CORPORATE AMERICA'S NEW LESSON PLAN
With its proposed takeover of Tele-Communications Inc., Bell Atlantic Corp. has dem-onstrated that it's bent on breaking the phone-company mold. And as it pulls into the fast lane on the information superhighway, the Baby Bell's middle managers can ill afford the complacency that is a legacy of their days as part of the American Telephone & Telegraph Co. monopoly.
To break tradition and embrace a new culture of change, the company's executives have gathered in a classroom at the University of Pennsylvania's Wharton School. They're debating the wisdom of challenging the boss. "I can disagree all the way up to the president," claims one manager. Retorts another: "Once." Laughter fills the room.
Like Bell Atlantic, many companies these days are using executive education to meet specific strategic goals or transform corporate culture. Ford Motor Co. managers are being instructed in how to become more customer-responsive. Glaxo Inc. is using education to teach executives new leadership skills. General Electric Co. is sending managers to school to learn how to develop markets in fast-growing economies such as those of Indonesia and Malaysia. "Executive education is increasingly being used as a management tool to accomplish business objectives," says Robert E. Mittelstaedt Jr., vice-dean at the Wharton School.
LINKAGE. The trend is forcing companies, B-schools, and consulting firms to alter their approaches. Organizational transformation is replacing a focus on personal development. "Companies definitely have in mind some things they'd like to change, and in many cases it's a change in culture," says Thomas Keller, dean of Duke University's Fuqua School.
Seeking to link education with specific, real-world goals, companies are sending fewer managers to off-the-shelf programs--a change that may be causing many B-schools to lose participants. Corporate customers, which spend nearly $15 billion a year on formal training programs for managers and professionals, are demanding that learning lead to immediate changes on the job. Some companies are sticking with business schools for custom programs, such as the one for Bell Atlantic at Wharton. The school now draws half its executive-education revenues from such custom programs. Others are designing their own in-house courses, often cherry-picking some of the best professors and consultants to teach them (page 105).
Still others are launching full-fledged internal schools, smaller versions of GE's famous Management Development Institute in Crotonville, N.Y., or Motorola University. "More companies are launching their own corporate universities, not as a building or campus but as a learning process," says Jeanne C. Meister, a consultant who recently studied educational efforts at 30 corporations, including American Express and Intel.
The goal: to use education and training to shake up bureaucracies and give meaning to today's managerial buzzwords and missions. Consider Bell Atlantic. The company has sent about 150 managers to Wharton since late 1992, with the objective of making them more accountable and more aggressive.
Once there, they discuss "managing with ambiguous authority" and study the evolving telecommunications network. And they challenge one another. "If you worked here for five years and you didn't steal anything, then you pretty much had a job for life," says Eileen Foreman, Bell Atlantic's manager of management education. "We want to encourage people to challenge assumptions, to be critical thinkers, and to break the rules."
Ford has been using education to encourage cooperation across disciplines. Ford managers break into "multidisciplinary" groups to delve into such issues as marketing to women and the relationship between employee and customer satisfaction during a 10-day-long program held at Duke University. The idea: As managers debate the real-world issues they deal with back at work, they should be able to break out of their own narrow mindsets. "The program helps develop product-oriented mark-eting people and marketing-oriented product people," says Basil J. Coughlan, vice-president for North American marketing operations at Ford.
Some companies have begun using so-called action learning: Instead of passively sitting through lectures, managers engage in a series of team-building exercises and projects tied to real issues. In an in-house program, Cigna Corp. puts together teams of a dozen managers for a month of intensive training. One recent group studied the strategic direction of one of the insurance company's key business units. "We take what we consider our biggest business challenges, and a group of really talented people, and expect that they will take a fresh look at the issues," says Marilyn Gardner, vice-president for corporate training.
"VERY REAL." Cigna's managers spend the initial week getting to know the business they'll be delving into. Then smaller groups fan out across the U.S. to conduct interviews with customers, competitors, agents, brokers, and employees. When they return, they spend a week sifting through data and coordinating their research. The final leg of the month-long session is used to produce recommendations that are presented to senior management. Instead of poring over old, static case studies of problems at other companies, the executive students grapple with challenges that confront Cigna. "The combination of academics and [application] to a Cigna business issue made it very real to me," says David A. Gordon, a vice-president who went through the program.
Ameritech Corp., now putting its top 1,000 managers through intense off-site workshops, even sends executives to work for an afternoon in soup kitchens, housing projects, and AIDS clinics, all as team-building exercises. It also invites customers into classrooms to tell it like it is, giving managers a chance to hear complaints face-to-face. After three days, managers lead their own employees through the same exercises.
That's key in the effort to give executive education the impact to change a company. Making Ameritech's managers accountable for teaching others forces them to take these programs more seriously. "There has to be total commitment, otherwise it becomes a flavor of the month," says Ameritech President Richard C. Notebaert, who has attended 18 of the company's 20 educational sessions.
Motorola Inc., long regarded as a leader in executive education, also recruits its executives as teachers in its in-house programs. "When you have to teach, you are forced to learn the greater nuances and details of the changes you are asking people to make," says William Wiggenhorn, president of Motorola University. And a course taught by the boss is bound to have more weight than one led by a professor or consultant.
That sort of commitment from the top is a must--but it's just a start. A class, no matter how focused and no matter who teaches it, cannot transform a company. "You probably can't turn a culture around with an educational program alone, but when a program is tied directly to strategy, it does make a difference," says Joseph L. Galarneau, executive-education director at AT&T.
Employees will only change if they're given real incentives to do so. "Ultimately, training will die if you don't get large numbers of people involved and don't change some of your rewards and structures," says Jay Conger, a professor at McGill University. Sounds like pretty good, if familiar, advice: Practice what you preach.Lori Bongiorno in Philadelphia