FORWARD THINKING

Cheap, flexible and focused, executive education could be the key to your organisation’s long-term success

WORDS BY WIDGET FINN

DOES THE CREDIT CRUNCH MEAN A development crunch? In past recessions the corporate training budget has been the first candidate for cuts, but many organisations which make cuts later find that they lack the talent to take the business forward when the economy improves. New research by TMP Worldwide and TARGETjobs claims that companies who want to continue to attract and keep the best people should look to their development programmes, with 43% of recent graduates saying that unless their employer invested in their career development they would move on as soon as the economy picks up.

Wise organisations know that they need to be growing their talent now so that they are ready for the upturn in business when it comes, but they’re still looking at how to get more bang for their bucks. “Budgets are more focused, so providers have to find better value for money and be more inventive” says Colin Carnall, director of executive education at Cass Business School.

Carnall has seen it all before, and takes a long-term view. “This is the third recession in my 16 years in executive education, though it’s undoubtedly the most serious,” he says. “When executive education is hit during economic cutbacks everything is thrown in the air and always lands in a different shape. The winners are those companies which work to be more flexible in order to respond to the new shape.”

And more focused budgets doesn’t necessarily mean smaller budgets. It initially appeared that development budgets in the financial services sector would be hardest hit but, according to Carnall, “some banks are spending more. Looking to the future, they will need ways of motivating and rewarding people other than large bonuses, and development is part of the incentive package.”

Edinburgh-based Aegon UK, the financial services group, launched a talent management programme with the School of Management at Henley Business School two years ago. Nearly 1,000 staff have participated. Now there is less money available says Sandy Begbie, director of HR. “We’re targeting the best people and focusing our resources on them,” he explains. “We’re partnering psychometric testing consultants Saville & Holdsworth to send our most senior people through a development centre to assess their potential. The best will be sent on programmes to US business schools, and offered mentoring and coaching. Historically Aegon never put money into management education, but we now know that developing our top talent is vital to beat the recession.”

The MBA has traditionally been seen as the gold standard for developing high-fliers, but business schools are responding to this new desire for greater focus by offering customised development courses that are still holding their own against open programmes. But why partner with a business school? Begbie believes that an external perspective brings valuable insights to the business. “And schools have expertise in management development which can be put into practice back in the workplace.”

Some organisations, including Groupama Insurances, based in Paris, combine links with business schools with their own corporate university. Jeremy Webber, director of Groupama’s corporate university, explains: “Our development budget remains the same but we now do more with it, including designing all our own training. There’s still a place, though, for business school expertise and their certified standards. For example, we work with ESSEC on an advanced management programme in French, and will soon introduce it in English.”

Michel Fender, ESSEC’s director of executive education, confirms that companies want innovation in the way programmes are delivered. “To make them more cost-effective we’re balancing face-to-face delivery with remote and e-learning, and we’re using this to support long-term relationships with managers.”

Corporate universities are a valuable way of flagging up the fact that the organisation has a strong focus on developing its people, says Jorgen Thorsell, vice president of training provider Mannaz, based in Brussels and London. “Often the skills-based training is done locally, but the strategic development of tomorrow’s leaders has to be a regional or global activity. We find the most effective way to develop appropriate mindsets is to work in globally diverse groups which reflect the global conditions in an organisation.”

Thorsell argues that executive education has left the classroom. “In times of high turbulence and change models and theories are not enough. Corporates now focus on immediate impact and higher performance, wanting real life challenges in real time. For example once a month we sit with a group of eight leaders, helping them to address the issues that are urgent and relevant to them right now.”

Mannaz has recently worked with an international organisation that needed to introduce a new culture that was based on direct feedback throughout the business. “Top executives provided 360 degree feedback and this approach was cascaded down and shared at all levels. Because these activities were rolled out globally and each leader on the development programme was working on real time challenges, there was an immediate impact on moving the strategy forward effectively.”

The London Business School (LBS) is responding to new demands from clients by expanding the accessible, flexible, personalised approach to programmes. “There’s a move to shorter programmes,” says JoEllyn McLaren, director of executive education, “so we’re offering a range of programmes from one day to one month to help executives who can’t be away from the office for long.”

Dirk Tirez, company secretary of De Post NV, one of Belgium’s largest companies, attended the four-week Senior Executive Programme, “because in this economic crisis one needs to reflect on strategic innovation and agility. LBS also has shorter programmes that focus on specific issues on managing the downturn, which broadened my horizons and helped me to reflect on my organisation’s future.”

Rotterdam School of Management is also introducing shorter courses including its oneday Shoestring Series. “These are targeted cost-effective workshops that help clients do more with less,” says Josette de Goede, director of executive development. But is there a danger that short courses are too superficial to be useful? “Senior people know that they will only touch on the subject, but can then examine it in greater depth at another opportunity,” she says.

Flexible and cost-effective, executive education is proving that it is relevant to the most difficult financial conditions, and there’s plenty of anecdotal evidence to suggest that it makes good financial sense. “It’s difficult to put a financial measure on development,” says Sandy Begbie, “but Aegon recently made an internal appointment as the head of marketing. He was the best candidate and had been groomed for a year with coaching and mentoring. As a result we saved search fees of around €50,000.”

Clearly the credit crunch is encouraging leading organisations to think creatively about how to develop tomorrow’s leaders. Budgets are tight, but the organisations are proving that they can succeed if they get their priorities right. As one CEO put it: “Economise by switching off the lights and turning down the heating – but don’t stint on development.”

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