A steely nerve becomes a school's essential weapon
By Linda Anderson
Published: May 17 2004 8:18 | Last Updated: May 17 2004 8:18
Over the past few years business schools have suffered a series of blows.
Sars respiratory disease, September 11, visa restrictions in the US, the economic downturn and the consequent lack of recruitment opportunities in traditional MBA occupations such as banking and consultancy have all left business schools, especially those in the US, reeling.
Executive education - the bread and butter of business schools - has been one of the hardest hit. These short courses bring in much-needed finance for the schools, as well as allowing the development of new ideas and innovative practices that can later be incorporated into full-time degree programmes.
But while custom programmes - courses designed at the request of a specific company - are holding their heads above water, it is the open enrolment programmes that are suffering.
Running these programmes is costly and the leverage immense. Space and faculty time has to be reserved; if the school runs a three-day course that attracts 22 applicants, it has struck gold. But if the same course draws only 10 participants, the losses can be immense. Cancelling an unpopular programme annoys those clients who have already signed up for the programme and may well mean that they do not return.
Cancellations also irritate faculty who have lost teaching time, research opportunities and possibly additional revenue. Business schools do not possess crystal balls so how can they plan ahead and develop executive programmes when they do not know whether famine or feast is round the corner?
Ian Hardie, associate dean for executive education at laceName>LondonlaceName> laceName>BusinesslaceName> laceType>SchoollaceType>, accepts that there are no guarantees. One of the problems, he says, is that clients are leaving it far later before booking courses. "You have to hold your nerve," he comments wryly. However, by following certain steps he says: "It becomes more of an art than a science to make sure you have the right programmes at the right time.
"First," he says, "you must have a clear vision about your own school and its strengths and what you are good at and stand for and what types of programmes your school is good at.
"You must also have an eye on the future and be aware of what the pressing trends are."
Third, he adds, there must be an awareness of faculty research, which is an indicator of where demand will come from.
It is important, adds Mr Hardie, that your organisation is agile so that you are able to track those programmes that are working well and closely monitor those which are not performing.
"You must have a clear view of what your portfolio should look like, does the course make a contribution to the portfolio and is it strategically important?" His words ring true. Over the past few months executive portfolios in many schools have come under intense scrutiny.
Executive education
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Top open enrolment programme providers
Top 10 - Open programmes
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Top 50 custom providers
Top 10 - Custom programmes
Key to table
At Ashridge, dean Kai Peters' solution is radical - the worst performing open programmes are to be pruned, by an overall 20 per cent.
The school will also run fewer of the popular programmes, although Prof Peters says that should demand increase, more programmes can easily be run.
At Darden Graduate School of Business at the laceType>UniversitylaceType> of laceName>VirginialaceName>, one of the largest providers of executive education in the US, programmes are also being reviewed.
This year the school has run 35 unique open programmes, "which is a lot for us and kind of on the heavy side," says Brandt Allen, associate dean for executive education. Next year he says the school - taking into account market conditions - will offer fewer programmes.
"We want to focus resources on the programmes that will do well and cut back on the marginal programmes," says Prof Allen.
Business schools are finding that there is little rhyme or reason behind which courses remain popular and which are in the doldrums. While some short programmes and other complex and relatively long 10-day courses are still drawing crowds, others are failing to win fans.
"It is very puzzling," admits Prof Allen. "Some programmes just don't seem to catch the market."
Prof Peters concurs. "There seems to be no rule, but overall numbers [on open programmes] are down."
Like London Business School, and Darden, Ashridge is keeping a close eye on its portfolio, making sure that courses fit well into the entire programme, offering suites of programmes with open courses to complement custom programmes. In response to the market downturn, last autumn the University of Michigan Business School restructured its executive education: formerly aligned around traditional disciplines, the school's executive education is now based around centres of excellence such as an India centre, general management centre and lean enterprise centre.
"We needed a new strategy, needed new solutions. I think this new approach, having different centres and collaborating across centres offers much better solutions [for our clients"], says Ron Bendersky, director of programmes for executive education at the school.
While the school has always been client-focused. adds Mr Bendersky, it realised that it needed to be innovative and given market conditions the traditional approach was no longer appropriate.
Darden is also adopting a pro-active approach. Prof Allen is about to embark on a calling campaign. Over the next seven weeks he plans to contact 300 companies, talking to the people who place executives on open programmes. The school is also engaging a consultant who will review customer perception of the school.
Schools cannot afford to be complacent and although demand is beginning to return, they are having to work hard to woo customers. It would seem, to the disappointment of business schools, that there is no magic formula to second-guess the market when it comes to the success or failure of open enrolment programmes.
Being market-led, flexible and client-focused would appear to be the main tenets of success. And in today's rocky climate a steely nerve also comes in handy.
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