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Business ClassAuthor: Roderick Millar, Managing Editor, IEDP. Although the executive education industry is fragmented and poorly understood, there is a growing need for customized courses and bespoke training at senior management levels. Roderick Millar reports. A recent survey undertaken by IEDP.info amongst large corporations,1 which examined how and why such organizations source and use executive development courses, showed that the selection and management of executive programmes was a decentralized activity. It also showed that frequently organizations had no group-wide policy for management development, and certainly no grasp of the overall group expenditure on such activities. Each division may know its own management development expenditure but these figures are rarely drawn together centrally – and this lack of centralized influence or control is symptomatic of the approach to executive education across organizations: no clear topdown strategies typically exist, and each division is left to design its own procedures. Against this background of poor knowledge regarding the provision of such programmes, however, there continues to be an increasing interest in executive development. The industry continues to grow both in terms of the number of institutions, either business schools or commercial consultants providing programmes and the amount spent each year on these programmes. Development driversThe drivers for this demand come in two parts. Lucy Hughes, director of global talent at Novartis Pharma, notes that the "talent agenda is front and centre" of the challenges the company faces in response to its rapid growth. She says that when she joined the business in 2000 "there was a perception that the whole pharmaceutical industry lacked enough talented individuals. It was not a problem specific to Novartis but to all the leading companies in the sector." The provision of challenging and dynamic executive education programmes is certainly an element in engaging and retaining talent; although research recently commissioned by Oxford Said School of Business (UK) ("Strategic Tool or Just Nice to Have? The Role of Executive Education in the UK") has suggested that the benefits gained from these programmes are often greater for the participant as an individual than for their sponsoring companies. The second factor driving the demand for executive development is clearly the acquisition of new skills. It is important to understand that the processes and methodologies for teaching executives are significantly different to those for undergraduates or even MBAs. The two major topic areas covered by executive education providers are leadership and strategy, followed by a range of functional area skills such as finance, sales and marketing and HR/organizational development topics. Leadership and strategy topics are relatively soft topics and are typically discussed in a more applied or experiential manner than the traditional classroom setting offered to undergraduates and MBA students. There is a continued progression in teaching where the process evolves from simple factgiving through the learning of new concepts and systems to a level where the teacher in effect becomes a facilitator. With executive education programmes there is usually an understanding that the sum knowledge of the participants is greater than that of the teacher - and so the teacher’s role is as much one of drawing out the information held within the class and sharing it as in imparting new ideas themselves. Sector-specific trainingThe participant make-up of core executive development programmes at all the leading business schools in both Europe and North America have a steady stream of pharma company executives mixing with those from the telecom, media and technology (TMT), finance and manufacturing sectors. Leadership and strategy courses remain the mainstay of these organizations, and the opportunity to open oneself up to the ideas, thoughts and practices of one’s peer group from different sectors is one of the attractions of the open enrolment courses at business schools. Certain executive education providers have designed management courses focused specifically on the pharma and life sciences sectors, as the pharma sector is unusual with regard to the acquisition of particular functional skills. This provision is perhaps more advanced and readily available in the US - where many of the leading business schools offer pharma-angled programmes - but there are now a handful of European schools that are doing the same. Management Centre Europe (MCE) - the European base of the American Management Association, located in Brussels, Belgium - offers a series of life science-angled programmes. The rationale for offering a sector-specific range of programmes is that the life sciences industry faces some very specific challenges, such as lengthy and costly product development cycles, increasing competition from generic drug manufacturers, and growing demands from the public to keep healthcare costs down. Claudio Jommi, professor of Public Administration at SDA Bocconi in Milan, Italy, points out that the regulatory framework within which pharmaceutical and medical device sales are conducted makes for a unique sales and marketing environment. SDA Bocconi runs a yearlong English language healthcare Masters degree but only offers its open enrolment short courses in Italian, exemplifying the local nature of the courses with regard to regulatory frameworks. The European structure, although broadly similar, can differ from country to country, but a similarly targeted course run in the US would be based on a very different environment in terms of FDA regulations and selling structures. These executive development courses tend to be aimed at the less senior management levels as they deal with functional skills. More senior managers are as a general rule more likely to attend the non-sectoral open enrolment programmes. However, the real growth in this type of corporate education is coming from the custom programme side. Customized coursesLarge organizations are increasingly finding that there is greater value in building programmes tailored to their own specific corporate needs. Custom programmes where the curriculum and delivery methods are designed in partnership between a single corporate client and the provider are much more expensive to operate in simple financial terms and also in terms of time invested as the senior management of the client company must involve themselves intricately with the provider in establishing the issues that need to be examined and agreeing the content of the development programme. Despite this financial and time investment, custom programmes are generally recognized as delivering greater value to the sponsoring company and the relationship that builds between provider and client is usually longterm. It often grows out of some initial research or consultancy work that the provider has undertaken for the client company and evolves into larger, even group-wide, development projects. Custom programmes clearly are not a cure-all; they are only viable when there are enough participants to warrant the investment. Open enrolment programmes will continue to be offered so that individual managers or small groups can make use of them. The open enrolment programme also has its supporters as it provides a forum for a wider exchange of inputs with participants coming from a much greater variety of backgrounds than a custom programme can offer. The custom programme style of teaching is blurring the distinctions between traditional business school roles and consultancy. Before a custom programme can be run, a great deal of interaction between faculty and client will have occurred to understand the exact issues that the client is facing and how the programme can be built to offer an effective solution. This means that the provider is taken much deeper into the clients' business than traditional client-provider relationships ever managed before. The evidence is that organizations enjoy this deeper relationship. Hanna Summanen, programme and faculty director at MCE, describes how pharma companies now represent 10% of their in-company custom programme revenue and are seeing the interest in this area, from all sizes of pharma organization, grow each year. It will be interesting to see whether many of the other leading business schools in Europe start to offer pharma-focused programmes beyond the handful that do so already. The growth of the custom side of the executive education industry may well away with the need - as companies can tailor programmes to their needs in collaboration with the provider without having to share their issues in public through open enrolment courses. References1. How Large Corporations Source Exec- Programs, IEDP.info, July 2005.
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