Cheryl McManus’s work at Duke University’s Fuqua School of Business is academic–but not entirely so. The senior manager of finance and control for ABB Inc., based in Norwalk, Connecticut, has been collaborating this spring with three colleagues on a classroom assignment that has real-world implications for ABB: designing a financial model to help utility companies assess power-plant investments in the new era of international deregulation. Utilities are major customers of ABB, the U.S. arm of Zurich-based electrical-parts maker ABB Ltd.
“The whole purpose is to develop a business idea that can be implemented,” says McManus, who is among 41 high-potential managers selected by the company for the specialized executive-education session on the Durham, North Carolina, campus. They spent a week there in April, returned to their regular jobs at ABB, and will go back to Fuqua this month for another week.
McManus and her associates will finish their course with a full-blown presentation before both ABB president Howard Pierce and CFO Daniel Kuzmak, arguing the benefits to ABB from aiding utilities with their investment decisions.
“What we try to do at Fuqua is combine the theoretical with the practical,” says ABB treasurer Barry Wentworth, who teaches a finance segment in the three-year-old program. This year, ABB will spend $2 million on the courses.
For executive education–in the finance arena, and across the range of university-based trainings–companies like ABB are choosing custom programs much more often these days. Of the roughly $3 billion that U.S. businesses devote to executive education, more than 40 percent goes to such specialized offerings, a survey by CFO magazine indicates. And educators say corporate demand for that type of training is growing at a 25 percent annual clip.
The CFO survey, which included 34 university business schools, found that, on average, less than 30 percent of executive-education revenue had come from custom programs in 1993. At some–Fuqua, Indiana University, and Babson College among them–three-quarters of the revenue comes from custom programs. (See chart).
In many cases, the interest in custom education starts with the premise that all employees should understand more about corporate finance. Brunswick Corp., the Lake Forest, Illinois, maker of marine and recreational products, sent executives to its first finance and strategy course at Northwestern University’s Kellogg Graduate School of Management a decade ago. Today, Brunswick employees from all areas, including finance, travel to half a dozen business schools.
Microsoft Corp. began its venture into custom training last August, with a basic finance course that it designed with a University of Washington professor. Since then, Microsoft has developed an entire six-course custom curriculum, mainly for finance people, with the results reviewed by CFO Greg Maffei.
Perhaps surprisingly, a few of the best-known business schools are only now getting into the custom game, or are deliberately keeping their programs small. Some fear that custom programs will conflict with the consulting work of individual faculty members, while others haven’t wanted to take resources away from open-enrollment teaching. The Stern School of Business at New York University didn’t formally pursue custom business until last year. Stanford Business School claims only two custom clients. The University of Chicago’s Graduate School of Business limits clients to a small, boutique group with which the school can work closely. “My mission is to deliver a very targeted, focused, high-level custom program,” says Linda Ginzel, Chicago’s academic director of corporate education. “We don’t try to do volume.”