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Exec Ed: Not Just for High Potentials

(The spelling of Stephen Burnett has been corrected.)

Common wisdom says hungry, young high potentials are the best place to invest executive development dollars. But companies that want big results are increasingly seeing the wisdom of also investing in development of senior leadership, accelerating a general drive toward customization in executive education.

"Organizations must look very critically at what they are trying to accomplish," says Stephen Burnett, associate dean of executive education and professor of management and strategy at the Kellogg School of Management. He believes a mixed model of robust internal training and highly customized learning suitable for senior leaders—created in partnership with the company—produces the best results.

"More initiatives are being driven by the C-suite, with education being leveraged to achieve corporate goals," says Steve LaCivita, associate dean of executive education at the University of Chicago Booth School of Business. LaCivita cites an example in which Chicago Booth worked with the C-suite of a major European company, together with 200 managers, to learn how to live their corporate brand promise. "Without the participation of top leadership in this process, the desired organizational change wouldn't have happened," LaCivita says.

Of course, high potentials want career growth: They want to become industry leaders. And companies want to retain stars as they move toward the top. General Electric (GE) and Procter & Gamble (PG), for example, have reputations for being among the best corporate educators, but they are also known for sending well-trained executives to other companies. Being known as a good training ground may help attract top talent, but it is costly for the organization when talent leaves. Engaging top leaders in deep personal and organizational development programs may also be a way to help retain senior executives.

An Education Enterprise

There is a growing bias toward customization through internally delivered executive development as a means to ensure return on investment, or ROI, according to some industry leaders. "We've definitely stepped up our internal efforts at more formal learning related to our environment," says Michael Hamilton, Ernst & Young's chief learning and development officer for the Americas. "It's the only way we can keep up with the demands on our particular business." Ernst & Young now conducts approximately 4,000 formal classroom sessions annually in the Americas alone, in addition to customized mentoring and experiential learning, as part of its education enterprise, called EYU (Ernst & Young and You).

According to Hamilton, E&Y still maintains and values deep relationships with a constellation of top business schools around the world for the development of critical competencies among its senior leadership and access to the latest thinking that only research-based institutions can provide. "But they must understand our business and client needs and customize the learning accordingly," says Hamilton. "We won't take stuff off the shelf."

Based on conversations with corporate leaders from top global companies and leading business school professionals, here are key issues companies must consider as they develop leadership and executive development programs:

1. Acknowledge today's career duration.

Focusing only on the development of high-potential employees is a common strategic error, given the reality of longer careers. You can "teach an old dog new tricks," says Hamilton, but the type of learning needs to be highly customized, with a focus on deep introspection and specific corporate objectives to be relevant to senior leaders.

2. Think total organizational development.

Today's high-performance companies react to challenges on an enterprise-wide basis. This requires changing both mindsets and behaviors as well as developing skills across the board. Sending a few high-potential executives to programs to enhance their development does not achieve the larger objective.

3. Consider how people learn.

ROI is achieved by adopting a process orientation to executive development to accomplish what educators call applied learning, in which classroom learning is systematically linked to creating experiences for individuals specific to the company's objectives. This is supported by structured mentoring by top leadership designed to achieve well-defined and regularly visited personal development goals. This kind of learning does not happen through one-off educational approaches.

4. Look to your organization for curriculum.

Off-the-shelf approaches to executive development are not relevant for anyone but the most junior staff. The smart organization structures its executive development learning around deep strategic issues of direct relevance to the business at each level. If properly calibrated, the experience can be rich enough to foster personal growth among the most senior leadership while also producing the specific competencies that directly affect business performance throughout the organization.

5. Pick your outside partners carefully.

Make sure your selected partner, whether a consulting firm, business school, or specialized leadership-development enterprise, builds and delivers programs that fit the specific needs of your company.

"Flexibility and a willingness to step out of the classroom and deliver action and workplace-based learning [are] critical attribute[s] of state-of-the-art partners in management development," according to Roderick Millar, managing editor of IEDP, which monitors the executive education industry worldwide.

With customization and achieving attractive ROI now a mandate, the implications both for companies and the global providers of executive development services are significant. For example, the executive development needs of companies in emerging economies are distinctly different, and more basic, than in mature economies, where the emphasis may be on more abstract notions such as innovation.

Companies will require greater sophistication regarding the approaches they take to their management-development needs. Key knowledge partners, such as business schools, will also need to develop new and increasingly customized models to serve companies best in a global, knowledge-based economy. This presents both challenges and opportunities for companies and educators to redefine executive education for a new era.

Tim Westerbeck is an expert on brand marketing in the business school sector. He is president of Management Education Enterprises, a company dedicated to brand strategy, research, product development, and innovation in global management education.

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