Decreased sponsorship, but sustained demand
As budgets are cut and purse strings are tightened, employees are finding their company's professional development fund is fast drying up. In the business school sector this has follow-on effects into the classroom. Candidates enrolling in Executive MBA degrees no longer have employer sponsorship to support them. Rachel Killian, MBA Marketing & Recruitment Manager at Warwick Business School in the UK has seen a significant fall in the percentage of participants (on the school's EMBA program) with employer sponsorship in 2009. However, our overall student numbers haven't fallen, suggesting that self-funding applicants still very much value the MBA experience and are willing to fund themselves if their employers cannot she says.
Across the Atlantic, Fordham University in the US has also seen a decline in company sponsored EMBA candidates. Companies are obviously less willing to financially sponsor their highly valued employees at this moment in time, says Fordham's Francis Petit, Assistant Dean and Director of Executive Programs. In Fordham's fall 2009 class intake, only six percent of executive students were fully financially sponsored while 41% were partially sponsored and 53% were self-sponsored. We have also seen the total amount in the partial sponsorship packages decrease as well as a rise in self-sponsored students, says Petit.
All this adversity is leading to some interesting new avenues for financing. At Fordham, Petit and his colleagues advise students to first find out the company policy and then see if their line manager is willing go beyond that policy. If that is the case, HR usually does not interfere, says Petit. In addition to the loan option as well as our school's payment plan, we also advise our EMBA students to speak with their accountants as some of our current executive students have been getting about a third of their tuition expenses back within their tax refund.
Indeed, though difficult markets and recession economies the world over have changed EMBA applicant pools, their effect has not been wholly negative. If anything, the quality of candidates is on the rise, as in tough economic times only the most serious and motivated candidates will jump over the financial hurdles to see thei r EMBA project through, says Hannelore Forssbohm, Program Manager of the Kellogg-WHU Executive MBA. Other programs such as ESCP Europe have launched special funding solutions geared towards Small and Medium Enterprises (SMEs).
Traditionally in years past, the Executive MBA was very much the terrain for rising t alent in large corporations. SMEs today are more sensitive to nurturing good leaders, the financial downturn having accentuated the need for strong management skills and innovative thinking. In ESCP Europe's intakes of 2010 and 2011, five key managers from SMEs were awarded the 'Corporate Social Responsibility (CSR) Initiative for SMEs' scholarship, covering two thirds of the tuition fees. Managers are sponsored for presenting a strategic plan for growth with specific goals to achieve in an international context.
Somewhat ironically, the financial crisis has forced candidates to reinvent themselves, making them more well-rounded and employable than they might otherwise have been in a healthy economy with a more certain job market awaiting them at the end of the tunnel.
The benefits of an alumni network
The more things change the more they stay the same, and the main attraction of an Executive MBA for most candidates remains the invaluable professional (and personal) links people forge in the course of their degree. Francis Petit says the value of the Executive MBA product is, and always has been, the people that candidates meet and the subsequent learning. When you combine dynamic faculty with unique, motivated and well-accomplished classmates, the recipe for learning is ripe. These types of programs not only build camaraderie and networking among the classmates but also self confidence, and allow each student to think in an entirely different way, he says. Overall, EMBA programs are a high impact, life changing experience because of the dynamic, accomplished and professionally diverse students and faculty that are assembled together for the duration of the program. That is the key value driver.
At some of the bigger programs, the numbers behind this value driver are astonishing, and it is easy to see how tempting they can seem. Francois Brown Coulston, French alumni club president of The University of Chicago Booth School of Business says alumni networks operate on various levels. First, you have the immediate network of all the students in your class. Then (in the case of Chicago Booth), you also have your international classmates in Singapore and Chicago. This is in addition to the larger network of 43,000 Chicago Booth alumni, and you'll also be part of the 140,000 strong University of Chicago alumni network too. The numbers can be overwhelming, so it's important to look at how accessible the network really is. Chicago Booth has local alumni clubs and societies as well as large global events. There's also a community database that students can access from home, says Brown Coulston. The network is therefore accessible on a home, local and global level. It's easy to search for alumni based on a certain industry, geography or company - and all the contact information is listed at the touch of a button, he says.
IE Business School, for example, also offers an expansive network with 80 alumni clubs spanning over 85 countries. The IE Alumni network is a powerful resource for alumni to obtain feedback and mentoring, access to new business circles and investors and introductions to recruiters in top companies worldwide. EMBA graduates also make good use of networks and groups within LinkedIn, says Kerry Parke, Associate Director of Communications at IE Business School.
Indeed, social networking has become the norm, as more and more EMBA participants use tools such as LinkedIn and Facebook to create communities, not just networks. In recession time, when the career market stiffens and both lateral and upward movement becomes more difficult, these alumni networks serve an even more important potential role for the EMBA candidate. Emory's Joan C Coonrod, Assistant Dean of EMBA Admissions & Marketing puts the point succinctly, when she says: connections, support, business and personal relationships -- one alumnus describes it as 'access to a brain-trust---for life!
Programs change in response to financial crisis
The crisis has affected a change in what students ultimately want from their EMBA degree. As Mayalène Crossley, Business Development Director at ENPC, Paris says: whereas many Executive MBA graduates were interested in the increased earning potential of an MBA degree, now they are increasingly motivated by a desire to evolve both personally and professionally, and often to change professions slightly or even significantly. The EMBA does help many graduates break through glass ceilings but it also helps many graduates to capitalize on their professional and life experiences and open the door to new opportunities in their local markets or internationally.
When EMBA candidates start expecting different things from universities, it seems the programs themselves change. While EMBA's still emphasize their desire to improve their strategic thinking and leadership skills, we [Emory] are also seeing more emphasis on improving their 'marketability' both within their organizations and within their industries, says Joan C Coonrod. This means the ability to analyze and act -- to make decisions and lead others in the process of decision making -- is of the utmost importance.
Coonrod says as important as it is to provide strategic leadership, it is equally important to bring execution skills to the table. Add to that the ability to deal with the dynamics of a complex global marketplace, and you have the environment that today's EMBAs are facing. They know they must bring value to their organizations every day and the EMBA curriculum is designed to provide this type of immediate impact and Return on Investment (ROI), she says.
Other schools have responded to students' new priorities, and the abuses that led to the recent recession, by returning to business basics.
Francois Brown Coulston says when there is a lot of uncertainty in the market place, and situations arise that have never been faced before, it is essential for managers to use proven frameworks based on fundamentals. The fundamentals of business remain the same, regardless of new developments in the markets, and we believe that good MBA programs should continue to focus on solid foundations in the fundamentals of data analysis, creative thinking and decision-making, he says. At the University of Chicago Booth School of Business, we focus on fundamentals to avoid chasing fleeting fads, thus allowing our graduates to sift through all the noise. With these skills, executives will be able to capitalize on new technologies and properly evaluate opportunities in new growth areas, wherever they may lie.
Much has been made in the press of the move towards CSR and ethical business practices, innovation and strategy, as well as leadership and soft skills: over the past couple of years, many EMBA programs have shifted their focus towards these subjects. However, there is also another, less-talked about effect of recent uncertainty - the move towards entrepreneurship. As EMBA candidates become less and less sure about their longterm prospects with their present companies, many are hoping to acquire the skills that will allow them to strike out on their own. We are currently seeing continued high interest in our Entrepreneurship and New Venture Creation module, says Rachel Killian at Warwick Business School. There have always been a significant number of Executive MBA students interested in setting up their own business at some point in the future. However, the current economic crisis has resulted in an increase in registrations; students are now keen to ensure they are prepared with a back-up plan in place in case employment prospects do not improve, she says.
Participants often have to carry out a consulting project which accounts for a large portion of their evaluation to obtain the degree, and many choose to focus on entrepreneurial endeavours or life-changing ventures. Lindsey Nefesh-Clarke graduated with her Executive MBA from ESCP Europe in Paris, and took the opportunity to launch Women's Worldwide Web, an online philanthropy platform dedicated to women's empowerment through microfinance, education, mentoring and networking. The EMBA enabled me to develop a refined toolset (of both hard and soft skills), as well as the self-confidence and the sense of the possibilities of management and leadership necessary to embrace this ambitious social venture, says Lindsey.
The (permanent) move away from corporate sponsorship
Fordham's Francis Petit sees the present shift away from corporate sponsorship as an bunchangeable trend. I believe the Executive MBA industry will experience a major shift in the next few years. The reason behind this shift is the dramatic changes in corporate financial sponsorship over the past 15 years. Overall, the Executive MBA product was initially targeted at the 38 year old executive who did not have the luxury of time to pursue the MBA and needs it immediately without disrupting his/her career. The pricing strategy for such a product was originally predicated on the fact that universities would charge a premium and companies would fully sponsor their valued employees. Now that premise has changed and, in my opinion, never to fully return again. With that said, the industry will shift as a result and a new product will begin to evolve. Stay tuned to this space, to see what these new products will be.