Evolving with the times
- May 28, 2009
Two years ago, officials for the Management and Professional Development (MPD) program at Virginia Tech’s Pamplin College of Business spent most of their time catering to the needs of 10 large corporate clients. As the recession has taken hold, however, these clients have reduced their demand for executive education instruction.
One client, a major distributor of building and plumbing supplies, has taken its training in-house to save money. Others are contracting for fewer sessions of customized coursework.
As a result, program officials have had to take steps to make up the shortfall. “We have taken on some smaller projects that we would not normally have taken,” says Sharon Scott, associate director for MPD, noting that the program now has 25 clients.
Many of these new clients want targeted training in business strategy and compliance issues. “Organizations are looking at every expense and trying to examine the return on investment…and training and development is no exception,” Scott says.
Virginia Tech is not alone. According to Training Magazine’s 2008 Industry Report, about 9.5 percent, or $5.3 billion, of all training and development dollars was spent on executive education in 2008. That’s a decrease from 2007, when organizations spent $5.9 billion on executive education and well off the 2003 high of $7.1 billion.
All indications are that those figures will drop again this year. Executive education officials in Virginia say that the willingness by corporations to pay for traditional custom coursework is receding.
Many programs are able to offset some of those losses with the increase in open enrollment courses. All schools, however, are trying to offer more specific, real-world content that can help companies target needs, improve profitability and realize immediate results.
“Companies are coming to us with very, very explicit requests and some of those courses tend to cut across the needs of a lot of industries, like change management, managerial accounting and people productivity,” says Roy Hinton, associate dean of executive programs at the George Mason University School of Management. He notes that many smaller firms are making this type of training affordable by forming consortiums with like-minded companies and then contracting for custom courses.
In addition, GMU recently designed a version of its executive MBA program that targets the defense sector, with more than half of the courses adapted to provide a defense industry context. The program will be offered for the first time this fall.
Other executive education programs are offering new content. The University of Richmond has new custom courses on managing in crisis, dealing with organizational change and developing resiliency in individuals and organizations. It also recently developed a program for CEOs of minority business enterprises in partnership with the Virginia Minority Supplier Development Council, Altria Group, Dominion Virginia Power and MeadWestvaco.
The Center for Corporate Education at Virginia Commonwealth University recently entered into long-term contracts to provide leadership development for area firms, but director Richard J. Chvala says that companies want very specific instruction in the areas of strategic thinking, initiative, accountability and change management.
“We can no longer rely on theory or general knowledge,” says Hinton. “It is essential to develop all the relevant distinctions and then talk about how managers can act on those distinctions as soon as they return to the office. This is going to require that faculty have even more experience in the business world and that executive education be more customer-driven than ever.”