WSJ Article - Training Without a Campus

Training Without a Campus
Private Firms Educate Managers With More Tailored, Less Pricey Programs Article
By ALINA DIZIK

The pressure on corporate profits has left few cost areas on companies' budgets unscathed --
including executive education, the intensive training programs typically delivered by business
schools to select executives and managers.

Before budgets started tightening two years ago, companies were more willing to send star
managers to one-off executive-training programs on business-school campuses. Training budgets
ran into the hundreds of millions at large firms and big-name professors from top-notch schools
were often part of the courses, which could last several days or even weeks. The courses typically
focused on leadership development but did little to address company-specific problems.

These days, companies are looking for immediate impact and are keeping closer tabs on training,
reining in unnecessary programs, and turning to faster and more specific training to educate top
managers. "Companies are asking for external experts to come in and do something very
specific," says Josh Brand, a former senior director of executive education at Babson College and
co-founder of Freemont Learning Inc., an executive development firm in Lexington, Mass.

Tim Foley

Companies say they aren't doing away with executive education, but instead are doing more
training in-house and contracting out key pieces of executive development to private providers
like Development Dimensions International Inc. in Bridgeville, Pa., and Forum Corp. in Boston.
The shift is a result in part of cost-cutting efforts, but also of corporations looking for programs
closely tailored to their specific needs.

"Now the focus is more on how we move an organization forward," says Portia Mount, vice
president of marketing at the Center for Creative Leadership, or CCL, a leadership-development
organization in Greensboro, N.C.

While profits have been flat at most private executive-education consultancies this year, many of
those companies experienced strong growth prior to the downturn. With the exception of this year,
CCL has experienced annual revenue growth of 10% to 20% since 2002 and Development
Dimensions' executive-development program, which launched in 2004, already has trained 2,000
executives.

Executive-education consultancies are going the extra mile to quickly pull together custom
programs as a way to court companies and meet demand for company-specific executive training,
says Pat Galagan, executive editor at the American Society for Training and Development, a
Alexandria, Va., trade association for workplace learning professionals.

And Mr. Brand says that private training firms' pricing can be as much as 50% lower than that of a
business school. So while business has been flat at firms like CCL and Forum, some business
schools are reporting declines of 15% or more in executive-education revenues.

Many corporations are looking to provide employees with immediately applicable skills -- the sort
that can help them navigate the downturn. And that's something they say private education
providers can offer expediently. "When you have trained leaders in bad economic times, it makes
a world of difference," says Tim Bray, vice president and chief learning officer for Quintiles
Transnational Corp., a Durham, N.C., pharmaceutical-services company that hired Forum Corp. to
provide most of its senior-manager training programs several years ago.

Mr. Bray says he has shied away from sending employees to broader business-school courses
because executives now are focused on delving into company problems and the current economic
climate. "They see our balance sheet," he says. "They don't [need to] go to Wharton and see a
balance sheet."

Non-business-school providers are taking advantage of this need and marketing themselves partly
on their ability to customize courses by allowing company leaders to participate as teachers.
"Consulting firms tend to be more flexible than business schools," says Mr. Brand who has noticed
more employees collaborating with outside experts. Firms "are a little bit better at adjusting."

Many companies say that, aside from this flexibility, private executive-education providers go a
long way to maintain client relationships. Boston Scientific Corp. began a formal assessment of the
course offerings it had for employees several months ago. So far, Maria Van Parys, director of
global leadership and organization development, says she is impressed with the level of support
from private firms, compared with the business-school partnerships the company maintains for
some courses.

Recently an executive-training provider sent over extra instructors and spent hours going through
Boston Scientific's new orientation process. "The providers that we are selecting are really an
extension of ourselves," says Ms. Van Parys. The firm typically buys customized courses from the
American Management Association. The company is looking to team up with several more firms
for more customized, one-off courses.

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The need to coach managers abroad has sparked interest in the international reach of training
providers. Mr. Bray says training executives, who work out of Quintiles' 59 countries, without
requiring air travel is a priority. After considering various options last spring, the company hired
Forum Corp., which has nine global locations, to customize management courses for leaders in
emerging markets like Hungary and Indonesia. And Mr. Bray says that expenses are at least 30%
lower with a private firm than if the company went with a business school.

Budget-conscious managers also are attracted to the online offerings being created by non-school
providers, says Susan Dunn, a partner at Oliver Wyman, a New York consulting firm that offers
executive-leadership training. With more expense restrictions in the past few months, the firm's
leadership-development group started offering its Web-based courses -- traditionally targeted at
middle management -- to top-level executives to meet demand for programs that can be done
quickly and in the office.

Others are offering off-the-shelf and ready-to-use courses for firms that don't have formal training
efforts. CCL launched In-House Solutions, a series of courses for smaller companies that can be
taught by internal employees. The center, which started selling the courses in February, hopes to
attract clients looking for more training in a recession, but don't have the means to attend
courses. "Essentially, it's a do-it-yourself kit," says Ms. Mount. And another upside: Each course
costs about $1,000, 85% less than a regular on-site workshop.

Write to Alina Dizik at alina.dizik@dowjones.com