While classes were to be taught at Dell facilities around the world, the company decided that proximity to headquarters was a major factor in selecting a partner school. Partnering corporations often get involved deeply with the school’s development of the course content, and even pick the faculty members to teach specific classes, says Chantal Delys, assistant dean of executive education at UT’s graduate business school.
Dell’s classes teach senior finance executives, along with others on a selective basis, how to develop a business plan based on the criteria that matter most to the Dell executive committee, especially a balanced approach to capital, profitability, and liquidity. UT professors use as a case study the business plan that won the executive committee’s approval when Dell proposed its initial, wildly successful move into the low-cost PC market.
Mike Lazorik, a former Dell treasury staffer who is now a principal in Dell Ventures, the company’s new in-house venture capital division, loved to “work with professors who have expertise in theoretical finance,” and enjoyed their real-world case studies. “They’re able to give us the factors that the outside world is looking at to make the decisions,” he says.
Lazorik’s finance background allowed him to tune in to certain concepts — like the role of Dell’s primary internal metric, return on invested capital (ROIC). As he sees it, the teachers help students from all disciplines see Dell’s financial goals in a useful way, “which is where it ties back in with the Dell focus on ROIC.”
“Buy the Whole Chicken”
The courses introduce another healthy quality to training: a critical perspective beyond what students might expect from internal instructors. “UT can say, ‘OK, the model is great, and ROIC is a good thing, but there are some problems with ROIC,’” says Horner. “You have to understand what goes into it, including things like customer-satisfaction multipliers. UT can do that.”
The UT relationship with Dell is a full partnership in every way, right down to how the school is paid. “We want them to have a share of the risk, too,” says Horner. “We don’t pay them a flat fee; we pay them a share of the tuition.” The rate translates to about $1,000 per hour of courses — or an estimated total of $100,000 for the five classes held so far, attended by about 100 employees.
UT benefits if it creates popular courses that are repeated, and suffers if it fails to do so. Dell is planning to run the current course for executives several more times, at various sites in the United States, and in London.
Considering the premium paid for these partnerships, some experts question whether partnering with a university makes financial sense. Jonathan Schiff, executive director of the Finance Development & Training Institute, in Montvale, New Jersey, and an accounting professor at Fairleigh Dickinson University, says many companies can do the same thing cheaper by “cherry picking” one or two highly qualified professors on a private contract basis. “If all you want is the eggs, why buy the whole chicken?” he says. He notes that “academic linkage doesn’t mean increased productivity,” and suggests that, as for any training, corporations should test and quantify employees’ skills, and skill gaps, and turn to customers in the redesign of executive programs. “A lot of executives will come back from a class at Harvard and say they had a great time,” Schiff says. “But will it help them do their jobs better?”