Schools are tailoring executive education to fit employer needs

By Pamela Sherrid

Nike sells custom-made athletic shoes, Dell builds computers to order, and Procter & Gamble lets customers pick the scent, color, and packaging of its cosmetics. So is it any surprise that business schools have started customizing their M.B.A. programs to suit corporate America?

Consider the new degree offered by the University of Texas–Austin to executives of Dallas-based Texas Instruments. A few years ago, the president of the semiconductor maker decided that his middle managers, mostly hard-core engineers, needed more marketing and financial savvy. After talking to a number of business schools, the company entered into a deal with the University of Texas. In January 1999, a group of 49 company managers began taking courses every other Friday and Saturday from University of Texas business professors at a Dallas hotel.

The managers' core courses, in subjects such as finance and marketing, are similar to those offered to the university's regular students. But the TI employees don't get a choice of electives. All their advanced courses focus on matters particularly relevant in their workplace, such as how to design computer chips that the marketing folks will be able to sell and how to price and distribute them most effectively. Each summer of the two-year program, students team up to work on a real company problem. One recent example: how to improve communication with customers so that the chips designed for them actually meet their needs.

More for the money. Executive education has long been a big business, with top schools like Columbia and the University of Pennsylvania's Wharton School offering $90,000–plus M.B.A. and other advanced degrees to managers handpicked by their bosses. Many prestigious schools have not felt a need to begin catering to individual employers, but a number of institutions are eagerly responding to companies demanding more relevance for their money. There are perhaps a dozen tailored programs already in place, with others in the works. Babson College, which offers a master's in accounting to the employees of Lucent Technologies, is presently in talks with two other employers. The University of Georgia has teamed up with consulting giant PricewaterhouseCoopers; Kennesaw State is working with Bell­South. "I like that it's not case studies just for the sake of case studies," says Felicia James, 39, a product development manager for Texas Instruments who is enrolled in the University of Texas program. One group of employees studying logistics, for example, suggested improved ways to handle the raw materials used in making semiconductors and has saved the company $5 million so far.

Customized delivery of a graduate program can be just as important to the employer–and as beneficial for the student–as tailored content. PricewaterhouseCoopers wanted to offer an M.B.A. program to up-and-coming employees of its management-consulting services group, who travel four or five days each workweek. But "having to be in town each weekend or a certain weekday evening just wouldn't work for them," says Don Burkhard, a director of the company's Learning and Professional Development Center. Burkhard came to an agreement with his own alma mater, Terry College of Business at the University of Georgia, to provide a two-year M.B.A. program to consultants that relies heavily on distance learning.

Managers in a traditional program might be required to spend two full weekends a month in class for up to two years. But PricewaterhouseCoopers students log an initial two weeks at the Athens, Ga., campus and then return there for only four weekends a year. The rest of the coursework is handled by computer-based communication. In a given week, students might download two audio lectures with slides from the Internet, take a quiz by E-mail, and spend hours in chat-room discussion with the three or four other students on their "learning team." Exams can be taken anytime during the week. "That works just perfectly–I took a finance exam on a plane trip to Europe," says Roy Greco, a 33-year-old consultant based in Philadelphia.

These new arrangements do raise concerns, for business-school accrediting organizations as well as for prospective students. "We want to make sure a customized program is not just a cash cow" for the school, says Milton Blood, managing director of AACSB–The International Association for Management Education, which accredits graduate business degrees. Blood has two main concerns: that content might be watered down in the interest of bending to customer wishes and that too many classes might be taught by company executives and adjunct professors who are poor teachers.

The accreditors have visited only a few schools with a customized M.B.A. program so far, because the organization audits individual institutions only once every 10 years. So far, says Blood, the programs have shown no compromise in quality. "It's in the self-interest of schools to protect the value of all their degrees," Blood says. Program administrators argue that, if anything, business schools tend to use their premier talent in corporate programs. "They know the students are more discerning and that the contract won't be renewed if the program is bad," says David Poole, chairman of the Executive M.B.A. Council and head of executive degree programs at Pepperdine University in Culver City, Calif.

No networking. Even if the teaching and content are first rate, students in a corporate program may miss out on a more subtle benefit of the traditional approach: getting to know students from other companies and professional backgrounds. "If what I wanted from an M.B.A. was to broaden my network, I'd try not to go to a company program," says Blood.

But students may enjoy a different sort of diversity. "One of the biggest benefits has been exposing me to parts of Texas Instruments that I wouldn't get in my normal job," says Felicia James. She says the Texas professors do give the class a grounding in the problems and practices of other companies, and that the advantages of single-company classes outweigh the negatives. Students get to dig into company matters in class discussion without worrying about leaking any secrets to corporate outsiders, for example.

In this tight labor market, employers are drawn to the idea of strengthening a manager's ties to the company using a customized M.B.A. program; a traditional program, without the company focus, might just as easily loosen the tie by providing valuable contacts elsewhere. On the one hand, "even in this day of Me Inc., people are likely to feel a certain loyalty to the company that pays a $50,000 tuition bill," says Douglas Ready, president of the International Consortium for Executive Development Research.

On the other hand, an M.B.A. degree is a highly portable credential. Some companies, such as PricewaterhouseCoopers, make their retention aims explicit. Though most companies assume the cost of the employee's degree with no strings attached, PricewaterhouseCoopers consultants who leave within three years of getting a degree must assume responsibility for part of its cost. At a minimum, companies can expect to hold on to the employee until the program is over–between homework and the full-time job, who has time to look?