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WHEN THE BEST B-SCHOOL IS NO B-SCHOOL

Although B-schools still control a large chunk of the executive education market, they don't have a monopoly on good ideas. Some of the newest approaches to executive education are coming from companies' in-house programs, which are on the rise. There are now 1,200 corporate ''universities,'' up from 400 in 1988, says Jeanne C. Meister, president of consultant Corporate University Xchange. And with CEOs and other top execs now taking a more active role, many fresh ideas are coming straight from the executive suite.

A case in point is Citibank's Team Challenge program, created in 1996 by CFO Victor J. Menezes as a way to develop promising leaders while solving some thorny internal issues. Now in its fourth session, the program invites several of Citi's best young managers to spend a month working in teams on real problems facing the bank. Chairman John S. Reed, Menezes, and other senior execs select the issues the groups are to puzzle over, and by month's end, each team proposes a course of action.

Denise Strain, a 44-year-old associate general tax counsel, was a member of the first Team Challenge. Her team's assignment was to determine whether it made sense for each of Citi's country and business units to maintain a separate treasury to manage its funds. After a few days of leadership training, the team was set free--with unlimited budgets--to find an answer. Strain traveled to London, Malaysia, and Indonesia in one week to interview Citi execs and experts at other companies, while her six teammates jetted elsewhere across the globe. When they reunited in New York, they compared notes and developed a controversial recommendation to centralize the treasuries. After an hour and a half of, in Strain's words, ''a real hard time'' from Reed and the other top execs, they accepted the proposal.

Strain, who describes the month as ''stressful, exhausting, and exhilarating,'' says it taught her to throw out old assumptions when looking at a problem. She also learned to think strategically about how her decisions affect the company. As for Citibank, it gained input on a nagging issue while letting high-potential execs develop new leadership and problem-solving skills. Plus, says Menezes, it was ''much cheaper than a management consultant.''

Although Menezes consulted a few outsiders in developing Team Challenge, the program is so Citi-specific that the bank never considered working with a B-school on it. ''These people are asked to work together for a month,'' says James L. Noel, Citibank's vice-president for executive development. ''It's extraordinarily difficult to duplicate in a university setting.''

INDIVIDUAL BREW. Citi is not the only one leaning more toward the homegrown. Some 22% of the companies BUSINESS WEEK surveyed say they prefer in-house training to university-based education. In part, that's because the university is coming to them. Roughly 11% of the surveyed companies say that they can still get top faculty by hiring them as consultants. ''There is no university that has all-stars in all disciplines,'' says Deepak Sethi, assistant director for exec ed at AT&T. Indeed, as exec education focuses increasingly on specific, bottom-line goals, more and more companies seem to be choosing an individual brew of B-schools, outside consultants, and inside projects.

That's the mix favored by Avon Products Inc. Although it occasionally sends individual execs to external programs to round out specific skills, Michael W. Michl, vice-president for human resources, says that as managers move up, they require such specific training in Avon's own practices that it would be pointless to go outside. ''If we just give them generic training,'' says Michl, ''they come back and say: 'That was very interesting, but I don't know how to implement it.'''

GLOBETROTTERS. One of Avon's in-house offerings, the Passport Program, was designed with that problem in mind. Targeted at those who Avon thinks could become general managers, the program brings a team together for six weeks spread over 18 months. In order to learn both Avon's global strategy and best practices of other units, they meet for each session in a different country. Participants are first given general background by outside faculty in subject areas such as marketing. Then the material is ''Avonized,'' says Michl, with 75% of it presented by senior Avon managers. ''The biggest new thing,'' says Noel M. Tichy, professor of organizational behavior at the University of Michigan and a consultant to in-house programs, ''is the degree to which we are getting the leaders themselves to do the teaching.''

On the Avon program, teams work with senior execs on a country project, such as entering a new market, to come up with a presentation for CEO James E. Preston. Ursula zur Hausen, president of Avon Germany, helped develop a strategy for the Polish market. ''We analyzed the figures and the economy and handled it as if it were our general management role,'' she says.

Some incoming CEOs have also seized upon specialized in-house exec ed as a way to communicate and spur change. In mid-1996, shortly after taking over Bankers Trust New York Corp. in the wake of a derivatives trading scandal, Chairman and CEO Frank N. Newman worked with Tichy and Evelyn Rodstein, director of human resources planning and development, to create a program for BT's top 200 execs, many of whom were bottom-line-focused bankers and traders. The point of the program, launched in March, is to show that success--and compensation--would now depend on management skills as much as financial performance.

Rodstein says the key to getting the participants to take the program seriously was real involvement--not lip service--from the top of the corporate pyramid. Members of BT's management committee teach, and Newman attends part of almost every session and follows up with a participant lunch. That's also why the top 200 execs are the first attendees. ''This way,'' she says, ''no one is saying my manager told me it wasn't important.'' Seems there's nothing like having your CEO play professor to insure that the lessons come through loud and clear.

By Jennifer Reingold, with Lori Bongiorno, in New York


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Updated Oct. 9, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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