Case Study: Custom Executive Education, Hasbro and Tuck.
A New Way to Play
Redesigning executive education
for maximum impact
Author: Mark Laser
First published: 2005
Executive education was once all about individual
development. If a firm had bolstered fourth-quarter sales by 20
percent through the introduction of a new ad campaign or had bumped
up its market share from number three to number one with a key acquisition,
it might send the VPs of marketing or M&As to a summer executive
program to further boost their skills. There they’d get a
break from the office to concentrate on the specifics of their industry,
rub shoulders with executives from other companies, and perhaps
pick up strategies for profitability analysis or corporate communications.
These open-enrolment programs were event-oriented, consisting of
discrete sessions on general-management issues designed to benefit
the individual. At the program’s end, executives would return
to the office armed with new knowledge, ready to get back to business.
Companies today are much more savvy about using executive education,
says James Danko, Associate Dean of Strategy and Operations at Tuck
School of Business. “Firms are looking for organizational
impact. They want to make every dollar count by making sure the
program applies to their specific needs.” Although companies
still use open-enrolment programs to enhance their managers’
personal leadership development, the emerging model for executive
education is to design issue-specific programs aimed at advancing
the company’s core mission and improving its bottom line.
As a result, growth in custom executive education is now outpacing
that of open-enrolment programs for many premier business schools.
According to a recent survey by UNICON, the International University
Consortium for Executive Education, 29 of 37 top-tier schools said
their custom executive education business was growing faster than
their open-enrolment business. Tuck signed seven major accounts
in the past year, including Hasbro, Raytheon Integrated Defense
Systems, Infineum, Avaya, the Minority Business Development Agency,
the Women’s Business Enterprise National Council, and Anthem
Blue Cross and Blue Shield. Danko notes that Tuck has been building
its custom executive education capabilities over the past two years.
“We’ve gone through a major strategic shift away from
open-enrolment toward custom programming,” he says. “Tuck’s
culture really supports this. In our MBA program, we’re great
at getting to know our students, working closely with them, and
understanding their issues. The same thing is holding true for our
custom programs.”
"We’ve gone through a major strategic
shift away from open-enrollment toward
custom programming."
James Danko, Associate Dean of
Strategy and Operations
Many corporations are looking to custom executive education as
a way to help develop their next generation of leaders. Hasbro,
Raytheon, and Avaya, for example, have all focused on leadership
development in their custom programs at Tuck. Companies are also
using custom programming as a means to address specific issues,
such as optimizing global supply chain management or enhancing financial
management. Infineum, for example - a manufacturer of high-quality
fuels, lubricants, and specialty additives - designed a program
with Tuck to strengthen its business-to-business marketing.
“In a custom executive education initiative, we address the
development needs of individual executives in the context of their
company’s critical business issues,” explains Clark
Callahan, Tuck’s executive director of executive education.
“The result is a much more powerful learning experience -
one that combines high-level business acumen skills with behaviours
to successfully use those skills. This enables executives to put
what they learn into action and improve their leadership and management
capabilities while delivering a high return on the investment to
their organizations.”
Learning Partnerships
Tuck’s basis for building its custom executive education
business centres on creating deep long-term partnerships with a
select group of leading business organizations. “One of the
five pillars of the strategy we initiated several years ago was
to build strategic relationships with 25 or so influential companies,”
says Professor Vijay Govindarajan, who also serves as faculty director
for the Hasbro program. “Custom executive education helps
us establish learning partnerships with such companies that can
broaden and evolve into something more meaningful.”
Govindarajan cites Hasbro as an example of the sort of company
that fulfils this strategic objective: it’s a leading corporation—America’s
number-two toy and game company—in an industry that matches
well with faculty research interests, from corporate strategy to
brand management to globalization. It has great name recognition
with many premium brands - G.I. Joe, Monopoly, Magic the Gathering,
and Mr. Potato Head, to name a few. A multinational corporation
with operations in more than 25 countries, Hasbro is a committed
corporate citizen with a long tradition of supporting children worldwide
through a variety of philanthropic programs, such as the Hasbro
Children’s Foundation. And, says Govindarajan, it’s
a company in the midst of an impressive turnaround.
"Custom executive education helps us
establish learning partnerships with such
companies that can broaden and evolve
into something more meaningful."
Professor Vijay Govindarajan
His assessment is in stark contrast to Hasbro’s state in
2000, when it lost $144.6 million. Chairman and then CEO Alan Hassenfeld,
grandson of one of the company’s founders, turned to Hasbro
veteran Alfred Verrecchia for help, promoting him to president.
Verrecchia, who started out as a junior accountant in the company
more than 35 years ago, moved all the toy divisions to the company’s
headquarters in Pawtucket, Rhode Island, to cut costs and improve
teamwork, reduced Hasbro’s long-term debt, and focused on
extending Hasbro’s core brands. Since then, Hasbro’s
stock has risen 60 percent. In May 2003, Verrecchia was promoted
to CEO, with Hassenfeld continuing as chairman.
From the experience, Hassenfeld and Verrecchia recognized that
building leadership capability from within an organization can be
a tremendous asset worthy of investment. The importance of grooming
Hasbro’s next generation of leaders became critical to the
company’s long-term vision. As a result, custom executive
education was identified as a key component of Hasbro’s leadership
succession plan.
In developing their custom program, Hasbro began with a list of
50 potential providers and narrowed it to four business schools—Michigan,
Columbia, Wharton, and Tuck. “The approach to leadership development
at Tuck is very much in tune with our style of management,”
explains Robert Carniaux, Hasbro’s senior vice president of
human resources worldwide. “Tuck has a relaxed but focused
environment, as does Hasbro. Tuck blends theoretical knowledge with
practical applications. We knew we wouldn’t be coming to an
ivory tower. We’d be coming to a place with solid insight
into the pragmatic world of business.”
Tuck’s willingness to create and deliver a truly customized
program was also vital. During the program design phase, the Tuck
team spent months interviewing senior management, conducting surveys,
and holding focus groups to identify Hasbro’s strategic needs
and business challenges. Among the company’s strategic concerns
is the changing nature of family entertainment: today’s families
have less leisure time than did those a generation ago and more
sources of entertainment, most notably from digital platforms such
as wireless and the Internet. Hasbro must also respond to changing
demographics in the U.S. - baby boomers are aging, and the population
is becoming more racially diverse—and emerging markets in
countries that place great value on playtime but have limited per
capita income. “There’s a strong fit between Hasbro’s
need to address these issues and Tuck’s strength in strategy,”
says Govindarajan.
In addition to strategic intent and direction, Tuck and Hasbro
identified four more themes around which to design the program:
leadership, brand building, globalization, and relationship management
within the organization. They created a program that involved a
week of classroom sessions at Tuck, one-on-one training with executive
coaches, and a set of five action-learning projects in which teams
of participants use what they’ve learned to solve real business
problems at Hasbro. The company intends to send between 200 and
250 executives, covering all management tiers within the organization,
through the program over the next two to three years.
The inaugural class arrived in Hanover, New Hampshire on August
22, 2003, and for the next five days, this group of 28 pan-Hasbro
leaders, representing the company’s operations in the U.S.,
Europe, Canada, Asia, and Latin America, became a cohesive corps
focused on one goal - making Hasbro’s strategic vision a reality.
Their schedule included classroom sessions on strategy and globalization
with Govindarajan, brand management with Professor Kevin Lane Keller,
and emerging markets with Professor Kusum Ailawadi. Anthony Smith
- a director of the Leadership Research Institute, a consulting
services firm specializing in leadership development - held a daylong
session on inspirational leadership, Professor Len Greenhalgh spent
a morning discussing the leadership role in strategic decision making,
and Professor Rick Shreve led a discussion on ethics and social
responsibility. The program also featured conversations with the
Hasbro senior executive team at the beginning and end of the week
and dinners with Brian Goldner, Hasbro’s president of U.S.
Toys, and with Hassenfeld, who also spent the week at Tuck.
“I came here with some hesitancy,” admits Hassenfeld.
“‘Will the program be boring?’ I wondered. ‘Will
it be relevant, given that the faculty are not necessarily working
in the workaday world of business?’ After the first day, everybody
was sold on the program. It’s opening completely new worlds
of thinking for us.”
Measuring Success
Strategic direction, leadership succession, bottom-line results
- custom executive education programs, to be competitive, must be
able to demonstrate that they have a meaningful effect on the organization.
For a program to be successful, says Danko, it must be built on
a thorough understanding of the organization, with a direct link
between the company’s business goals and strategy and the
program’s learning objectives. The learning process itself
should be active and lead to individual discovery, growth, and behavioural
change - transformation guided by systematic assessment, coaching,
and peer interaction.
Danko explains that Tuck measures the success of its custom programs
on multiple levels. The first is the participants’ response
on a program evaluation completed at the end of the week. The second
is participants’ behavioural changes, as measured by pre-
and post-program leadership assessments in which each executive’s
superiors, peers, and direct reports confidentially evaluate his
or her performance. Executive coaching sessions provide additional
feedback regarding positive change in behaviour and performance.
The third level is the extent to which participants acquire new
knowledge as a result of the program, which is also measured by
pre- and post-program assessments. The final level is business impact,
as determined by the success of the action-learning projects. One
of Hasbro’s action-learning projects, for example, focuses
on developing a strategy to capture a greater share of the Hispanic
market. After six months, the project teams will present their recommendations
to senior management and will be evaluated on how well they addressed
the problem.
The ultimate measure of success, says Jane Kirkland - who has assisted
Tuck in designing custom programs - is a company’s ability
to solve its own strategic problems. “The essence of what
we’re trying to achieve through custom executive education
is building the capability of executives to solve their organization’s
problems,” she says.
Both Hassenfeld and Janson, Hasbro’s vice-president of organisational
effectiveness and diversity, and project leader of the program,
say Hasbro’s custom program “is already a success,”
noting that it has fostered relationships between people in the
company who had never met or worked together before and has helped
energize the organization.
“The first round knocked it out of the park - our participants
called it a grand slam,” says Janson. “It has created
such a positive experience for them - their level of enthusiasm
and commitment has been tremendous.”
Benefits all round
The key to Tuck’s success in custom executive education,
says Keller, is choosing the right partner: the company should be
high-end, its business should be compatible with the faculty’s
research interests, and its senior management must endorse the program.
“Hasbro’s a great example - they’re smart, engaged,
committed,” he says. “And they’re a good match
for me personally because of my interest in consumer marketing.
I have two daughters in elementary school, so toys are definitely
on my radar screen - if not under my seat!”
Custom executive education benefits Tuck in many ways. It puts
faculty in close contact with senior executives, giving them an
inside view of the major concerns of industry. This enhances both
their research and teaching, as they are able to then feed their
knowledge back into the classroom. It can also benefit the MBA program
through increased opportunities for internships, recruitment, visiting
executives, and guest speakers.
“As a business-school professor, it’s critical for
me to stay current because the business world is changing all the
time. In the ’90s, for example, employee retention was a big
concern; today, it’s globalization and outsourcing,”
says Greenhalgh, whose areas of expertise include human resources
management and organization behaviour . “Custom executive
education, which involves a detailed needs analysis of the client,
helps me identify and better understand the current issues. This
informs my research and makes me more effective and relevant as
a teacher.”
Perhaps the most satisfying aspect of custom executive education,
says Govindarajan, is the opportunity to make a difference for the
company. “The interesting thing about custom programs is that
the more you understand the customer, the more you want to understand
the customer. You become involved at a personal level and want to
help them succeed,” he explains, noting that he has already
made a lot of friends at Hasbro. “You’re making an impact
with someone you know. That’s the real reward.”
Hasbro Chairman, Alan Hassenfeld: On Leadership
Alan Hassenfeld strongly believes that people are Hasbro’s
greatest resource. As the grandson of one of the two Hassenfeld
brothers who founded the company, and having worked his entire 30-plus-year
career at the company - including more than 13 as CEO - Hassenfeld
knows the value of developing leadership and building the organization
from within. And he is committed to working with Tuck to help prepare
Hasbro’s next generation of leaders.
“I want to help create Hasbro’s future by making sure
we have truly given our people a chance to grow,” he says,
offering these thoughts on what it takes to be an effective leader:
- You have to be a visionary.
- You must have good people skills—especially good listening
skills.
- You need to surround yourself with people who are smarter than
you are.
- You must build a good team and have confidence in it.
- You must leave your ego at the door.
- You should lead by example.
- You must be the moral gatekeeper and live by those ethics yourself.
- You must make the hard decisions.
- You cannot be all things to all people.
Jane Kirkland: Helping the Company Help
Itself
“Give a man a fish and you feed him for a day. Teach a man
to fish and you feed him for a lifetime” - the Chinese proverb
sums up Jane Kirkland’s philosophy on executive education.
“In many situations, building capability within the organization
is a better option than hiring a consulting firm.”
Kirkland, who worked at McKinsey & Company for 11 years before
starting her own consulting and private equity investing businesses,
has been assisting Tuck with the design of its custom executive
education programs. She says she became interested in executive
education on an assignment at McKinsey for which she designed a
2 1/2-day program for VP-level executives at Westinghouse. “I
saw how powerful that experience was for those executives. And I
really enjoyed the work.”
Kirkland - who has assisted with developing the Avaya, Hasbro,
General Electric, and Raytheon programs - says her role involves
a combination of client relationship management, program design,
and project management. “It’s my job to understand the
client’s strategic objectives and business issues, identify
the leadership skills the company is trying to develop, and help
it translate that into a program that Tuck can deliver.”
She says she enjoys working with high-quality corporations and
senior executives, interacting with faculty who are leaders in their
fields, thinking about business ideas, and determining what knowledge
will be most beneficial for the client. And she welcomes the opportunity
to remain involved at Tuck. She’s also an active member of
Tuck’s MBA advisory board, where she has participated extensively
in discussions of the MBA leadership model and helped write the
initial draft syllabus of the Selling Skills course being offered
this year in the MBA program.
“I loved the entire MBA experience. It opened a whole new
horizon for me. I’m pleased to be able to help Tuck as it
takes its custom executive education program to the next level.”
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