Targeted learning
Businesses look to customized executive education programs for a competitive edge

by Heather B. Hayes
for Virginia Business
July 2005

Executive education had long been a concern to Mitch Haddon, president and CEO of ColonialWebb Contractors, a Richmond-based construction firm, but he usually relied on an informal approach. On occasion, he would send managers to a class at a nearby business school to fine-tune communication skills or update their understanding of contracting techniques. But, he explains, “It was always more tactical, task-oriented training.”

Last fall, however, Haddon suddenly decided to send his entire staff of division managers through a structured, customized executive education program. The reason? The increasing difficulty he has in hiring senior executives. “You really can’t find people who are already skilled and experienced in leadership roles,” he says. “So now we’re trying to train into those positions.”

To ensure that the division managers would have access to relevant material, ColonialWebb nixed the idea of sending them through traditional open-enrollment classes. Instead, Haddon worked with the University of Richmond to create a customized leadership development program that included courses such as “Leading Organizational Change,” “Performance Management,” “Sales Account Management and Customer Focus” and “Developing Your Work Force: Teams, Empowerment and Delegation.”

The group of 13 participants went to class on campus two days a month for six months this spring at a cost of $4500 per person. Haddon expects this investment in his managers, who have almost full autonomy over their business units, to ultimately pay off with improved revenues and profits. “We’re getting an MBA-level of intensity but on our own time schedule,” he says. “So it’s really helping these individuals, who are already excellent contractors, to grow as business leaders and entrepreneurs, and when the need arises, we’ll be able to promote from within.”

ColonialWebb is not the only company finding competitive value in customized executive education programs. In fact, officials at business schools across the state report an explosion in demand for programs that cater to a company’s specific needs and schedule. The Darden School at the University of Virginia has seen its number of customized programs jump by 60 percent since last year, while the Management Institute at the University of Richmond’s Robins School of Business enjoyed a 31 percent increase during the same timeframe. Executive education officials at Virginia Commonwealth University and Old Dominion University are also reporting double digit increases in the number of businesses asking them to develop individualized coursework.

Driving the trend, notes Richard S. Coughlan, associate dean for graduate and executive programs at UR’s Robins School of Business, is a more competitive and complex business environment. He sees many companies like ColonialWebb rethinking long-held ideas on how to identify and prepare future leaders. “The traditional kind of experience of taking over after rising through a silo within an organization, like sales or operations, is no longer going to equip these individuals with the skills they need to actually lead the organization,” he says. “There are some leadership skills that you’re simply not going to attain by managing a large group of individuals. Being a senior executive today takes more strategic thinking, it takes more global thinking and it really takes an individual who can appreciate the interests of multiple stakeholders.”

Increasingly, companies are looking to their human capital as a competitive differentiator. They’re recognizing that skills such as communication, leadership, conflict resolution and strategic thinking “are just as important as technical skills,” says Sheila Powell, director of the Executive Development Center at ODU. “Companies have always recognized that they need these so-called soft skills, but now I think they see them as truly critical to business success.”

While open-enrollment classes can provide that type of education, many businesses are so lean in their operations that they don’t have the training dollars or the time for lengthy, one-size-fits-all curriculums. “Years ago, we used to spend the first few hours of a class encouraging everybody to get to know each other,” says Jan Allen, director of the Center for Corporate Education at Virginia Commonwealth University. “Not anymore. In fact, now we do all kinds of ‘pre-stuff,’ reading, research, journaling, anything you want people to do as part of the program, and send it ahead of time, so participants’ time in class is very specific to the material they’re studying.”

A customized program enables companies to attain economies of scale and, in effect, piggyback learning with productivity by focusing course material on challenges and situations specific to a company and its sector. “We’re not interested in studying how they do things at Coca Cola,” states Karen Pal, manager of the Business Leaders Program at the National Industries for the Blind, based in Alexandria. “We want to study our own business, and you can’t do that without a customized program.”

The nonprofit organization, which works to enhance employment opportunities for the blind, recently contracted with the Darden School to create a program that required participants to analyze five of their business units (referred to as agencies) and make recommendations for improvement. “Not only do they learn and participate in class just like any other Darden School class, but they’re learning for their own growth,” Pal explains. “And then they can immediately apply that knowledge to their special project agency. At the end of five weeks, they can take it up a notch further and go back to their own agencies and make the same contribution.”

For officials running executive education programs, the job of creating an effective, customized curriculum means a lot more work upfront. Officials and faculty at UR’s Management Institute, for example, spend dozens of hours doing research and meeting with company leaders to pinpoint business issues that need to be addressed in the classroom. That approach also means modifying programs to fit the unique and ever-changing requirements of various sectors. Leadership development courses, for example, might cover similar business topics but vary widely in the specifics.

A customized program developed for a manufacturing company, Coughlan says, will put more focus on Six Sigma principles, inventory controls and operations management, while a program for a services firm is likely to provide more instruction on allocation of resources, product development and customer relationships. “You have to be a lot more creative now and much more of a partner,” says Coughlan. “The way we see it, we’re providing companies with experts that can provide an external set of eyes to the issues facing the company and then work interactively with company leaders to find solutions that will help them reach their goals. And that really can’t be accomplished in a public offering or by sending a single individual off to executive education.”

Globalization and consolidation are other market factors driving some companies to executive education. Nowadays, the speed of mergers and acquisitions and the far-flung nature of international companies means that executives never get a chance to meet or share ideas and concerns. Executive education can provide that forum. In fact, the AES Corp., a global electric power distribution firm based in Arlington with operations in 27 countries, is using executive education as an opportunity to bring its leaders together and create a more cohesive organization.

AES officials asked the Darden School to create a series of programs for executives from different countries and different functions. “The courses are designed so that there’s a lot of interaction,” says Bob Morris, the company’s director of talent management. “That in turn provides a lot of opportunity for people to get to know one another, so we might have a person in Ukraine finding out what the business problems are in Brazil. That’s very worthwhile to us, and it goes a long way towards helping us begin to create more of a common culture across our operation.”

Despite the popularity of custom curriculums, open-enrollment courses are still in demand. Tom Cross, senior director of executive education at the Darden School, says he’s seeing an increase in regularly scheduled courses, noting that the classes are invaluable to companies that don’t want — or can’t afford — to send more than one manager at a time. The classes also provide a place for like-minded leaders in different companies or industries to get together, share experiences and learn best practices from each other.

But customization is clearly the hot trend of the moment, Cross acknowledges, and the key to success is partnership. “There needs to be a close collaboration between the company and the school, so that the two are acting as a team in the free sharing of information and bringing together the best thinking and the best resources. If that’s done, and it’s done right, then it can definitely result in better performance for the company.”