It was a trade mission to assess South America’s appetite for executive education where HEC, the leading French business school, could extend their global reach. The boffins would have stayed in Brazil had the footballing event of the decade not ramped-up hotel prices.
The charm offensive was part of a wider effort to tap into emerging markets’ growing need for talented managers. After years of stagnancy, the business of executive education is beginning to boom once more.
During the financial crisis firms were less willing to pay for their staff to attend executive training courses and MBAs. Those days are done. Demand for customized executive programs, schools’ most profitable courses, has been insatiable. Business schools are struggling to keep up with the bevy of new business clients seeking courses on everything from leadership to big data.
This boom is being driven by expansion into new territories. Outside of Europe and the United States, which have the most revered schools, the grass looks increasingly greener.
The Middle East has proved particularly promising for Europe’s top educators. HEC, whose customized ranking shot from seventh to third this year, is strong in Qatar, while London Business School won a $38 million contract to train top managers in Kuwait last November.
Andrew White, associate dean for executive education at Oxford Saïd, said revenues from custom business have risen from $9 million to $15 million in a year.
Yet demand for the top executive education courses in Europe has risen by just 3%. But ten of the top Latin American schools had increase in revenues of more than 17% last year, on top of growth of more than 13% in 2012.
HEC has launched open-enrolment programs in Qatar, too, as well as in China. New frontiers are propelling the business of executive education to new heights.
Inge Kerkloh-Devif, executive director of global business development at HEC Executive Education, says: “In the Middle East, for sure. In China there is still a very big need for executive education, but it’s quite mature market.”
Business schools can also hear the call of Africa. “Africa – its growing market: the emerging market,” enthuses Inge.
HEC has just launched its first executive Master’s degree in Azerbaijan. The school is also training governments in Africa to help improve performance, and just signed-up the Central Bank of West African States for a customized program.
Business schools are also snapping up clients in Asia. Program directors say Indonesia and Malaysia are starting to ask for more executive courses.
Asian companies are suffering from a dearth of management experience. Companies are willing to splash out on tailored programs from European schools that are flying flags in the region.
“Despite the fact that a lot of great talent is coming in, it’s just not able to keep pace with all the opportunities that companies have in Asia,” says Stephen Shih, Asia-Pacific MBA recruiter at Bain & Company.
“The leading companies are investing in their talent. That’s a combination of recruiting the right people, giving them the right development opportunities and retaining them.”
It was the tenth anniversary of the school’s EMBA program, which has climbed several places to the top-25 of the executive MBA rankings. Dozens of alumni had gone back to school to network and talk-up their achievements.
Kathy Harvey, the program’s director, was in a jubilant mood. A survey had revealed 61% of their alumni respondents said the EMBA helped them develop new ways of thinking to tackle business challenges.
“There is lots of interest in identifying the ROI (return on investment) of MBAs and that is not surprising given the investment such programs represent,” she said.
“But for EMBA alumni, senior managers who have reached the point in their career when they want to stop and take stock, this is not about financial return but about gaining the insight and resilience to make a much bigger impact within the organisation.”
The timing had been fortuitous. As the economic recovery in Europe gathers pace, EMBA students are being given a helping hand by employers to pay off tuition.
Customized executive education programs may be lucrative, but the degree programs are the focus of many European business schools. One of the main drivers is that careers are becoming longer and longer. Even if managers are particularly talented, they may need to renew their knowledge.
Peter Tufano, dean of Oxford Saїd Business School, said the school's EMBA “has attracted participants of the highest calibre". He added: “Many are senior leaders in their fields.”
These EMBA candidates seek to learn from their peers, many of whom come from differing backgrounds and world regions.
Ayham Ammora, an Oxford EMBA alumnus who is now a c-level executive at an energy major, says his classmates came from fields ranging from banking to construction. He still communicates with them through email, and meets one in person every other-week.
He adds: “It's very useful to have this huge insight when approaching problems, and also developing that network post-MBA… to have their thoughts on particular issues.”
The impact of technology has been a key driver in this executive demand. Open-enrolment programs are incorporating a greater use of tech, while blended learning – using both face-to-face and online delivery methods – is more popular. It also allows working executives to manage busy study schedules.
HEC director Inge says: “Technology means there is an opportunity now to get this education in a simpler way to a lot of people.”
But others argue that an online delivery method can never replace face-to-face learning.
When Barbara Bader-Klein began her EMBA program, juggling a full-time job was one of the biggest challenges. The Oxford student was a senior consultant for a bevy of UK companies including Accenture and Hewlett-Packard.
“You are very much facing a lot of challenges and business problems from day-one on the program that you have no background in,” she laughs. “The comfort factor is definitely not there.”
But Barbara, who is now a partner at boutique law firm, says it was absolutely worth it: “The feedback I’ve got from the various multinationals I’ve consulted was that you bring that enormous additional layer of value and insight.”
Others seeking to save time and cash have turned to Moocs – massive online open courses. Executive education bosses admit Moocs are seen as competition. Yet eyebrows are raised about the quality of learning in a market which is rarely regulated.
There are also wider concerns about drop-out rates and a lack of connectivity with course peers.
“We are really training high [level] executives and they are not only looking for an experience over their computer,” says Inge from HEC.
“They’re executives – we are not teaching fundamentals, we are teaching leadership, strategy. So those are topics which are not only accessible online.”
But the demand in online learning differs from one region to another, she adds. In the Middle East, the overwhelming preference is for class-based learning.
If demand in those emerging markets continues to surge, there really will be an executive education boom.