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School's Out?
The importance of developing and employing strategic business and HR practices has been underscored by the current economic tailspin. Forced to pinch pennies in such a dismal economy, however, has apparently resulted in companies forgoing costly, intensive executive-education programs offered by business schools. Given the current economic conditions, such a decision is only natural, says Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania's Wharton School. There are essentially two types of executive-education programs, Cappelli says. "One type is focused on particular company problems," he says, citing, as an example, Wharton's sending marketing executives to sessions designed to help the school improve its marketing efforts. Other programs are geared more toward personal development and learning or sharpening individual skills, he says. "It's the latter that is really down [in terms of enrollment]," Cappelli says. "Companies always cut back on training in downturns because they focus on short-term performance concerns." Companies are more closely managing all costs in an attempt to weather the current economic storm, and executive education is one of the variable costs that can be managed, says Dave Ulrich, professor of business at the Ross School of Business at the University of Michigan. According to a recent article in the Wall StreetJournal, some business schools are reporting declines of 15 percent or more in executive-education revenues. Hoping to counteract that trend is Chancellor University of Ohio, which announced on June 22 that it would join forces with former General Electric CEO Jack Welch to launch a management program offering two accredited, graduate-level degree programs, a Master of Business Administration and a Master of Management degree. The Jack Welch Management Institute at Chancellor University was created to provide "students around the world and at every career level the tools to transform their lives and the organizations of the future," according to the Cleveland-based university. Designed to "introduce a progressive approach to business education," the curriculum will blend traditional coursework with topics such as strategy, marketing and finance with Welch's "teachings on every aspect of business practice." "Neutron Jack," named Fortune's "Manager of the Century" in 1999, remains a leading voice on management issues eight years after stepping down from the top post at GE. And his focus has always included an emphasis on human resources. Headed by Noel Tichy, who led GE's Leadership Development Center in Crotonville, N.Y., the institute will also focus on Welch's "core principles of candor, differentiation, and voice and dignity for all -- as well as his extensive commentary on authentic leadership and people-driven management." HR executives, of course, are among those affected by the downturn in executive education outside the organization -- and their skills and competencies may suffer as a result, says Cappelli. "What exec ed programs are particularly good at is changing perspectives; persuading people of the 'bigger picture' need for change ... and then giving them frameworks for making change," he says. "They tend not to be training programs in the sense of teaching skills. So that's what [HR leaders] miss." There may not be an immediate effect on HR executives, but the impact of less executive education will likely be felt further down the road, says Ulrich. "Over time, lack of maintenance leads to erosion of adaptability and competence," he says. "Missing a week of exercise does not immediately lead to loss of physical stamina, but if the inactivity continues or becomes a pattern, fitness erodes. [The same is true of] investment in training. If not improving, leadership competence stalls, then falls behind." Many companies haven't picked up the slack either, in terms of providing HR executives with other avenues for professional development, adds Cappelli. "There was some effort to restart internal development programs before the financial meltdown," he says, "but most of that is on hold. And there was a lot more talk about development than [there was] action." The recent WSJ article offers some contrary thoughts. While agreeing that executive education at business schools is decreasing, the article suggests that more companies are doing training in-house and/or outsourcing executive development to private firms. Tim Bray, vice president and chief learning officer of Quintiles Transnational Corp., a Durham, N.C. pharmaceutical services company, told the Journal he has "shied away from sending employees to broader business-school courses," as the organization's executive focus shifts to specific company problems and the economic climate. "They see our balance sheet," Bray said of Quintiles' leadership. "They don't [need to] go to Wharton and see a balance sheet." Well before the current economic downturn, the company hired Forum Corp., a talent-management firm with nine global locations, to customize management courses for leaders in emerging markets like Hungary and Indonesia, he told the WSJ. The expenses associated with developing such courses are at least 30 percent lower with a private firm than if Quintiles had gone with a business school. When circumstances don't allow outside training, HR professionals must take the initiative to develop on their own, says Ulrich, who is also co-founder and partner with the RBL Group, a Provo, Utah-based consulting firm. "HR [professionals] can develop by coaching," he says, and can "also learn by doing; [when] they have new assignments, projects or challenges. They also learn by sharing and joining cohort groups where they can learn by observing and discussing with others." Some may view decreased participation in "traditional" executive education programs as a lack of commitment to developing people, but tough economic times can offer the organization an opportunity to re-evaluate and ultimately strengthen its executive-education efforts, he says. "Business realities require tough decisions," says Ulrich. "When executive programs focus on solving today's business problems, they are less likely to be cut. "The best programs are those that offer innovative solutions to business problems and merge theory, research and action," he continues. "Sometimes pruning can be a good thing to help plants grow, and the same may be partially true in [regard to] sifting investments in executive education." When funds for continuing education are limited or unavailable, HR leaders must find ways to ensure that high-potential employees still get the preparation they need to become leaders in the organization, Ulrich says. Much of that preparation may take place on the job, and may come in a variety of forms, such as (perhaps limited) formal training, coaching, technology-based training, job assignments, life experience, peer development and personal learning agendas, he says. Ultimately, the most talented employees will find ways to get the education they need, through avenues such as job experience, self-studies and communities of practice, says Ulrich. The managers and HR professionals charged with shaping these future leaders "need to find ways to invest in training, coaching, projects, assignments, personal training, work and non-work experiences to help people grow," he says. "The line between formal training and day-to-day job work is blurring."
July 15, 2009 Copyright 2009© LRP Publications |
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