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Be a great manager: the benefits of executive education.

After she completed an executive training program at the University of Southern California, Lucia Soh, then a manager at a financial services company, had one reaction to what she had learned: "I can use this," she concluded. "This is real." This article explains how both corporate and practice leaders can benefit from similar programs, which enable them to share common issues and develop or reinforce strong business management skills.


Executive education--courses designed to provide experienced professionals with additional management training--is a booming business. When BusinessWeek surveyed companies in 2005 about their use of executive education programs, it found "the companies sent more than 21,000 employees to courses and spent hundreds of millions of dollars at business schools and non-university-affiliated organizations." (You can read the article at content/05_43/b3956901.htm.)

According to the article, executive education programs across the country are growing rapidly and now play a strategic role they never had before. As an example, Tony Macari, assistant dean at New York University's School of Continuing and Professional Education, told the JofA that some of the school's finance-related continuing education programs, particularly in accounting and forensic accounting, have experienced double-digit growth in recent years.


What do participants get out of this training? According to Mark Wilbur, associate dean, Marshall School of Business at the University of Southern California in Los Angeles, the school's executive education programs have two goals: to give students practical knowledge they can apply immediately as well as a broader business context to help them make better informed decisions on the job.

Executive education programs can be customized or open. In customized programs, the school works with a company or firm to design training that will meet its specific needs. Open programs offer a range of courses that typically are available to anyone. While executive education shouldn't be confused with the continuing education courses and conferences many CPAs attend, most programs do enable accountants to earn CPE credits.

Soh, who now is director of physician leadership and performance at Kaiser Permanente in Pasadena, Calif., had participated in an eight-week midlevel program customized for her former employer. The training covered five topics--strategy, communications, finance, knowledge management and change management.

"Participating with other people from my company helped open my eyes to how the bigger decisions were being made," she says. The participants, all drawn from the company's management team, started out learning broad principles in each area, then considered together how they might apply them within their own organization.

Such programs can offer participants not only textbook training but also insights into their own personalities and work styles. In one exercise during Soh's USC training, for example, the facilitator handed out chips randomly to participants. By swapping with other students, they had to collect a specific set of chips individually and as members of a team. Forced to create strategies and to negotiate--while being videotaped--each person gained perspective on his or her approach to a challenge. "The idea wasn't to change our behavior, but to create self-awareness," Soh says.

Open programs, such as those offered at NYU's continuing education division and other schools around the country, are designed for individuals looking to advance their careers. Students can take single classes or a series of courses that might lead to a certificate. Students may be gearing up for further graduate studies, preparing for a licensing exam or earning a certificate that demonstrates knowledge in a particular field. "People are seeking upward mobility or a career change," according to Joe Bittner, NYU's senior director, business and finance programs.

One advantage of open programs is that courses typically are taught by adjunct faculty with hands-on experience in their disciplines. Bittner says, "If you're trying to teach people transferable skills, it's good to have someone with real-world experience in the field. Business people aren't interested just in the latest theory, but rather how to apply it. They don't want a pure textbook approach."


NYU's Macari points out that open courses are more intensive and typically run for several weeks, providing greater depth than a one-day or half-day format. Although the programs are designed to be convenient for busy professionals, participants do have to invest time to get something meaningful out of them. "If it sounds too good to be true, it probably is," he says.

It's also important for executives to ensure a course's approach is up to date. "A lot of programs haven't changed in 25 years," Wilbur says. "You should carefully scrutinize course descriptions to see if they touch on current realities." He says program designers are aware of the demands of their market. "Our students are the toughest customers in the world. They're working full time and don't want to waste time," he says. "They want to learn something they can apply today."

In Soh's view, a school's reputation also is an important factor to consider and she offers this advice on how to evaluate this intangible:

* Consider the variety of classes and programs available. Custom programs should include learning materials on core topics such as strategy, finance and communication that the company can examine in advance. Also look at the school's ability to customize new topics at a minimal cost.

* Find out what other organizations the school works with and how long they have used their programs.

* Look at faculty credentials and their willingness to customize programs to the company's industry.

* Look for learning experiences that go beyond the traditional classroom. USC, for example, has an experiential lab that allows participants to see their own behavior as they interact with others and make decisions.


For some companies, the bottom line on executive education is whether it's worth the tuition and travel costs and what impact the executive's attendance at the program has on both individual and organizational success. CFOs can take a hard line and calculate the benefits using a formula like this one suggested by the Columbia University Business School:

ROI (%) = Net program benefits x 100/ Program costs

Columbia says net program benefits represent the results of one business challenge the company deals with successfully using knowledge the executive gained while attending the program while program costs are one-twelfth of the attendee's salary, plus travel expenses and program fees.

But some company decision makers also take a less structured approach to evaluating program benefits. A study by Ashridge Business School in Great Britain for the International University Consortium for Executive Education revealed only a small minority of organizations regularly evaluate programs beyond obtaining participant reactions; only 11% evaluate executive education at the organizational level and only 3% regularly assess ROI.

Given the diversity of practice today, companies have to develop the evaluation method that works best for them in deciding how to spend their executive education dollars. The value proposition of executive management education is well-established; the goal for companies now is to get the training that is best for their managers.

RELATED ARTICLE: Case study: real-world problems tackled.

Executive education students seek a real-life context for their instruction: This classroom exercise is based on a case study prepared by Professor Kenneth Al Merchant, Marshall School of Business, University of Southern California, for use in USC's executive education program.

The year 2005 was a good one for the General Products Division (GPD) of Altman Industries Inc., a large industrial products manufacturer. Sales and profits in the division were significantly above plan, due largely to unexpectedly brisk sales of a new product introduced at the end of 2004. The good fortune induced Robert Standish, the GPD general manager, to think about how he could save some of the profits for periods in which he might need them more.

Standish believed GPD's plan for 2006 would be tough to achieve because the corporation as a whole was not doing well and the parent company's managers would expect GPD to show growth beyond 2005'S abnormally high sales and profit levels. Already in September he was sure his division's profit would exceed the level above which no additional bonuses would be awarded for higher performance--120% of plan--and he wanted to save some of 2005's profits so he could report them in a year in which they would augment his bonus and those of his direct reports.

Standish asked his staff to do what it could before the end of the year to "stash some acorns" he could use in future years. He suggested that Joanne Morgan, his controller, start preparing some pessimistic scenarios he could use to justify creating additional reserves and start thinking about how expenses could be accelerated and revenues deferred at yearend.

Morgan was uncomfortable with her boss's instructions and reminded him that company accounting policies included a statement that assets and reserves should be fairly reported based on the existing facts and circumstances and not used to manage income. Furthermore, because of continuing order declines, the parent company was looking for ways to report higher, not lower, profits in the current year. If the situation did not turn around quickly, layoffs were threatened.

Standish explained that GPD would still be reporting very high profits. He just wanted to save a portion of the excess above plan. In any case, he reasoned, GPD couldn't help overall profits much because it was so small in comparison with the entire corporation.

Student Discussion Questions

1. Do you approve of Robert Standish's actions? Are they smart from the perspective of the division? From the perspective of the corporation?

2. Are his actions ethical?

3. Should Joanne Morgan tell anyone of Standish's request?

RELATED ARTICLE: Executive education customized for CPAs.

The AICPA has created two executive education programs in conjunction with the University of Southern California Marshall School of Business in Los Angeles. The programs are customized for executives in business and public practice. They focus on strategic planning, communication and leadership skills and offer participants a chance to return to a campus environment and benefit from a renowned faculty with real-world experience. Class size is limited and the programs are intensive, in-depth and interactive. The highly participatory and dynamic learning environment uses case studies, current business models, experiential exercises and a team approach.

Upcoming program dates are

* July 12-4, AICPA/USC Executive Education: Financial Executives Program.

* July 19-21, AICPA/USC Executive Education: Public Practice Program.

Registration fees are $2,495 for AICPA members and $2,995 for nonmembers. Those who register for the financial executives program by June 7 or for the public practice program by June 14 can save $200. For more information, call 888-777-7077 or visit

RELATED ARTICLE: What participants learn from executive education.

* Practical knowledge they can apply immediately.

* How to make better informed decisions on the job.

* Management expertise frequently tailored to their specific company's needs.

* What process managers at all levels use to make decisions.

Anita Dennis is a freelance writer and Journal of Accountancy contributing editor. Her e-mail address is
COPYRIGHT 2006 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Dennis, Anita
Publication:Journal of Accountancy
Date:May 1, 2006
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