When Dow Chemical Co. decided to use executive education as a tool to help achieve its strategic objectives, the company shopped around at nearly all the top business schools. Unsatisfied that any school could deliver the kind of program it wanted, Dow decided on a little home schooling.
The company scouted out the best B-school professors it could find and brought them in to teach its managers and executives in corporate classrooms. Like Dow, a growing number of corporations, from American Telephone & Telegraph to Glaxo, are discovering they can cherry-pick top experts and plop them into their own programs.
Companies like the in-house approach because it lets them tailor executive education to specific company issues or goals. "Universities are wonderful places for individual development," says Anthony J. Fresina of Executive KnowledgeWorks, a consultancy that helps companies design in-house curriculums and hire business-school professors to teach them. "But you can't focus and align a company in those places." Of course, business schools have tried for years to help big corporate clients make executive education more useful by designing customized programs. But companies are opting to create their own courses because they can cast a wider net for the best faculty--at lower cost. AT&T estimates that in-house programs save about $2,000 per student.
REALITY CHECK. Executives at Dow Chemical were frustrated by the lack of real-world practicality in traditional executive-education programs. When its managers returned from general-enrollment programs at business schools, they often were unable to say how they would approach their jobs differently, says Larry Ward, manager of executive development. "It's up to them to make a connection between what happened at Harvard and what's happening at Dow," says Ward. "They need to make the linkage, and it's an effort for them."
Dow wanted to make its executives more responsive to customers. So it created an in-house Executive Leadership Series. The 21 2--day seminar brings 25 Dow managers together with five major customers, including companies such as Hewlett-Packard Co. and Rubbermaid Inc., along with professors from business schools at the University of Michigan, the University of Southern California, and the London Business School. Some 300 managers have been through 11 sessions since 1990. "It changed my view of the company a bit," says James A. Cederna, a group business director who participated in a 1992 session. "Many of us are in charge of running divisions, but this was a more concentrated way of looking at the total."
Of course, there are pitfalls to professor-picking. Some companies opt to showcase stars of the B-school pantheon. Critics argue that at rates as high as $20,000 per day, these profs rush in for guest appearances, seldom getting to know the company or its problems. "Some [professors] are up for the one-night stands and some are much more interested in long-term, ongoing relationships," says Dean Kropp, a professor at Washington University's John M. Olin School of Business.
The savvier companies, such as Champion International Corp., favor experts with less marquee value, figuring they're more likely to study the company and play an instrumental role in implementing changes. These professors typically charge $5,000 to $12,000 per day, depending on how much preparation and traveling they must do.
ENTHUSIASM. Champion's most recent program featured the University of Michigan's David Ulrich, a human-resources expert, and Vijay Govindarajan, a professor at Darmouth University's Amos Tuck School of Business who teaches strategic cost management. They and other professors examined Champion's efforts in marketing, finance, human resources, and manufacturing, and helped managers ensure that their work fit with the company's overall strategy. "At the end of the program, I directly apply the lessons to that specific company," says Govindarajan. "You become part of the change process in some sense."
The internal approach is not without its drawbacks, of course. Combining faculty from different universities and consulting firms in a single seminar can make it hard to coordinate presentations into a seamless program. And students lose the outside perspective they would get by mingling with other companies' executives in off-the-shelf programs.
Nevertheless, much of Corporate America believes that it's more important to link educational and training efforts directly to corporate objectives. "Everything is a trade-off, and we feel it's worth it," says Dow Chemical's Ward. There's a lot of enthusiasm for the in-house approach--though still few numbers to back it up. In the end, only performance will keep these professors moonlighting in corporate classrooms.
THE PICK OF THE B-SCHOOL CROP Management-school professors in demand for in-house corporate education programs Professor Business school Expertise Jay Conger McGill University Leadership Ram Charan Freelance* Strategy Vijay Govindarajan Dartmouth Strategy (Tuck) David Reibstein Pennsylvania Marketing (Wharton) Larry SeldEn Columbia Finance Alan Shapiro Southern Finance California Hirotaka Takeuchi Hitotsubashi Marketing David Ulrich Michigan Human resources John Whitney Columbia Management Paul Farris Virginia Marketing (Darden) *Former Harvard and Northwestern faculty member, now teaches executive education at Wharton and Columbia DATA: BUSINESS WEEK