Executive education, the cash cow of business schools, is in rude health. New executive education rankings, compiled by the Financial Times, include a record number of programs and show that United States-based schools are losing their dominance.
Switzerland’s IMD came top in the open-program ranking, in a further sign that European schools can compete with the US in the management education market.
Customized programs, which are tailor-made for specific businesses, have shown the strongest growth. Some 80 executive education suppliers have been ranked in 2014 – the biggest in the FT’s history.
Duke Corporate Education, a not-for-profit support corporation for Duke University, topped the customized ranking for the 12th consecutive year. HEC Paris, the French school, came second for the sixth year in a row, and was ranked first in four of the criteria judged by clients.
“We’re grateful for the tremendous vote of confidence which our participants and clients have shown us. Maintaining a leading position worldwide in the face of growing competition and an evolving landscape of executive education is an exciting challenge,” says Marina Kundu, in charge of executive education at HEC.
Spain’s IESE Business School came third in the customized program ranking, while ten of the top-15 rankings are claimed by European schools, excluding the Center for Creative Leadership, which is based in both Europe and the US.
During the financial crisis, many business schools had to cut staff and seek out new revenue streams to stay afloat. But executive MBA courses, which traditionally bring in the most revenue, are on the rise once more.
Some European schools have been overwhelmed with new clients. Oxford Said Business School, based in the UK, has seen revenues rise from $9 million to $15 million, said Andrew White, associate dean for executive education.
Ten Latin American schools increased revenues by more than 17% in 2013, on top of 13% increases in 2012, according to the FT’s data.
More than 40% of customers are considering increasing their spending on executive education over the next three years – up 4% on 2013’s rankings. Revenues from open programs are also up on average, with three in five schools performing better in 2013 than in 2012.
This is good news for prospective MBA students. Many corporations pay b-school tuition – in part or in full – to fast-track employees into management positions.
What’s more, 90% of corporate customers are likely to reuse the same school for the same program. Similarly, open executive educationprograms have on average more than 50% of repeat business.
Six of the top-ten open executive education programs are taught at European schools. France’s INSEAD and ESADE Business School, based in Barcelona, claim fifth and ninth places respectively.
ESADE is ranked first for follow-up – the networking opportunities and interaction with the school after graduation – and for the quantity and quality of programs taught in conjunction with other business schools.
Canadian schools have also done well. Rotman School of Management leads the charge, coming in the top-50 of ranked customized programs. Rotman climbed 18 points in the preparation category – indicating purchasers' are particularly happy with the extent to which ideas were integrated into the program.
The Middle East has become an emerging executive education destination. It has also proven lucrative for many European schools.
Last year, London Business School won a $38 million contract to train managers at the Kuwait Petroleum Company, the largest executive education program in the school’s history.
HEC has close ties to businesses in Qatar and Manchester Business School (MBS), also included in the open program ranking, launched an EMBA program in Dubai in December.
Commentators point out that there is a death of management expertise in the Asia Pacific region. Business schools have been trying to fill that gap by selling courses to corporations headed in Asia.
Open enrolment programs are now shorter and use a greater amount of technology to deliver learning. Many EMBAs are now blended – combining face-to-face delivery with tech-enabled distance learning.
It is online-based courses that are seeing the most growth in demand, said Michael Malefakis, associate dean for executive education at Columbia Business School.
Costs are pushed down as technology becomes better and new delivery platforms are devised. Globally, the majority of business schools are launching online-based MBA and EMBA programs.
“In the Middle East, MBS's success has been based partly on a powerful blended learning model of delivery,” says Randa Bessiso, Middle East director of MBS.
“[The program] reflects the real desire and demand for a more personalised blended MBA experience that still offers all the benefits of learning whilst working, but with substantial direct personal contact with some of the world's leading thought leaders in their fields.”
But in all regions of the world, executive education is booming. Other schools to make the top-15 customized program rankings include Italy’s SDA Bocconi, Cranfield School of Management, based in the UK, and IE Business School of Spain.