Financial TimesVirtual classrooms democratise executive education

February 15, 20210
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As universities closed their classrooms and companies adjusted to the disruption of the coronavirus pandemic last year, PepsiCo’s chief learning officer, Molly Nagler, had to scrap plans to send executives to programmes at Wharton School and Yale School of Management.

But rather than dismiss executive education as impractical, unaffordable or unjustifiable during a crisis, Nagler doubled down and negotiated online alternatives for the US-based food and drinks group.

“We tend to use the in-person, campus-based programme for executives to create a differentiated experience and expose them to cutting-edge thinking and research,” she says. “We’ll still use the campus for elite experiences but less than before because of the expense and the challenge to get everyone in one place.”

Like many of her counterparts in companies around the world, Nagler is not cutting back on her training budget. Instead, she is reconsidering who should learn, what they should study and how best to train them — and reviewing her choice of external programmes.

Coronavirus imposed a sharp shock on business schools’ non-degree “open” courses for managers and bespoke “custom” offerings for corporate clients. While demand for qualifications such as the MBA has held up well, the global university-based executive education market, worth close to $2bn in 2019, fell by a third in 2020.

François Ortalo-Magné, dean of London Business School, says its executive programmes generated £50m a year before Covid-19, but that amount has since halved. “The pandemic has not been easy,” he says.

Michael Malefakis, head of executive programmes at Wharton, agrees it has been a very challenging time: “We’ve pushed ourselves and the market has pushed us far from our former comfort zone. It’s made us rethink how we structure and deliver education in a way that has not been as radical since world war two.”

The good news for education providers is that appetite remains strong. Mark Roberts, associate dean of executive education at Insead, draws a contrast with the 2008 financial crisis, when training programmes were seen as “something you switch off as an expense in a knee-jerk way”. He adds: “We haven’t seen that this time. Something fundamental has shifted strategically.”

Nuno Gonçalves of Mars sees demand for the ‘soft skills’ that foster leadership traits such as empathy
Nuno Gonçalves of Mars sees demand for the ‘soft skills’ that foster leadership traits such as empathy

Likewise, Nuno Gonçalves, chief learning and development officer at Mars, has not seen his budget drop. “Every strategic paper I see talks about ‘people capabilities’, about what we need tomorrow,” he says. “If we want to be successful, we need to have these capabilities.” Alongside “hard skills” focused on digital transformation and analytics, Gonçalves sees demand for the “soft skills” that foster leadership traits such as empathy — and how to balance them with the continuing need for commercial success.

Josh Bersin, a US corporate learning consultant, agrees that coronavirus has focused companies on “people issues” and away from management philosophies. “It’s about human-centred leadership which is more caring,” he says. Tied to this is diversity and inclusion, subjects that are “on employees’ minds, reporters’ minds, those of rankings, with customers deciding not to buy products from companies that are not being fair. We have found diversity has barely been addressed, and if anything we’ve been backsliding.”

Alongside the acquisition of specific skills, training programmes provide a break from the relentless pressures of day-to-day work in lockdown. “Companies are looking for meaningful engagements for employees that are not just about work or a Zoom party,” says Ortalo-Magné of London Business School. “We have offered time for participants to chat with our faculty to bring them meaning as well as learning.”

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Matt Confer, a vice-president at Abilitie, a company which offers training such as business simulations, says many clients are interested in training because it helps with staff retention and enthusiasm. “People have been at home more than any of us wanted or expected and we’re getting burnt out,” he says.

MBA students: while expensive on-campus programmes were typically limited to a small group of senior executives, online learning can offer a wider range of training more cheaply and efficiently
MBA students: while expensive on-campus programmes were typically limited to a small group of senior executives, online learning can offer a wider range of training more cheaply and efficiently

Established in 2015, Abilitie — which now offers a mini online MBA — reported its best two financial quarters in the second half of last year.

While face-to-face meetings can create a rich learning experience not always replicable online, digital seminars, courses and events make it easier to attract both high-profile external speakers, such as busy chief executives, and clients who struggle to take time off for full-time study. Technology has also created less intimidating means for participants who are shy to speak out.

Digitisation raises a broader issue for corporate learning officers about the “democratisation” of training. While expensive on-campus programmes were typically limited to a small group of senior executives, online learning can offer a wider range of training more cheaply and efficiently to a far larger number of staff at different levels in an organisation.

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Erin Clark, practice leader for leadership development and learning at professional services firm Deloitte, says: “It’s about leadership at all levels — something that can no longer be reserved for the select few. Investment in developing leaders was disproportionately anchored in hierarchy. Virtual learning offers the opportunity to be widely available.”

The demand for online training is intensifying the competition between business schools and alternative providers of executive education — companies which may have less academic heritage but which can be more nimble. Deloitte, like other consultancies, recruiters and specialist firms, as well as online educators from Abilitie to Coursera, are expanding.

Andrew Crisp, co-founder of the education consultancy CarringtonCrisp, says the pandemic “is the end of luxury learning, with the board at a five-star hotel for a weekend”. Business schools, he thinks, “are going to have to sharpen up because the new entrants are more fleet of foot in responding to customers”.

But Ravi Kumar, president of Infosys, sees a continuing need for engagement with universities, as they refocus on life-long learning. “They will have to pivot,” he says. “Executive education was about refreshing what you had learnt. Now learning is about switching from one profession or job to another. Education and work will be intertwined.”

The merits of the virtual classroom

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Just when Sumit Tomar was due to start an advanced finance course at Wharton School in March last year, the pandemic pushed his executive training entirely online.

But the electrical engineer, who lives in San Diego, has no regrets. “The virtual classroom serves my needs perfectly,” he says. “With the time difference, I can study from 6.30am till 11am and then have sufficient time to do my day job until 8pm. If I have some urgent work, I can walk out and come back to watch the lectures again in the evening.”

Many business schools have suffered setbacks to their advanced management programmes, with applicants discouraged by the forced shift to digital learning. But Tomar was happy to pay the full $67,000 fee and avoid the inconvenience and costs of travel. “It’s not cheap but it was definitely worth the money.”

Tomar is chief executive of pSemi, a semiconductor company. He says Wharton’s course, plus a previous one in general management at Stanford a decade ago, were a substitute for an MBA.

“I could never imagine studying full time: that’s two years, a lot of money spent and you are out of work. While I’m working, I’m learning in parallel and applying lessons in the real world.”

He admits that “the bonds you build in person are not the same thing as a virtual hang-out”, but that the digital format has made it possible to attract high-quality participants from around the world, as well as leading business figures willing to speak to his classes online.

He predicts the online format will help reinforce the position of leading schools. “Even if the pandemic is over, the virtual classroom won’t go away,” he says.

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