Which MBA? Making the right choice of executive education. George Bickerstaffe

Transcription

1 Which MBA? Making the right choice of executive education George Bickerstaffe The following is extracted from the 18th edition of Which MBA?. The full version includes details on different delivery methods, such as part-time, distance-learning and executive MBAs. It also provides in-depth profiles of 120 major business schools, including a full breakdown of schools' rankings. The book is available from the Economist bookshop at:

2 Pearson Education Limited Edinburgh Gate, Harlow, Essex CM20 2JE Website: The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through our digital portfolio, where our latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising conferences and roundtables. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 26 Red Lion Square The Economist Building 60/F, Central Plaza London 111 West 57th Street 18 Harbour Road SW1R 4HQ New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) Tel: (1.212) Tel: (852) Fax: (44.20) Fax: (1.212) /2 Fax: (852) london@eiu.com newyork@eiu.com hongkong@eiu.com Website: Electronic delivery This publication can be viewed by subscribing online at Copyright 2006 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Economist Intelligence Unit Limited. ISBN-13: ISBN-10: British Library Cataloguing in Publication Data. A catalogue of this publication is available from the British Library. The authors of EIU Research Reports are drawn from a wide range of professional and academic disciplines. All the information in the reports is verified to the best of the authors and the publisher s ability, but neither can accept responsibility for loss arising from decisions based on these reports. Where opinion is expressed, it is that of the authors, which does not necessarily coincide with the editorial views of the Economist Intelligence Unit Limited or of The Economist Newspaper Limited Printed and bound in Great Britain by Ashford Colour Press Ltd., Gosport.

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4 Have you got what it takes to be a world-class leader? 90 exceptional people experience the IMD MBA each year. Launch yourself into the challenge of this intensive, one-year leadership development program: a life-changing experience. Are you: Bright, successful, on the fast track, wanting to make it to the top? A young, experienced international manager with a global mindset and a burning ambition to lead? Ready to think outside the box and driven by the desire to make a difference? If so, IMD is the place for you. Visit us at: tel: fax: mbainfo@imd.ch IMD International Institute for Management Development Chemin de Bellerive 23, PO Box 915, CH-1001 Lausanne, Switzerland

5 Contents Which skills will tomorrow s leader need? 7 Full-time MBAs 19 Full-time MBA rankings 41 Open executive programmes 49 Custom executive programmes 57 Which MBA? The Economist Intelligence Unit Limited 2006

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7 Which skills will tomorrow s leader need? Since any form of executive education is about improving your skill set to make you either more attractive to recruiters or more likely to win promotion, it is first worth taking a look at which skills recruiters say they are looking for. Here we examine the results of a survey of a group of senior executives to find out what they are looking for in tomorrow s leaders. They were asked which skills they hoped to find in talented young managers and how these were likely to change over time; which skills were in short supply; which methods of management education (for example, an MBA or short executive education courses) would most effectively meet those needs; which providers of management education were most important in developing managers; and many other questions. By studying the results of the survey and comparing them with similar surveys conducted in 2004 and 2005 you will get an idea of what companies, and therefore employers or recruiters, are looking for in their managers and which providers of management education can best supply this. Although the survey reveals complex and sophisticated thinking about the use and value of management education, one thing is clear: there is a greater determination among the executives surveyed to use it to train their best employees. Over the three years the survey has been conducted, the percentage of executives saying they will rely on executive education more over the next five years has risen from 35% to 58%. Those expecting no change in their use of executive education have declined from 59% to 32%. Over the next five years, do you expect your company will rely less, or more, on executive education (including MBAs) to train its best employees? (%) More No change Less Only 8% of the executives surveyed believed that managers can develop all the skills they need through experience, and that training has value only as an employee benefit. The number saying that management education is critical in building the knowledge and skills of managers has remained fairly consistent at 31% (30% and 34% in 2005 and 2004 respectively.) Overall, the executives generally believe as they did in previous years that experience can provide some of the qualities they are seeking but that management education has a role in topping these up. In other words, the consensus seems to be that an MBA does not make the manager. Employers are looking primarily for someone with the right personal qualities and see education as a way of bridging any skills gap. Which MBA? The Economist Intelligence Unit Limited

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9 Which skills will tomorrow s leader need? What role does management education and training play in developing your company's best talent? (%) A manager can develop some of the skills he needs through experience, and the rest can be developed through education and training Management education and training is critical in building the knowledge and skills of managers A manager can develop most of the skills he needs through experience, and the gaps can be plugged through education and training A manager can develop all of the skills he needs through experience, and management education and training is useful only because staff perceive it as a benefit As for who is responsible for equipping a manager with those skills, it is clear that most executives (68%) think that the firm and the individual share equal responsibility (though this is a slightly lower percentage than in 2004 and 2005). Only 7% thought the company held the primary responsibility and 25% said it was mainly something the manager himself or herself had to take responsibility for. Who is more responsible for equipping a manager with necessary skills? (%) Equal responsibility The manager himself or herself The company So what are the skills these executives believe that young managers must have? Top of the list, perhaps not surprisingly, is honesty and integrity, which is given a rating of 87%, largely in line with the results of the previous two years. Next come communication skills (84%) and people skills (82%), again showing little change on 2004 and The corporate world seems to be delivering a consistent message: they want their managers to excel in the soft skills, particularly leadership, rather than the harder-edged technical and financial areas (perhaps because they assume managers will already be skilled in these). A good understanding of technology and financial knowledge, for example, is rated rather low at 64% and 57% respectively (virtually unchanged on previous years). Furthermore, as in earlier surveys, previous managerial experience (54%) and management education (51%) are not rated especially highly. Which MBA? The Economist Intelligence Unit Limited

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11 Which skills will tomorrow s leader need? Which characteristics does your company currently look for in its most talented young managers? (importance rating, %) Honesty and integrity Communication skills Excellent people skills Innovativeness/openness to new ideas Strategic vision International knowledge/the ability to manage across cultures Deep knowledge of market needs and operations A good understanding of technology Dealmaking ability Financial knowledge Management experience Management education Functional knowledge of various parts of the business In five years time, do you believe these characteristics will have gained or decreased in importance as the qualities required of potential company leaders? Increase/decrease in importance ( 100 to +100) Innovativeness/openness to new ideas +69 International knowledge/the ability to manage across cultures +60 Strategic vision +58 Communication skills +57 Excellent people skills +53 Deep knowledge of market needs and operations +51 A good understanding of technology +45 Honesty and integrity +35 Financial knowledge +26 Management education +25 Dealmaking ability +22 Management experience +22 Functional knowledge of various parts of the business +17 Furthermore, these soft skills are likely to remain high on the agenda of the executives surveyed. Asked to assess those characteristics that will grow in importance over the next five years, the majority opted for these rather than areas such as functional or financial knowledge. Communications skills (57%) and people skills (53%) were both rated as likely to increase in importance over this period. This is something that has not been lost on providers of management education, particularly business schools. Leadership, communications and ethics have become integral parts of the required curriculum of many MBA and executive education programmes. However, the executives surveyed put an even greater emphasis on the need for different kinds of soft skills, perhaps more closely connected to business issues. For example, in an increasingly international and competitive business world, 69% say that innovativeness and openness to new ideas will matter more in five years than they do now. Which MBA? The Economist Intelligence Unit Limited

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13 Which skills will tomorrow s leader need? Coupled with this will be a need for strategic vision and, in particular, an ability to manage effectively in the global marketplace. Of the executives surveyed, 60% thought that international knowledge and the ability to manage across cultures would grow in importance and 58% believe that strategic vision will become increasingly important (these figures have remained broadly consistent over the three years the survey has been conducted). Both trends reflect underlying realities. Globalisation, evident in such phenomena as increased offshoring, shows no sign of slowing; indeed, it may well accelerate. Moreover, rather than operating separate businesses in lots of countries, global firms are seeking to integrate their many operations around the world seamlessly hence the need for international knowledge and the ability to cross cultures. The emphasis on strategic vision, though somewhat lower, is symptomatic of a move away from concentration on core businesses which has defined many firms priorities in the past decade. Knowing what skills are likely to be required in the future by potential employers is helpful in deciding which management education options to choose. Even more helpful is to get an insight into what skills employers believe are in short supply: those that are considered rare are obviously worth acquiring. When asked to identify the main skills shortages among their company s up-and-coming talent, executives rated strategic vision (32%) and people skills (50%) as most rare. These are qualities that can be hard to teach, of course, though the executives also threw in financial knowledge (51%), market knowledge, innovativeness and management experience (all 53%) for good measure. Which of the following skills are most prevalent and which most lacking among your company's up-andcoming talent? (0 = extremely rare, 100 = extremely prevalent) Honesty and integrity A good understanding of technology Communication skills Functional knowledge of various parts of the business International knowledge/the ability to manage across cultures Dealmaking ability Management experience Innovativeness/openness to new ideas Deep knowledge of market needs and operations Financial knowledge Excellent people skills Strategic vision When asked where the greatest talent shortfall will be, strategy is by far the biggest concern, as it was in both 2004 and Strategy has long been one of the core subjects taught by business schools, particularly on MBA programmes, and it is curious that the executives surveyed expect a shortage of managers with strategic vision. On the face of it, sending up-andcoming managers on an MBA or executive MBA programme might help address the shortfall. However, the second-biggest concern a lack of managers exhibiting innovativeness and openness to new ideas (cited by 36% of executives) seems more difficult to address. Which MBA? The Economist Intelligence Unit Limited

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15 Which skills will tomorrow s leader need? In which areas do you see the greatest shortfalls in managerial talent over the next five years? (%) Strategic vision Innovativeness/openness to new ideas Excellent people skills International knowledge/the ability to manage across cultures Communication skills Deep knowledge of market needs and operations Dealmaking ability Honesty and integrity A good understanding of technology Functional knowledge of various parts of the business Management experience Financial knowledge Which type of provider do you believe has the most important role to play in developing executives at your company? (%) Business school Independent provider/consultant In-house trainer Corporate university Surprisingly perhaps, given that many executives criticise business schools for failing to teach the business skills they require and for conducting research that they say lacks relevance to real business, the survey shows that the executives who responded have considerable and growing faith in business schools. In the 2006 survey 49% believe that they play the most important role in developing their managerial talent, a rise from 35% in 2004 and 42% in This has been matched by a corresponding drop in the faith placed in in-house trainers, traditionally the most common form of management education. The survey shows that faith declining from 29% in 2004 to 19% in 2005 and 17% in Figures for independent providers and corporate universities have remained largely consistent across the three surveys. About the survey In May 2006 the Economist Intelligence Unit conducted an online survey of senior executives asking them their views on what they thought the manager of the future would look like and the role management education would play in equipping future managers with the skills they need. Some 155 senior executives participated in the survey, including C-level executives (CEO, CFO, etc), senior vice-presidents and directors in a variety of functional areas. There was a wide industry spread, including manufacturing, professional services and healthcare. The annual revenue of the companies involved ranged from under US$500,000 to more than US$10bn. Which MBA? The Economist Intelligence Unit Limited

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17 Which skills will tomorrow s leader need? Which of the following courses does your company employ in developing managers? (%) 2006 In-house training 71 MBA 29 EMBA 25 Executive programmes (open) 27 Executive programmes (tailored) 27 Executive programmes (consortia) 7 The executives do not seem to putting their faith into practice, however. Only 29% of companies use MBAs to develop their managers. This may be because an MBA, as opposed to the other types of programmes mentioned here, is usually paid for by the individual rather than the company. A large number (71%) use in-house trainers as the predominant means of developing their managers, even though only 17% think they play the most important role. One reason could be that this is an efficient and cost-effective way of training large numbers of people in a fairly short time. In your experience, which of the following courses have delivered good value in developing talent at your firm? (0 = very little value, 100 = excellent value) In-house training EMBA MBA Executive programmes (tailored) Executive programmes (open) Executive programmes (consortia) Asked which types of management education have delivered good value for their firm in developing talent, two of those provided by business schools MBA and EMBA programmes and tailored executive education were rated at around the same level as in-house training. Only open-enrolment and consortia executive education programmes scored relatively low figures. This reflects a growing trend to rate various forms of executive education more or less equally. In 2004, for example, executives said they regarded in-house training as much better value than any business school offering, when it scored 67%, compared with 59% for tailored courses and MBA programmes and 52% for executive MBAs. It is difficult to determine exactly what this change reflects. It is true that business schools have devoted considerable energy and resources to their executive education programmes in the past few years (largely as a response to falling MBA applications). So there may be a perception among company executives that these courses are better designed and organised, more relevant to their needs and, simply, better value. Which MBA? The Economist Intelligence Unit Limited

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19 Full-time MBAs Management education comes in lots of different packaging. In the MBA market alone there are at least three distinct delivery methods: full-time, part-time and distance learning. On top of that there are short, non-degree executive education courses, which in turn can be broken down into open enrolment programmes or those tailored to a specific company. Here we concentrate on full-time programmes. Advantages and disadvantages A full-time programme is what many prospective students regard as the authentic MBA experience. It certainly offers advantages compared with other options. Studying an MBA full-time gives you the opportunity to immerse yourself fully in the programme with few distractions from the learning process and in a stimulating atmosphere. Teaching faculty are usually much more accessible than, say, on a part-time evening programme, where time for out-of-class contact is limited. Moreover, the cliché that you will learn at least as much from fellow students as from professors is largely true, and having easy and frequent opportunities to meet, talk and work with classmates is a big advantage. Full-time programmes form the basis of the Economist Intelligence Unit ranking and they are the only type of programme that fully delivers all four elements in our ranking criteria: career opportunities; increased salary; networking; and personal development/education experience. Part-time and executive MBA students are often sponsored so the career/salary issues are less important, and distance-learning students, by definition, find networking difficult. Indeed, networking is one of the key benefits students look for in an MBA programme (see Table 2.1). This is much easier on a full-time programme. As one of our student diarists points out (see Student perspective), full-time students, particularly at a campus-based school, generally work and play together and often form life-long friendships. Of course, networks exist on other types of programme. Part-time and EMBA students spend large amounts of time together and establish friendships. But the experience is on a slightly lesser scale: less intensive and perhaps not as long lasting. Why did you decide to study for an MBA degree? Full-time students, (%) a To open new career opportunities 37 Personal development 21 To increase salary 14 To further current career 13 Educational experience 9 Potential to network 6 Company advice or requirement 1 a Importance accorded by students to each factor. Which MBA? The Economist Intelligence Unit Limited

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21 Full-time MBAs Full-time options (1-year, 2-year) A full-time programme can take anything from a mere ten months to two years to complete. In the US most full-time programmes last two years, taught over four semesters (or sometimes eight mini-semesters) of about weeks in the winter and spring of each year. (This means they do not actually last two years in total teaching time, just two calendar years overall.) A variation on the semester system is trimesters, or three periods in each of the two years (these are also sometimes referred to as terms or, confusingly, quarters). There is much greater variety outside the US. Some leading schools, such as London Business School (LBS) and IESE in Barcelona, follow a two-year style programme, though with considerable flexibility. For example, the LBS MBA lasts between 15 and 21 months; IESE s programme is completed in 19 months. At two other prestigious European schools INSEAD in France and IMD in Switzerland programmes last under a year. The full-time programme at Bocconi in Milan lasts 14 months, at RSM Erasmus University in Rotterdam 15 months and at Imperial (Tanaka) in London 12 months. US schools have also tinkered with their programmes to reduce the time taken to gain an MBA. Many now offer accelerated one-year tracks for students who have studied business or related degrees at undergraduate level. Students take a short top-up course in business fundamentals during the summer and then go straight into the second year. However, there are no signs yet that any of the top-ranked US schools, with the exception of Pittsburg (Katz), are about to switch to one-year programmes. Indeed, Katz has introduced a much more traditional two-year programme alongside its long-running one-year European-style MBA. In the past, some schools have attempted to shorten programmes by allowing students to continue to study straight through the summer. However, this caused problems because of the importance American employers place on the summer internship (company placement). Many job offers following graduation come as a result of successful internships and most US schools now accept that they are essential for career success. The classic two-year programme The first year of a two-year programme is generally devoted to core courses. These deal with the fundamentals of business, typically including finance, financial and managerial accounting, human resources management, information management, macroeconomics and microeconomics, marketing, organisational behaviour, production and operations management, and quantitative analysis. Increasingly, though, in response to student demand, schools will offer one or two electives in the first year to allow earlier specialisation as students are looking for a certain amount of specialised knowledge that they can take into their summer internships. The second year will sometimes begin with a compulsory integrative (or capstone ) course, frequently based on business strategy, designed to pull together the first year s work. However, this practice is declining. This is an interesting development, given that our survey of executives (see Chapter 1) shows that they generally regard strategic vision as an increasingly valuable, but frequently missing, competence among employees. Mainly, though, the beginning of the second year is a time for students to pursue their own interests or career objectives by taking optional subjects, or electives. These, especially in the US, can (or sometimes must) be grouped into specialisations, often known as concentrations or majors, that reflect functional areas such as finance or marketing or even specific Which MBA? The Economist Intelligence Unit Limited

22 How having that extra bite can make you the world s no.1. Steve Jobs, co-founder of Apple, is famous for his incisive and demanding leadership style. It may not always make Jobs popular: but it works. As everyone knows, Jobs is core to Apple s success. The appreciation of different leadership styles is just one of the things you ll learn at the University of Edinburgh Management School. The Edinburgh MBA is unique. It has developed its very own career and personal development programme which allows you to evaluate and truly develop your own management and leadership style, one that really works for you. All in all, an Edinburgh MBA will help make you a better manager, with just the right amount of bite. For more information visit or edinburgh.mba@ed.ac.uk The University of Edinburgh Management School holds both EQUIS and Association of MBAs accreditation.

23 Full-time MBAs career goals. The longer the course, the more time students have to devote to these. Such two-year programmes only occasionally include the project-based thesis that is a feature of many one-year programmes, particularly in the UK. But most do include in-company project work and softer elements such as leadership, interpersonal skills and general personal development, either as courses in their own right or as parallel workshops and seminars. These courses were introduced over a decade ago, largely in response to companies complaints that although MBA graduates were very good at theory, many were not so talented in actually managing people. They seem to have had mixed results, according to our survey of executives, which rates communications skills and people skills as among the somewhat lacking. The one-year-plus programme Although so-called one-year programmes vary considerably in length, they are all extremely intensive. Most of them follow the same core/elective framework as two-year programmes, but because of time constraints the range of electives offered may be limited. In addition, some schools, especially in the UK, include a lengthy in-company or research project that also restricts the time allocated to teaching; in many, such as Oxford (Saïd) and Lancaster, at least two months of the programme is taken up by off-campus research and thesis writing. Proponents of one-year programmes argue that the time spent face-to-face with teaching staff differs little from two-year programmes, but their opponents respond that one year is not long enough for issues to be covered comprehensively or in depth. It is certainly true that the intense pressure of a one-year course is a good preparation for business life where time management and prioritising are essential skills but the first year of a two-year programme can be just as gruelling and effective. Which MBA? The Economist Intelligence Unit Limited

24 Full-time MBAs What should be in an MBA programme? There are certain elements that by consensus are regarded as essential to an MBA. They include initial functional or core courses (such as finance, marketing and economics) and specialist analytical techniques (mainly statistics), followed by more advanced courses or electives in one or more of the core areas. Soft skills may be part of the core courses or taught in supplementary seminars and workshops. This is essentially an American model (dating from the 1950s and earlier), aimed at enabling a general manager to understand the work of functional specialists and how the various activities fit into the business as a whole (or, as most students now use the degree, to allow a functional specialist to become a general manager). Elective courses can produce specialists, but they will be specialists who can understand the other functions of management. There have been experiments with new approaches and variations on this theme, but the model has proved remarkably robust. Below is a checklist of what an MBA programme should ideally contain. Although developed by the Economist Intelligence Unit, this is not dissimilar from the criteria used by the major international accreditation bodies (see page 26). Checklist for an MBA programme The programme should ideally contain the following: Pre-programme courses (optional or required) on quantitative methods, computing and mathematics for students not already skilled in these areas. An orientation programme before the start of the first term to meet other students and members of the faculty, and for team-building exercises. Solid grounding in core courses for general management. Waivers for existing skills (these are opposed by some schools). A wide choice of electives that also allow in-depth specialisation. Some courses outside the business school (for example, in other university departments) should be allowed and encouraged. Good international content, for example: course material, the number of foreign students and teachers, visits overseas, the opportunity for language tuition and exchanges with foreign schools. Reasonable emphasis on soft skills. A good range of company projects. The schools should also provide the following: Good teaching skills and research and library facilities. A satisfactory programme of senior executives as guest speakers, executives in residence and others. Reasonable open-door policy for access to faculty. An administration willing to respond to student concerns. Formal help with finding accommodation. Excellent careers services, including training in interview skills. A good and active network of alumni. 24 Which MBA? The Economist Intelligence Unit Limited 2006