Report of the Executive Education Review Committee

2018 年 1 月 18 日 2:03 下午

Confidential

Bob Ashton John Lynch John Payne (Chair) Blair Sheppard Vish Viswanathan and Wanda Wallace (ex officio)

Working Draft. 2

Introduction

The Good News is that the worldwide demand for executive education programs is growing. Furthermore, the most rapid growth is in the demand for custom executive education programs. The Fuqua School of Business is recognized as a leader in the development and delivery of custom programs for individual firms. The Bad News is that there a perception of a growing mismatch between the demands of custom executive educational programs and the interests and capabilities of our tenured-track (research) faculty. In overly simple terms, our research faculty tend to have a deep knowledge of specific topics, e.g., options theory, and a broad knowledge about multiple firms. Also, members of the Fuqua faculty are most experienced and comfortable teaching programs like our day MBA program. Such teaching emphasizes depth of content knowledge, breath of industry knowledge, and the clear delivery of information. On the other hand, custom programs (particularly those with an organizational change component) require faculty with a broader range of content knowledge and a willingness to acquire more in depth knowledge of a specific firm. In addition, teaching in custom programs requires skills of relationship management, facilitated learning, and an emphasis on immediate relevance, that are not as much of a focus in MBA teaching. Part of this teaching “style” difference is traceable to the fact that there is no degree being offered to executive education participants. The Executive Education Review Committee was charged to review and make recommendations concerning the future of executive education at the Fuqua School of Business. The idea was for the committee to take a broad view of our strategy for executive education over the next several years. As part of its efforts, the committee reviewed the portfolio of executive education programs at the Fuqua School of Business (FSB), the faculty resources at FSB, and the financial issues associated with executive education at Fuqua. We also investigated the current and expected changes in the market for executive education programs. Included in this investigation were conversations with representatives of two of Fuqua’s major clients (Siemens and Deutsche Bank) and phone interviews with more representatives of more than 35 companies. Finally, information was obtained on executive education programs at comparable schools of business. The committee’s report is organized as follows. First, various aspects of the problems (issues) facing executive education at Fuqua are identified. Next, several strategic options for the executive education program at Fuqua are outlined. Finally, the recommendations of the committee in light of those strategic options are presented. Appendices to this report contain an overview of the current status of executive education programs at Fuqua, a discussion of the trends in the marketplace for executive education, and some observations about executive education at other business schools. Also included as appendices are a market research report by John Lynch and the Market Intelligence class at Fuqua and a business proposal for Executive Education drafted by Wanda Wallace. 3

Major Issues

Multiple Objectives.

Executive Education at Fuqua has several major objectives. A major question facing the school is how to balance the multiple objectives we have for executive education at the Fuqua School of Business. The first goal of Executive Education is to enhance the practice of management through short non-degree educational experiences for middle and upper level managers. Thus, Executive Education is designed to be part of Fuqua’s educational mission. Second, executive education programs at Fuqua are designed to make a substantial financial contribution to the school’s budget. The financial contribution goal for Executive Education reflects the fact that Fuqua’s endowment is only about 25% of the endowments at our targeted competitor schools. Thus, the need for alternative sources of revenue (profits) to support the schools portfolio of activities, most notably research. A third objective (benefit?) of Executive Education is to support a larger research faculty by providing the opportunity for our faculty to meet their teaching obligations through executive education. Thus, executive education has the potential for the school at large, and individual areas within the school, to have a larger research faculty than would be warranted simply on the basis of the size of our degree programs. However, research faculty, if compensated in the form of course credit are relatively expensive for executive education. Programs in executive education must be designed in such a way that they justify a company paying the premium associated with a research university like Duke. A fourth, and related goal, for executive education at Fuqua is to enhance the knowledge our research faculty has about current problems facing companies. That is, executive education can help build the “institutional” knowledge our faculty has about the challenges facing business. Note that meeting this objective and the one above requires that a substantial amount of the executive education teaching be by our research faculty. Furthermore, for objective three to be met the teaching has to be compensated for in the form of course credit, not cash (currently about 45% of the Fuqua faculty teaching is done for course credit). Otherwise, the research productivity of the school may be hurt, not helped. An underlying principle of Executive Education at Fuqua should be that teaching is traded for teaching, research is not traded for teaching. Finally, Executive Education is designed to enhance the visibility of the school within the business community. More specifically, Executive Education can help build relationships with key companies like Ford and Deutsche Bank. Overall, Executive Education at Fuqua is doing a good job in meeting our first objective, a questionable job of meeting the second objective, a poor job of meeting the third and fourth objectives, and a good job of meeting the fifth objective. This assessment of the performance of Executive Education in terms of its multiple goals should not be taken as reflecting any lack of effort on the part of the staff in Executive Education. They work very hard for school. In the next parts of this section of the report we elaborate briefly on the financial contributions made by Executive Education, changes in the executive education marketplace, and what our “competitors” are doing in the area of executive education. More details on each of these issues are provided in Appendices A, B, and C. 4

Financial Contribution of Executive Education. Executive Education has generated a large amount of revenue for the school. For instance, the revenue for 1998/99 was about $14 million. However, one major issue facing the school is that the total gain to the school from executive education activities is only about $700,000 or only about 5% or revenues. For comparison, the WEMBA program generates a total gain to the school of $1.6 million on revenues of $6.6 million. The projected figures for the proposed NEMBA USA program are $7.6 million in revenue and $1.2 million in total gain to Fuqua. These “gain” numbers reflect decisions about how to allocate fixed costs across the programs at FSB. However, they are roughly comparable numbers. [If certain fixed costs are not allocated to Executive Education the total contribution from Executive Education is about $3.4 million (for WEMBA the comparable number is $3.1 million, for NEMBA USA, the projected contribution is $$2.4 million). One recommendation of the committee is to develop better “income statements” for our various programs.] Another financial issue for Executive Education is that much of our revenue is tied to just a few clients. For example, forty-six percent of the total executive education revenue from 7/1/98 to 6/30/99 is from one company: Siemens. Fifty-three percent of the gross profits are from Siemens. Such a concentration of revenues causes obvious risks in terms of school finances and in terms of the management of programs.

Changes in the Executive Education Marketplace. The marketplace for executive education programs can be divided into four types of programs. The four types of programs represent combinations of target audience (open-enrollment or firm-specific) and topic (general management, functional (special topic), and change initiatives). An example of an open-enrollment and general management (type 1) program is our Program for Management Development (PMD). The only current example of an open- enrollment functional (type 2) program at Fuqua is the Marketing Leadership Forum. An example of firm-specific functional (type 4) program at Fuqua is the Ford program. Another firm-specific functional type program is being discussed with First Union in the area of finance. An example of a firm-specific general management program is the Siemens program. The percentages of Fuqua revenue in 1998/99 generated by each of these four types of business was 19.8% (open – gm or type 1), 0.8% (type 2 – open funct.), 58.9% (type 3 – firm - gm), and 20.5% (type 4 – firm – funct. , this includes custom-change programs). Thus, only about 20% of our current revenues are from open- enrollment programs. Another important distinction among executive education programs is the extent to which programs are positioned as part of a change effort. Several of our current clients view our executive education programs as part of a corporate change effort. That is, the focus is not so much on enhancing the capabilities of an individual manager as it is on changing the performance of the firm. Appendix B provides more information on the trends in the executive education marketplace. A major issue facing the school is how respond to the changes in the executive education marketplace. For example, is the growing demand for customized programs one that fits the interests and capabilities of our largely fixed research faculty? Do we have an organizational structure for executive education that will well serve the developing market for executive education? Also, are our pricing and compensation 5 schemes appropriate for the growing emphasis on customized programs? The changes in the executive education marketplace will likely require changes in how Executive Education is structured and operated, e.g., compensation plans.

Strategic Options

For purposes of discussion, the committee identified three broad strategic options for executive education at the Fuqua School of Business. These options should be viewed as starting points for discussion. Obviously, the agreed upon strategy for the school will likely involve elements of each of these three options. However, we felt that it was worthwhile to provide these three options as a starting point for the discussion by the faculty, Dean’s office, as well as by the committee. Some Pros and Cons for each option are discussed.

Option 1: Direct Fuqua Control with Custom Focus

The organizational structure for Executive Education with this option would remain the same. That is, the Associate Dean for Executive Education would report directly to the Senior Associate Dean for Programs. Also, this option builds upon our current success with custom programs. We would try to grow the number of custom programs we delivery to important corporate partners like Siemens and Glaxo Welcome. However, this option would still require some changes in Executive Education. For example, a crucial challenge with this option is the development of Academic Program Directors to manage our custom programs. Some of the recommendations listed below should still be implemented with this option, e.g., faculty teaching contacts. A key part of this strategic option would be the continued ability of many of our tenure-track faculty to do executive education for course credit. This course credit component of our executive education programs has implications for how we price our programs. It also has implications for the types of custom programs we should pursue in executive education. For example, programs like the proposed finance program for First Union are very desirable programs with this option. This option would have a target revenue number in the range of $15 to $20 million over the next few years.

This option is the easiest to implement. While there are challenges with this option, e.g., the need for academic program directors, we do have a somewhat successful track record with this option. This option also has the least risk in term of short- term revenues. In addition, this option encourages Fuqua faculty to be involved in Executive Education. Among other things, this faculty link is helpful for faculty development. This option is the best of the three options when one considers all the other initiatives being undertaken by the school in terms of managerial and faculty attention.

Cons 6

There is a need to hire faculty to serve as APDs. Also, substantial funds will need to be spent on faculty development. In addition, the growing gap between what we say we are doing in Executive Education and actual practice is likely to continue. Overall, this option may make more sense in the short-term than as a long-term strategy. Over time, the committee feels that we will need to move more in the direction of either options 2 or 3.

Option 2 The Harvard (Wharton) Model: Make Executive Education an Independent Business Unit with a Custom Focus.

The idea behind this option is to operate Executive Education like it operates at other top business schools such as Wharton, Northwestern, and Harvard. That is, the executive education part of our business would be treated more like a separate business unit. An extreme version of this option is illustrated by the recent incorporation of a unit of the Harvard Business School for the purpose of providing custom executive education programs to companies. The new Harvard Executive Development Center (EDC) is incorporated as a non-profit entity owned by the Harvard Business School. The “contributions” from the center go directly to the Dean of the Harvard Business School. Open-enrollment programs continue to be offered by the Executive Education department that is part of the Harvard Business School. Open-enrollment programs of less than two weeks are “owned” by individual departments, e.g., marketing. A business proposal for Executive Education that is consistent with this option is provided as Appendix E. The goal for Executive Education would be to maximize net contributions to the school’s budget while continuing to deliver programs that are of the quality that should be associated with the Fuqua brand. A key organizational issue associated with this option would be the governance structure for Executive Education. For example, we might have an executive committee for Executive Education that is comprised of tenured faculty who have the responsibility to make sure that what is taught in Executive Education programs is of the quality we expect at Fuqua. More generally, the basic governance structure for this option could be a board of directors. The chair of the board would be the Dean of the Fuqua School of Business. Other members of the board would include tenured faculty. A subcommittee of the board could serve as a “curriculum committee” for executive education. Another organizational issue is whether we want to have separate structures for “open enrollment” and “custom” businesses. Issues like faculty compensation for executive education activities could then be dealt with separately for the two lines of business, e.g., course credit would be the norm for teaching in open enrollment programs. People who teach in the custom business may or may not have titles like professor of the practice. Finally, there is an important organizational issue regarding how an independent Executive Education business would relate to our various distance learning initiatives, e.g., the PENSARE deal. For example, should Executive Education have its own distance learning development and delivery capabilities? If so, how should those capabilities relate to our distance learning efforts in GEMBA, CCEMBA, and the MBA programs? 7

The target revenue from this option would exceed $30 million.

This option has the advantage of narrowing the list of major objectives for Executive Education. It also provides Executive Education with much more flexibility in meeting those objectives. For example, Executive Education would have more options for finding faculty to teach and could pay market rates for faculty time. A key part of this strategic option would be to rethink the extent to which faculty should be able to do executive education for course credit. In the extreme, we could essentially eliminate this option. As noted in Appendix C, many of our competitors restrict the ability of faculty to do executive education for course credit.

The course credit for executive education teaching issue is a fundamental one for Fuqua. There are several strong arguments in favor of keeping the course credit for executive education teaching option. Allowing a faculty member to do executive education for course credit means that executive education teaching can substitute for other teaching, not for research efforts. If the only option is to do executive education for money then there is the possibility (the likelihood?) that executive education teaching will have a negative impact on the research productivity of the faculty. Another argument for keeping the course credit option is that it helps to maintain the view of Executive Education as an integral part of the Fuqua School of Business. Eliminating the course credit option, on the other hand, would allow Executive Education to manage costs better. As noted above, Executive Education would have more flexibility when paying cash to faculty, both within and outside the school. Another concern with this option is how to make sure that the material offered in Executive Education is of a level consistent with the Fuqua brand. Finally, Fuqua faculty might not gain institutional knowledge as readily with this option. In fact, it is not clear how much the tenure track faculty at Fuqua would be involved in Executive Education with this option. Exactly how many FTEs would be supported by Executive Education is unclear with this model.

Option 3 Direct Fuqua Control with a Focus on Open-enrollment programs.

The idea underlying this option is to make the program offerings in executive education closely match the interests and capabilities of our tenure-track faculty. With this option, we would continue to offer course credit as an option for those who teach in executive education. In fact, we would try to encourage as many tenured-track faculty as possible to teach in executive education programs that emphasized either general management or topics of special interest, e.g., marketing on the internet or options theory in finance. One feature of this option might be the increased “ownership” of executive education programs by the various areas within the school, e.g., a program on marketing on the internet. Of course, there could also be joint ownership of programs that might 8 cross area boundaries, e.g., a program on mergers and acquisitions. This option could include the offering of open-enrollment certificate programs in areas like Finance.

This option better suits the interests of our current faculty. An important advantage of this option is that it free up scarce faculty resources for initiatives like the new CCEMBA program and the PENSARE deal. In some ways this option is like the executive education strategies being followed at Stanford and Chicago. That is, the school focuses its attention primarily on degree and certificate programs.

Clearly, the major cost of this option is the reduction in revenues coming into the school. Executive education would produce a lot less revenue. A reasonable revenue target with this option is probably around $5 million. There is a lot of competition in the open enrollment market and customers tend to be price sensitive. Furthermore, it often takes three years for a program to reach profitability. This option also has risks in terms of the visibility of the school with key corporate partners. It is a production-driven rather than customer-driven approach to executive education.

Recommendations

Below are a number of recommendations regarding Executive Education at the Fuqua School of Business. Some of these recommendations go with each of the strategic options listed above. Others assume that strategic option two is pursued.

1) Executive Education should be set up as an independent business unit owned and controlled by the Fuqua School of Business. Control over the Executive Education unit of the Fuqua School of Business should be through a board of directors that would include the Dean, Senior Associate Deans for Programs and Faculty, and appointed tenure-track Fuqua faculty. Additional “outside” people may serve on the board. However, control must very clearly reside with the Fuqua School of Business. The Chief Executive Officer for the Executive Education unit of the Fuqua School of Business need not be a Fuqua faculty member. 1 2) The goals of Executive Education should be a) the development and delivery of the highest quality executive education experiences, b) the contribution of funds (profits) to the Fuqua School of Business, c) the development of strategic partnerships with a small number of selected firms, and d) the enhancement of the teaching and research capabilities of the faculty at the Fuqua School of Business. 3) The strategic focus of Executive Education should be on the design and delivery of custom programs through a mixture of on-site and distance learning technologies.

1 The exact legal structure for Executive Education will need to be worked out with the University Counsel. One important issue will be the extent to which people working for Executive Education will be covered by the normal Duke University Human Resource policies. If the Executive Education staff will not be covered, then the current staff in Executive Education will need to be consulted about the proposed changes. We will want to treat the staff fairly. 9

Executive Education will also offer to assist selected companies in their efforts to develop and run their corporate universities. However, Executive Education should continue to offer a small number of open enrollment general management programs, e.g., the Program for Management Development. In addition, as noted below, Executive Education should offer a small number of open enrollment functional programs. A target for the proportion of revenue from custom programs should be 70% of the total revenue for Executive Education. It also should be a goal of Executive Education to limit the revenues from any one firm to less than 20% of the total revenue. Open-enrollment programs, including Certificate programs, would be expected to generate about 30% of the total revenues. 4) Fuqua faculty should be able to exchange teaching and other executive education activities for credit toward their teaching obligations. The rate should be 6 “days” of executive education equals 1 course in our degree programs. The cost charged to Executive Education for a teaching day should reflect the variable cost of supporting the average Fuqua faculty member. The Fuqua School of Business will cover the “fixed” cost of a Fuqua faculty member in order to encourage Fuqua faculty participating in Executive Education for course credit. 5) Executive Education should write contracts with Fuqua faculty that extend for a year or more. The contracts would specify the number of Executive Education days that a faculty member would be expected to teach in Executive Education for course credit. Assuming a good faith effort on the part of the faculty member, it will be the responsibility of Executive Education to provide that number of Executive Educational days of teaching. An Executive Education contract will be a joint agreement between the faculty member, Executive Education, and the Fuqua School of Business. That is, the Fuqua School of Business will have to agree that teaching the specified amount in Executive Education for course credit by the specified faculty member is in the best interests of the Fuqua School of Business. The contracts will normally be negotiated when course schedules are determined. Whenever possible, the length of the contract should be at least two years. We want teaching in Executive Education to be as similar as possible to teaching in our degree programs and to allow for planning of our faculty needs. 6) A faculty member who teaches in Executive Education for course credit will be expected to continue to do the level of research and service activities expected of Fuqua faculty. It will be the responsibility of Executive Education and the particular faculty member to ensure that the time spent in executive education teaching doe not exceed the time normally spent doing the same amount of teaching in our degree programs. Again, the underlying principle is that teaching in Executive Education should substitute for other teaching, not research. 7) In addition to teaching in Executive Education for course credit, faculty will be able to teach for pay. The pay rate for a day of teaching will be a percentage of one’s base salary, e.g., 2.75% or 3%. Of course, no one should teach in Executive Education more days than would be consistent with his or her responsibilities as a member of the Fuqua faculty. If strategic option 2 (recommendation 1) is adopted, an alternative would be to allow the cash rate to be set through individual negotiations that would reflect “market rates”. A modified “market model” would be to set a base teaching 10

rate for cash or course credit that would apply for most faculty. Executive Education could go above this rate for extraordinary executive education teachers. 8) Executive Education should seek to develop more open-enrollment functional programs that meet market demands and fit the skills and interests of Fuqua’s faculty. For example, programs that focus on special topics in marketing and finance should be developed. Included in this category of programs are courses that would be cross- functional, e.g., a program on mergers and acquisitions. It will be the responsibility of individual areas, e.g., marketing, to work with Executive Education in the development, marketing, and delivery of such programs. One important goal of such programs will be to enhance the reputation of the Fuqua faculty with managers. The “profits” from such programs will be shared with the involved areas. For example, the Finance area would receive 50% of the profits from a special program in finance. The profits would be used to provide “extra” support for research. A different, but related, arrangement would be worked out for firm-specific functional programs. An open question is whether or not individual faculty should share in the profits through such mechanisms as increases to FAB’s accounts or summer support. 9) Any involvement in Executive Education activities on the part of the faculty should normally be compensated. Of course, faculty may choose to work with Executive Education in the design and marketing of programs for “free” in the expectation that teaching opportunities will arise. However, faculty who teach, do field research, manage programs, and work with clients in other ways, should be paid in the form of cash or course credit. 10) Executive Education should be able to hire staff, including instructional personnel. However, no one hired by Executive Education shall be considered as part of the Fuqua faculty. People who have faculty appointments at Fuqua (tenured track or not) must go through the normal appointment and review processes of the Fuqua School of Business. 11) A certificate program offered by Executive Education must be approved by the Curriculum committee of the Fuqua School of Business. Certificate programs will be reviewed by the Curriculum committee every two years. A goal of Executive Education will be to have a Fuqua faculty member serve as the Academic Program Director for any certificate program offered by Executive Education. 12) As noted above, one of the goals for Executive Education is to enhance the teaching and research capabilities of the Fuqua faculty. Consequently, Executive Education will strive to help Fuqua faculty to be able to teach in executive educational programs. Executive Education will also strive to transfer learning about managerial problems and practices from its executive educational programs to the Fuqua School of Business.

In summary, the committee feels that the Fuqua School of Business should continue to be a leader in executive education. However, a number of changes are needed in how we do executive education business. The recommendations listed above should be part of those changes. 11

Appendix A:

The Current Status of Executive Education at the Fuqua School of Business History of Executive Education at the Fuqua School of Business

We have been actively engaged in executive education since the early 1980s. A key historical decision was the decision in the 1980s to focus on customized programs. Consequently, Fuqua is well known for custom programs. The total number of teaching days projected for 1998 / 99 is 552. The total number of days in 1996 / 97 was 422. In addition, faculty will do about 244 days as Academic Program Directors in 1998/99. This is compared to 88 days in 1996/97.

Current and Projected Revenue and Contributions

As noted earlier, Executive Education has revenues of approximately $14 million. (As mentioned in Appendix C, revenue at our major competitors ranges from $10.5 million to more than $40 million.) The total gain to the school of Executive Education is near $700,000. As noted earlier, this “profit” figure depends upon how various indirect costs are allocated to Executive Education.

Program Mix:

Fuqua is clearly at the extreme in terms of its focus on tailored programs. Approximately 80% of our revenues are from tailored programs. This percentage is increasing. As mentioned, we have only one open-enrollment topical program in our list of offerings. In addition, the number of sections and participants in our open-enrollment general management programs is not increasing. Compared to other leading business schools, Fuqua doesn’t appear to emphasize either “star” faculty or ideas in the design and marketing of our programs. What are the “advanced” topics that we teach in our programs? There are surely some, but we don’t seem to emphasize that fact in our programs as do our competitors.

Client Mix

Fuqua serves a relatively small number of companies. However, those companies are global in scope and represent a variety of industries. Included in the companies for which we produced custom programs in 1998/99 are Ford, Deutsche Bank, Glaxo Wellcome, Citibank, Siemens, and Lafarge. The hope is to develop relationships with a least some of our clients that extend beyond just executive education. Good examples of this type of relationship are the relationships we have developed with Ford and Deutsche Bank. Faculty Utilization

Faculty Roles. Fuqua faculty play two major roles in Executive Education. First, faculty teach in our various programs. The typical model is for a faculty member to teach a day or two in a given program. About 40% of the teaching days in Executive Education in 1998/99 involved tenure track Fuqua faculty. Increasingly, faculty in Executive 12

Education extend their teaching activities beyond the classroom day. For example, faculty are asked to continue to provide guidance and instruction to participants in action projects and other extended learning activities. A recent program with Deutsche Bank included such extended teaching activities. A second role for Fuqua faculty is to manage programs as Academic Program Directors (APDs). Academic Program Directors perform the following duties: 1) APDs manage the program on-site, including opening and closing individual days and just being present, 2) APDs decide on faculty utilization, 3) APDs ensure the academic integrity of the program, and 4) help design the program with the client (if customized). Additional information on the APD role can be obtained from Executive Education. Fuqua tenured track faculty do 54% of the APD activities in Executive Education. Faculty mix. Less than half of the teaching in executive education is done by our tenured track faculty, and that percentage is decreasing. For instance, in 1996/97 the percentage of teaching done by tenured-track faculty was 52%, today it is about 40%. About 33 of our faculty were involved in Executive Education as instructors or APDs in 1997/98. However, a large proportion of the teaching that is done by our tenured-track faculty is done by relatively few of our faculty. Ten faculty (tenured-track and not tenured-track) account for about 54% of the total days taught by our faculty. Thus, we are at risk in terms of our ability to deliver executive programs. Also, we are not gaining as much benefit as we might from the learning opportunities that executive education provides our faculty. Faculty mix by area. All of the areas in our school have participated in executive education programs. However, the participation in executive education is primarily from management, marketing, and to a lesser extent finance.

Compensation schedule

Currently, Fuqua pays its faculty $3000 a day for teaching in executive education. The pay rate is multiplied by a factor when a person teaches off-site. A faculty member at Fuqua has the option to exchange six days of executive education credit for one course credit toward his or her teaching load. As noted in the section of comparisons with other schools, this ability to exchange executive education days for teaching credits is not common at other leading business schools. Currently, about 45% of the teaching days in executive education that is done by Fuqua faculty is taken as course credit. In the past, much of this credit has been “banked” against future teaching obligations. However, the banking of course credit from executive education has become less attractive under the new IRS rules. An issue that is tried to the compensation schedule is who should bear what amount of risk in the development of an executive education day? Faculty have been able to develop a day for executive education that, if successful, could be taught multiple times (with slight enhancements each time). Thus, the investment in development by a faculty member was recaptured by the possibility of multiple teaching days. As we move toward more and more customized programs, the opportunities to teach the “same” day multiple days may decrease. Also, there is a greater risk that a particular client will not like the day for some reason, and the faculty member will therefore not be able to capture his or her development costs. In summary, the risk associated with doing a day of custom 13 executive education may (and is perceived by some faculty to have) increased over that associated with open-enrollment programs. How that increased risk should be factored into the compensation schedule is unclear. Local versus Distant Delivery of Programs An increasing percentage of our executive education programs are being taught off-site. A prime example of this trend is the Siemens programs. A major issue is how Executive Education should interact with the rest of the School in terms of the design and delivery of educational material via distant learning technologies. For example, how should our joint venture with Pensare relate to Executive Education? 14

Appendix B

Trends in the Marketplace for Executive Education

Attached is a report by the Marketing Research course taught by John Lynch on executive education issues as seen by a number of leading companies. The material in that report supplements the summary on market trends provided below.

The size of the market by types of programs

The non-degree executive education program generated approximately $19 billion in 1997. Some estimates have this number in the range of $60 -$70 billion. The marketplace for executive education can be divided into four broad segments defined by primary customer (an individual who is part of an open-enrollment program (OE) or an organization (Firm)) and content (general management or functional (cross- functional) special topic). Overall, firm specific or custom programs represent the fastest growing segment of executive education. Demand tends for various types of programs OE - General Management Programs: The current size of the market is about $900 million in revenue. The trend is flat or negative growth. OE – Functional: Larger than general management segment, i.e., about $3.2 billion in revenue. This segment is growing more rapidly than the general management segment. Firm – General Management Programs: The largest segment of the executive education market with about $10.4 billion in revenues. Firm – Functional: About $4.5 billion in revenues.

Executive Education Providers

The providers of managerial education include 1) Corporate Universities, 2) Consultants that train in-house, and 3) Universities. There seems to be a trend toward more in-house and consulting firm programs. For example, Mr. Anderson (VP of Education and Development, Johnson & Johnson) stated that “about ten years ago J&J used a lot of university-based programs. Now J&J uses much less of that type of program. Currently, the mix is 75% in-house and 25% consulting firms. The shift to in- house is due to the focus in leadership skill and the development of J&J leadership model. Have J&J Leaders teach so there is no need for external resoure.” An example of a consulting firm that is getting into the custom executive education business is the Round Table Group (RTG) of Chicago.

Expectations of customers for the programs and for the faculty.

The expectations of participants and client companies, has changed. Among those changes are the following: 1) Companies are increasingly concerned with the return on investment for the training and development dollars that are spent, 2) Companies are more interested in developing consistent corporate skills rather than individual skills, 3) Companies are demanding very high performance levels from their educational partners, 15

4) Companies are increasingly involved in the design and delivery of programs, 5) Companies are demanding quick changes as needed throughout programs, and 6) Companies and participants want learning and development in “smaller bites”. These changes are also discussed in Appendices B and D and in the report by the Market Intelligence class.

The role of distance and distributed learning technologies

There is much interest on the parts of companies to make greater use of distance and distributed learning technologies in provision of executive education. Part of this is motivated by the costs associated with having executives away from their jobs. Part of this trend is also a sense in which education that is more “on demand” will be more effective education.

Increased emphasis on more immediate and measurable outcomes of executive education programs.

One form of this is the increased use of “action learning” or projects as part of an executive education program. Another form is the testing of increased competencies on the part of executive education participants. 16

Appendix C

Executive Education at Other Schools

Who are our major competitors

Our major competitors include the University of Michigan, MIT, Northwestern, Stanford, the University of Virginia, Wharton, and in Europe, INSEAD, and the London Business School.

Program Mix at other Schools

Even schools that have extensive tailored programs, e.g., Michigan and Virginia, have a substantial number of open-enrollment topical programs. A good example of such a program is the Mergers and Acquisitions program at the University of Virginia. The percentage of revenues from open enrollment/functional programs at Michigan, Stanford, Virginia, and MIT range from 26% to 50%. Our percentage if about 1%. Similarly, the percentage of revenues at Michigan, Stanford, Virginia, and MIT from open enrollment/general management programs ranges from 23% to 55%. The percentage at Fuqua is 19.8% (98/99) or 16.4% (planned for 99/00).

Faculty Mix

We were able to get information on the proportions of teaching done by tenure- tract at Michigan, MIT, Virginia, and Stanford. Those proportions are about 75% to 95%.

Faculty Compensation Plans

In addition to Fuqua, several schools do allow for teaching credit for teaching in Executive Education. However, we were not able to get details on those arrangements. It is also clear that at some places, teaching credit is negotiated at the individual faculty level. The rate of compensation at our competitors is higher than at Fuqua. Reported amounts ranged from $3300 per day to $6000 per day, $7000 for off-site programs.. Some schools pay as a function of base salary, e.g., 2.5% of base salary. The amounts paid to Academic Program Directors ranged from about $2000 per week program to more than $10,000. In general, schools do pay a differential for international teaching.

Faculty Oversight

There are a variety of arrangements used for faculty oversight at our competitor schools. At some schools there is an Associate Dean for Executive Education that is a tenured faculty member and a committee that is made up of tenured faculty. At other schools, the Associate Dean is not a tenured faculty member and the reporting is directly to the Dean of the business school. 17

Appendix D

Market Research Information from Financial Times 200 Firms

MBA students in a Market Intelligence class conducted semi-structured interviews with 37 Human Resource heads for Financial Times 200 firms in early to mid April. They attempted to schedule an appointment with the firm’s Vice-President of Human Resources, or Vice-President of Education and Development or Chief Learning Officer. We promised a copy of a report summarizing the findings to all who shared insights.

Sample. All of the FT 100 largest firms were contacted and 28 agreed to be interviewed. The remainder refused or were unavailable in the time frame for data collection. Nine FT 101-200 firms were contacted when teams could not fulfill their quotas of firms from the original list. In some cases, the executive interviewed was second in command rather than the highest officer with responsibility for decisions about executive education. Two Japanese students interviewed HR heads of Japanese firms not included in the FT 200. These interviews are occasionally referenced below to give some insight about the Asian market given that our sample had no other Asian firms.

The firms interviewed were:

Firm Name FT Rank Firm Name FT Rank Merck 5 Hewlett-Packard 50 Pfizer 6 Ameritech 55 Wal-Mart 9 Bank America / Nationsbank 57 IBM 10 PepsiCo 64 Johnson & Johnson 14 Citgroup 67 Glaxo Wellcome 15 McDonalds 72 Bristol-Myers Squibb 16 Allstate 84 Cisco Systems* 19 Diageao, PLC 85 Eli Lilly 23 Sprint 98 AIG American International Group 29 Xerox* 118 SBC Communications* 30 Medtronic 126 Schering-Plough 32 MediaOne Group 127 Bell Atlantic 33 Campbell's Soup Co 156 BellSouth 35 Safeway 159 Abbott Laboratories 40 Banco Bilbao Vizcaya 166 Mobil / Exxon 45 Financial Fleet 170 Home Depot 47 Southern Company 175 Ford Motor Company 48 The Gap 176 Chevron 49 Sumitomo Life Insurance Company unranked Esai Co., Ltd. unranked

The achieved sample of interviews cannot be considered to be random, and the sample size is relatively small. This should be considered to be exploratory research, useful for generating hypotheses and qualitative insights, but no significance should be attached to percentages. 18

Questions asked. For each completed interview, the students used the following interviewing outline and took phone notes for later summarization. The following questions were asked.

1. How does your firm spend its employee development funds now? How will that change over the next 5 years? (The interviewer described 4 categories from the Harvard report, open v. closed enrollment x broad v. focussed content.) Why will these changes occur? 2. Who are the providers you look at, including corporate universities, consulting firms, and university-based programs? 3. What evaluative criteria do you use to decide whether and how to use these different sources? 4. Just considering the university-based piece of your firm’s overall executive development market, where are its relative strengths and weaknesses? 5. How does executive education relate to your firm’s overall knowledge management and employee development strategy?

The following pages summarize responses by question, adding my interpretation of the implications for Fuqua’s executive education offerings.

Three firms asked that they not be mentioned or quoted by name or by firm in the final report. (Cisco asked that they not be mentioned; SBC asked that we not mention types of exec ed they are not using, and Xerox requested prior approval of quotations and citations. I have included these firms’ comments in the present report, but will prepare a sanitized report excluding mention of these firms for external distribution. PLEASE TREAT THE PRESENT REPORT AS ENTIRELY CONFIDENTIAL, TO BE USED ONLY BY MEMBERS OF THIS COMMITTEE. 19

How does your firm spend its employee development funds now? How will that change over the next 5 years? Why?

1. Focussed, Open 2. Focussed, Closed 3. Broad, Open 4. Broad, Closed

Change themes:

a. More custom (Safeway, Southern Company), mostly in-house (Merck sales force, Wal-Mart, AIG, Ford, Chevron, HP, Allstate, Diageao, Sprint?, Cambpell’s Soup, The Gap) b. Consolidating # vendors (Schering Plough, Glaxo?, Johnson & Johnson) c. Outsource to consulting firms (AIG, Mobil, Campbell’s Soup) d. Multilingual (AIG) or global (Ford, Xerox). Banco Bilbao Vizcaya has flip side to AIG. Now ready to do more in English. e. Web-based or CD-ROM (IBM, AIG, Bristol-Myers Squibb, HP “off the shelf”, Bank America/Nationsbank, Allstate, Sprint, Xerox) f. Just in time v. just in case training (IBM, Xerox) g. More spent on top execs (Pfizer, Wal-Mart, Cisco, Abbott) h. Individualized training or coaching v. corp change initiative (Lilly, Glaxo, Mobil coaching; Shering-Plough, Abbott Labs) i. Mergers & acquisitions (SBC/Ameritech, Mobil/Exxon, BankAmerica/Nationsbank, Fleet Financial/Bank Boston. Those being acquired have little interest now). Other organizational problem-solving (Safeway) j. Leadership (v. managing?) (Pfizer, Abbott, McDonalds, Xerox) (Merck, Cisco, J&J, Home Depot established) k. No major changes anticipated (Merck, Bell Atlantic, BellSouth, PepsiCo, Citigroup, Medtronic)

Summary and Interpretation

1. Exec education shifting to in-house corporate universities (item a). The results here show a heavy movement away from open enrollment, with companies moving more and more work in house to corporate universities (item a). They sometimes work with consulting firms or with individual professors to design curricula that are delivered on site (item c).

Part of the motivation for this is the “just in time v. just in case” issue that Wanda discussed in our last meeting (item f). Summary points 2 and 3 below represent two very different but important forms of “just in time” that tie to different potential markets for Fuqua’s services.

2. Distance education (item h). Education based on Internet, intranet, and cd-rom technologies is growing strongly (see item e). This frees the exec from time out of office and allows time shifting. It also serves to communicate a unified content to 20

large, globally distributed organizations. I see strong opportunity for us to design materials that are semi-customized to the organization that might be delivered by their trainers. This seems highly consistent with our GEMBA reputation and expertise, and with the Pensare model.

3. Individual executive coaching. The second clear trend is more money spent on individual executive coaching and assessment. This function is being performed primarily by consultants and, to a lesser extent, by corporate trainers. Reasons given are the greater time-flexibility of consultants in comparison with university types. Blair’s idea of a new form of executive education in which Fleet Financial hires Vish for 2 years seems viable and consistent with this trend.

4. Open enrollment or repeatable “semi-custom” programs. There was relatively little encouragement for new, open enrollment initiatives by Fuqua. Two exceptions stood out.

 Closed programs surrounding mergers and acquisitions (item I). It appears that firms about to be acquired spend little on executive education but that a merger or acquisition creates a need a program of the sort we discussed. This was by far the most repeatable form of “organizational problem solving” program mentioned.

 Leadership (item j) I frankly am fuzzy about exactly what content is implied here, but firms seem to see this issue of creating leaders to be pivotal. Interviewees distinguished “leadership” from “management.” 21

Who are the providers you look at, including corporate universities, consulting firms, and university-based programs?

Twenty-eight of the firms interviewed cited use of corporate universities. These are not listed here. Responses below show consulting firms and Universities used.

Consulting firms were often cited as being used without mention of specific firms. Firms cited were: a. American Management Association (Merck, Glaxo) b. Anderson (Mobil, Banco Bilboa Vizcaya) c. Center for Creative Leadership (Glaxo, Bell Atlantic, Xerox) d. Ernst & Young (Banco Bilboa Vizcaya) e. Forum Corporation (Shering-Plough) f. Franklin Covey (McDonalds, Xerox) g. Hay-McBur (IBM) h. Linkage (Shering-Plough) i. Mercer (IBM) j. OMICRON (Home Depot) k. PASCAL (Diageo PLC) l. Peter Ketzenbaum (Xerox) m. PricewaterhouseCoopers LLP (Banco Bilboa Vizcaya) n. Prichett & Associates (McDonalds) o. Senior Manager Interchange (Bell Atlantic) p. Syn Delany (McDonalds) q. Wilson Learning (Xerox) r. WJM Gallup (Mobil) s. Zinger/Miller (Campbell’s Soup) Universities. The listings below do not distinguish use of

universities for custom v. open enrollment programs.

a. Arkansas (Walmart) b. Babson (IBM, Home Depot, Hewlett-Packard) c. Berkeley (Cisco) d. Columbia (Chevron) e. Cornell (hotel/restaurant management? McDonalds) f. Darden (Bell Atlantic, Mobil, Chevron, Hewlett Packard, Southern Company) g. Dartmouth (Chevron) h. Emory (Southern Company) i. Escuela de Negocios (Madrid) ( Banco Bilboa Vizcaya) j. Fuqua (Lilly, Mobil, Ford, Sprint) k. Harvard (Pfizer, IBM, Lilly, McDonalds, Sprint, Fleet Financial, The Gap, Southern Company – also use Kennedy School for negotiation) 22

l. Kansas, Kansas State, Missouri (Sprint) m. Illinois-Chicago (Allstate n. IMD (Banco Bilboa Vizcaya, Southern Company) o. INSEAD (Banco Bilboa Vizcaya) p. Insituto de Empresas (Madrid) (Banco Bilboa Vizcaya) q. IS (Madrid & Barcelona) (Banco Bilboa Vizcaya) r. Kellogg (Mobil, Chevron, Sprint, MediaOne) s. London Business School (Banco Bilboa Vizcaya) t. Michigan (Lilly, Hewlett-Packard, Ameritech, McDonalds, The Gap) u. MIT (Fleet Financial) v. Nomura Management School (Sumitomo Life Insurance, not FT 200) w. Southern Cal (MediaOne, Safeway) x. Stanford (Cisco, Hewlett-Packard, Southern Company, The Gap) y. Thunderbird (Lilly) z. Wharton (Merck, IBM, Bell Atlantic, Mobil, Sprint

Though consultants are heavily used for curriculum design and delivery, few were cited by more than one firm. This appears to be a fragmented market. There is slightly more concentration in the use of University programs, but I was surprised by the range of schools used. In some cases, this is clearly a matter of geographic proximity (see, e.g., Sprint or Allstate or Banco Bilboa Vizcaya, all of whom used programs not cited by any other company). Among the more prestigious players, there were few surprises. Harvard, (8 firms), Michigan (5), Darden (5), Kellogg (4), Fuqua (4), and Stanford (4) received multiple mentions. Babson was mentioned 3 times too. The other surprise for me in the answers here was the number of firms expressing very low esteem for the usefulness of university-based executive education. 23

What evaluative criteria do you use to decide whether and how to use these different sources? Consultants Universities

(In)Ability to do internally Wal-Mart, Ford Ability to tailor to Pfizer, Wal-Mart, Cisco, Home Depot, firm/partnership Merck, AIG, Campbell's Sprint Ability to tailor to Chevron, Ameritech, McDonalds, individual Mobil Southern Co. Application / action Cisco, Bellsouth, Ameritech, Shering Plough, Bellsouth, Ameritech, learning PepsiCo Allstate, Sumitomo Life

Campus setting Pfizer Wal-Mart, Lilly, SBC, SP, Sprint, Esai Cost Shering Plough, Mobil Ltd., Sumitomo Merck, IBM, Johnson & Johnson, Glaxo, H-P, Diageao PLC, Safeway, Expertise in content area Campbells, Safeway Banco Bilboa Vizcaya, Southern Co. (First-hand) Knowledge Merck, AIG, Bellsouth, PepsiCo, of industry Citigroup, Campbells Home Depot

Facilities Hewlett-Packard

Language of Instruction Banco Bilboa Vizcaya, Sumitomo

Measurable results Wal-Mart Mix with other top firms' execs Abbott, Southern Program content (fit, IBM, Johnson & Johnson, SBC, quality) MediaOne SBC, Abbott, MediaOne

Realistic case studies Pfizer Merck, Pfizer, SBC, Bell Atlantic, Abbott, Reputation Ameritech, MediaOne, The Gap Home Depot, H-P, Ameritech, Sprint,

Strategy IBM

Teaching ability Cisco, AIG, Medtronic Cisco, Medtronic

Theory Diageo PLC Timing of program (date, length) SBC, BellSouth, Sprint, Xerox, Esai

Time flexibility Mobil Merck, IBM, McDonalds, Campbell's, Pfizer, Lilly, SBC, Ford, H-P, Ameritech, Track record, references Safeway McDonalds, Medtronic, Safeway Merck, Cisco, Banco Bilboa Vizcaya, (Low) Travel Fleet Financial, Esai, Sumitomo Transfer to execs not attending Shering Plough

Web-based learning Cisco, Xerox Cisco, Xerox 24

The primary criteria used to decide whether and how to use consultants are knowledge of the industry (6), expertise in the content area (5), and track record or references (5). (Number of mentions in parentheses.) Some companies expressed a preference to be taught by those who have done it themselves rather than those who have studied the topic being taught. Consultants’ curricula are seen as strong in application or “action learning” (4), and they are sometimes mentioned as superior teachers (3) and skilled in tailoring to the firm (3).

Reputation. The primary criteria used to decide whether and how to use university-based programs are track record (with the company) and references (9), and the business school’s overall reputation (8). In addition to overall reputation, the business schools expertise in the content area of the program matters (6). I took this to indicate some potential for the discipline-based type of program we discussed (e.g., a finance program for First Union)

Cost. Cost is an important consideration . There are three elements here: program cost (7), the cost of travel to attend (6) , and the time out of office when important business is going on back at the office (5). There was a strong preference by some firms for programs no longer than 2 weeks; 1 week is better. As noted earlier in the analysis of question 1, this cost consiousness seems to create opportunities for Pensare-type content design to be sold through corporate universities.

Tailoring. The university program content criteria most often mentioned as selection criteria were ability to tailor to the firm and become a true partner (5) and to deliver an applied curriculum via action learning (5).

There is an interesting duality in what “tailoring” means in executive education. Fuqua made its mark in “tailored” exec ed, recognizing that the needs of firms differed. That kind of tailoring is still valued. But just as firms need different training, individual executives in a firm also differ in their needs. As was mentioned in the summary of answers to question 1, there is a trend toward very individualized training to fit the specific needs of single executive. Firms are responding to this need in a variety of ways – e.g., by changing an executives job assignment to acquire some needed skill. Open enrollment exec fits here; the interviewees can get out the Brickers’s guide and find a program that is a close match to the executive’s need. Finally, the “coaching” approach noted in question 1 is another way to respond to the demand for executive-specific tailoring. 25

Just considering the university-based piece of your firm’s overall executive development market, where are its relative strengths and weaknesses?

Strengths Ability to tailor Johnson & Johnson, Sprint Wal-Mart, Johnson & Johnson, Glaxo, Bristol-Myers Squibb, Academic research expertise Lilly, Schering Plough, Mobil, McDonalds, Sprint Merck, Wal-Mart, Glaxo, Cisco, SBC, Ford, McDonalds, Broad (cross-industry) perspective Medtronic Consulting experience / industry Cisco, Home Depot, Lilly, Bellsouth, MediaOne, Safeway Course materials good Chevron, Allstate Depth of functional knowledge SBC, H-P, Sprint, Safeway Distractions (few) Merck, Ford, Ameritech General management soup to nuts H-P, Sprint, Medtronic, Safeway Merck, Bristol-Myers Squibb, Bell Atlantic, Bellsouth, Mobil, Chevron, H-P, Ameritech, Allstate, Sprint, Fleet Financial, Interact with other company execs Southern Co., The Gap, Eisai Leadership training SBC No foot-in-door cross-selling attempts McDonalds Glaxo, Bristol-Myers Squibb, Schering Plough, McDonalds, Novel approaches, up-to-date Sprint, Medtronic, Eisai Teaching ability, methods Wal-Mart, Chevron, Ameritech, Esai Value for money SBC None American International Group, Citigroup, Diageao PLC

Weaknesses Academic, too theoretical Glaxo ,Cisco, Bellsouth, Allstate, Sprint, Safeway, Esai Contract difficult, ownership of material Glaxo Cost Wal-Mart, Glaxo, Schering Plough, Eisai, Sumitomo Credibility (no P&L responsibility) Wal-Mart, Citigroup, Sprint Faculty arrogant, take feedback poorly Glaxo, HP Faculty spread too thin, need watching Glaxo Generalists, lack of specialization AIG, Sumitomo Global diversity of faculty Ford Inconsistent (v. in-house) IBM Industry/company knowledge Bristol-Myers Squibb, AIG, Home Depot, PepsiCo, McDonalds Inner leadership, values, self-assessment Pfizer Interactive virtual learning environment Citigroup Knowledge management, learning org Xerox Measurability of results Mobil, Sumitomo Networking (may lose exec) Ameritech Organizational communication (lone ranger in open enroll?) Bristol-Myers Squibb, Chevron, McDonalds Program design headaches Banco Bilboa Vizcaya Secrecy concerns (open enroll) Southern Company Bristol-Myers Squibb, Cisco, Mobil, Home Depot, Ford, Tailoring insufficient / too broad Ameritech, PepsiCo, McDonalds, Sprint, The Gap Tailoring too slow for half-life of problem Citigroup Teaching style (talk at v. engaging) Glaxo Timing inflexible or too great Diageo PLC, Eisai

Strengths. The most frequently mentioned strength of university-based executive education is the opportunity to interact with executives in other industries (14). University-based programs afford a broad, cross-industry perspective (8). The academic research expertise brought to bear by faculty is valued (9). Because the instructors study multiple industries and interact with executives from a cross-section of industries, they are uniquely positioned to track and teach best practices. Their materials and instructional approaches are seen as cutting edge (7). This is particularly true if the instructors have significant consulting experience and knowledge of the industry of the company paying for a custom program (6). University instructors are credited with having deep functional knowledge (4). As teaching professionals, they are seen as better teachers than are consultants (4). Because universities can assemble talent from across their own faculties and can bring in hired guns, university programs score high on breadth of general management training (4), especially valuable for executives who have background in one area of business but not others.

My interpretation is that the trend to bring executive education in-house to corporate universities will sacrifice some of the key benefits of university-based exec ed noted above. If we evolve to be suppliers of content for corporate trainers, we may have less feedback from executives in the organization and less exposure to best practices. This says to me that we need to maintain our open enrollment programs as part of our product mix.

Weaknesses. The same qualities that create the most cited strengths of university based programs engender their greatest weaknesses. Their broad, cross-industry perspective makes it more likely that some material will seem of little relevance to the executive’s own job situation. Even in a custom program, the instructors are unlikely to be industry specialists (5), and they lack the kind of knowledge about corporate culture possessed by those who teach in corporate university programs. Consequently, the single most cited weakness of university programs is that they are seen as insufficiently tailored and too broad (10). The academic research expertise praised as University programs greatest strengths can become a significant negative when material becomes too theoretical without evident application (7). Some of those interviewed perceived university instructors as having less credibility than consultants or outside executives who had P&L responsibility (3). Finally, university programs were cited as costly compared to consultants or corporate universities.

How does executive education relate to your firm’s overall knowledge management and employee development strategy?

Knowledge Management Internet / intranet to decentralize Wal-Mart, Ameritech, Xerox Leading by teaching Pfizer, IBM Leveraging technology Wal-Mart, Cisco, AIG, Abbott Labs, Xerox Organizational learning IBM, Cisco, Sprint Organizational problem-solving Glaxo, Bellsouth Sharing best practices Wal-Mart, Abbott Labs, Citigroup, Sprint IBM, Bristol-Myers Squibb, Schering Plough, Bellsouth, Abbot Labs, Share goals & values BankAmerica/Nationsbank, Medtronic, The Gap Small piece Chevron, Ameritiech No knowledge man. Strategy H-P, Campbells Soup

Employee Development Glaxo, Lilly, SBC, Bellsouth, Ford, Ameritech, PepsiCo, Xerox, Medtronic, Campbells Soup, Assess gaps, acquire skills Safeway Develop cross-functional leaders faster Mobil, McDonalds Leadership skills Lilly, BellSouth, Ford, Allstate, Xerox Need to track effectiveness Bell Atlantic Reduces turnover MediaOne Update skills Southern Co.

Summary and Interpretation. Executive education fits into employee development via internal methods for assessing an executive’s current level of skills in comparison with skills needed in that organization (10). Though those skills can be acquired by multiple means (e.g., job rotation), executive education allows faster development of well-rounded executives with general management skills (2), particularly leadership skills (5).

Executive education fits into knowledge management as an important mechanism for sharing and disseminating corporate goals, values, and strategies (8), sharing best practices (5), or by serving as a forum for organizational problem solving (2). A significant challenge with traditional open enrollment executive education is how to disseminate the knowledge to others who did not attend. Some firms charge those who attend a program with becoming teachers of others upon their return (2) or organizing conferences. Others are working on ways to leverage technology to catalog organizational learning (3) and to share learnings via the Internet or Intranets to people in a decentralized global workplace (5). This will pose significant issues of intellectual property rights for us, both in traditional, Fuqua-based exec ed programs and in GEMBA/Pensare type programs that we are considering.