across its management team, as well as in its upcoming high potentials. Goodyer researched a number of leadership programs for both herself and others in the organisation. “Because of our size, an in-house customised program was never an option,” she says.

Goodyer selected AGSM “because of its reputation for being number one in executive programs. It also offered a variety of development programs for new managers, middle managers, senior managers and general managers. By choosing the one provider, we were assured consistency in learning across the different levels and were also able to develop staff in both technical and soft skills, depending on their needs,” says Goodyer.

The general manager program promised to provide senior leadership skills in the areas of financial accounting, marketing, culture, management style, strategy and negotiation, media training and communication. Goodyer enjoyed doing the course and says it gave her some useful tools to utilise in her day-to-day work.

“In my role as a business partner, I wanted to enhance my commercial and technical skills to help turn strategic business issues into HR initiatives. I learned that although I take for granted the impact that culture and leadership has in all my decisions, I realised that decision makers working outside HR come at similar issues from a very different point of view.”

Goodyer noted that the residential nature of the program reinforced the need to have fun in your job, and tried to instil the need for a good work-life balance. The week included fitness training, mentoring, healthy eating and general well-being guidance. “We had to make a commitment before the course that we would not let work interrupt us, so we could give 100 per cent attention to developing our leadership skills,” she says.

Goodyer is currently completing an executive MBA program through AGSM, which she does to improve her technical skills across the subject areas. She still felt great benefit from attending the five-day general manager program to intensively focus on developing her leadership skills.

“If you are an HR professional and you do a program like this, you must be prepared to step outside the HR box and learn from the experience of other business managers,” advises Goodyer.

Focusing on executive development

The Mt Eliza Centre for Executive Education recently surveyed four public sector organisations and 30 companies from the top 100 ASX list. They 2006 07 survey focused on development at senior levels, as well as more general development practices in their organisations. The survey found:

Organisations are at different stages and phases in their executive development strategies. Some organisations have little support for executive development (for a wide variety of reasons) while others have focused internal learning and development teams.

Executive development is being positioned at a strategic level within organisations, and some are using it to achieve cultural change or organisational transformation.

The war for talent and succession planning are two drivers for companies to develop their senior staff.

Measurement of the effectiveness of executive development programs is an issue. However, when the CEO or executive team deems executive development to have strategic priority, measurement is of little importance.

Leadership, strategy development and strategy execution were the focus of development both at the top and throughout organisations.

The biggest hurdle to executive development is time.