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Panel: Do Business Schools Have and/or Build the Right Faculty to Meet the Future?

Event:
19th CEEMAN Annual Conference
Georgia - Tbilisi | 2011
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It is a pleasure to be here with you. I do not have a formal slide presentation. I am just going to share some thoughts with you informally. 

I think that we are better in meeting this panel question in degree education rather than in executive education. Within the latter, we are better in open programs than in custom programs. During this presentation, I will try to identify opportunities, mainly in terms of faculty selection and recruitment, nurturing of faculty, retaining faculty, and leveraging faculty as the scare resource that we work with. 

To provide context, let me say some words on the evolution of business school portfolios over the last 100 years. Typically, we started with degree programs, such as undergraduate or MBA programs. Quite soon, we saw a migration into open executive education programs. These types of business education programs have existed for close to 100 years. In-company programs, often called “customized education”, did not become a significant slice of the pie until the early 1980s. We have seen significant growth in this particular segment in the last 20-25 years. Today, we view undergraduate and MBA business education as relatively mature commodity products, and we tend to look for growth in executive education. 

Meanwhile, there have been significant structural changes, at least in my view, in executive education over the last 20 years. The first trigger was the global recession in 1991-1993. That was the deepest recession prior to the current one. In the wake of that recession, we saw a mindset change in terms of demand for executive education. Increasingly, we heard companies talk about return on investment or direct benefit to the company, rather than educating individuals. That was a major shift. 

There has been a second structural shock since 2008. As we entered the recession, demand for executive education, particularly in Europe, dropped sharply, roughly by 30 percent. In 2009 there was a balance between lowered overall demand for open programs and in-company programs. Many in-company programs were deferred: companies preferred not do those programs for cost reasons or for internal signaling – not good to fund programs when we are laying off so many employees. Three years into the recession, we have noticed that in-company demand has risen. In many schools today (particularly in the lower-priced program offerings), it is above the levels that we saw in 2007. 

Yet, open program enrollments are not increasing. What we see here is a structural change rather than something that we can attribute to the current recession. Companies (as in 1991-1993) are more focused today on direct company return on investment rather than personal employee development. Fewer companies are sponsoring employees for EMBA and other long open programs. 

We have also seen a shift within custom programs in terms of mandates or requirements. In the 1980s, we were doing mainly functional programs. In the aftermath of the 1991-1993 recession, we were dealing more with companyfocused change management programs. Also, there was a need to shorten the market demand time need to actual classroom delivery time. Speed of program design and delivery are becoming more important key success factors in our industry. 

As we moved into the mid-2000s, we got more involved in “catalyst programs”. These are typically programs in which we work with the most senior of the executives. Faculty play the roles of facilitators in these programs. We do not lecture and we do not really do consulting. We facilitate the process of getting senior business executive teams to reach decisions related largely to strategic choices and implementation requirements. 

What does this mean for faculty composition and selection? In custom programs, we tend to be overweight in leadership, change management, and strategy demand and requirements. We do not do much in accounting and finance or the other traditional functional areas. Increasingly, we need facilitation skills. Unfortunately, only a minority of our faculty are good facilitators. Great case teachers are often not great facilitators. It strikes me that when we recruit faculty, we do not take the need for faculty facilitation skills into account seriously. 

I think that schools with rigid departmental systems, particularly those that have slot systems (number targets by discipline), are compromised in their efforts to get faculty that can do custom education. It is a little bit like drafting athletes for a sports team. You can draft from need or you can draft the best person. With departmental systems, we tend to draft from need rather than select the best person available. I believe that if you hire great people, you will find demand for their services. Therefore, I prefer to draft not from need but on the basis of quality and potential to create demand for their services. 

I agree with Irina that we can do a better job in degree program designs. There should be more emphasis on business ethics, sustainability, and social networking. In a MBA program, these should be mandatory rather than elective courses.
The challenge in this respect is twofold. First, faculty supply in these areas is relatively small. Second, the emerging disciplines highlighted by Irina do not fit well into conventional departmental boxes. Departments, of course, will try to protect their historic faculty slot allotments. Business school leaders who can resolve this dilemma quickly and effectively will have a significant advantage in meeting future market demands in our industry sector.

I think also that we can do a better job at mentoring new faculty in order to accelerate their progression into executive education. Why not have young faculty sit in the classes of experienced teachers so that they can learn from that experience? Why not find good ways to compensate good teachers for mentoring the new faculty? What I mean by mentoring is more than the casual chat. I mean working intensively with new faculty on individual lesson designs, attending their classes, and providing feedback afterwards. 

We should recognize and reward relevant practice-based research more than we do today. We should also emphasize sharing of expertise and teaching materials between faculty members. I am concerned about the salary structure that we see at many schools. We hire new people at rates that are greater than those of more senior people. This is a market phenomenon and a market response but it is highly divisive. I advise you strongly not to get into that pattern. It works against faculty team-building. 

The typical starting point for schools that are moving into executive education is to pay separately for this. Typically, this is done at rates that are higher than the rates for teaching and doing other activities at the school. At IMD, contracts specify the number of units that a faculty member teaches during the year. Then, we offer to pay for additional teaching units but at a standard payment rate that applies to all faculty. We call this “buy back” because it was initially sold as a way to buy back time for faculty that they would otherwise devote to consulting that in our case, would require travel and cause other inconveniences. In my view, buy back will become more common in the future. It is typically less expensive than paying high rates for executive education faculty assignments. Schools who adopt this form of extra faculty compensation do not normally pay pension benefits on buy back; it is excluded from pension consideration. 

There are two risks with buyback plans, however. One is burnout, which happens if the faculty members are teaching too much. The other is a drop in their research activities. But I think that we can be clever even here. For example, we could provide additional faculty R&D support (internal funding, instead of direct payments, to faculty who accept teaching overloads to meet executive education demand). 

Custom education normally requires more facilitation and coaching. One question that I have here is whether we can recruit non-faculty professionals to do some of this work. I think we can. 

We can also gain leverage by sharing of teaching materials, including presentation materials. What this requires is a faculty team culture rather than a “me, me” culture. 

I think faculty members spend too much time doing administrative work. Do we need so many committees? Can more of that work be transferred from faculty to professional staff? 

In summary, I think that we are better positioned to meet future needs in degree education than in executive education, particularly in the area of custom-design programs, which is likely to be a major growth segment. Yet, I think that we have opportunities to improve our practices to meet these demands.
Event:
19th CEEMAN Annual Conference: Management Education in a Changing World: Are We Ready for the Challenge?
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Filmed:
September 2011
Published from:
October 2011
Citation:
Jim Ellert, Panel: Do Business Schools Have and/or Build the Right Faculty to Meet the Future?,
Accessed: October 21 2018,
Available at: http://video.ceeman.org/lectures/657/2011_ceemanac_tbilisi_ellert_dbshbrf
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