The ROI of executive education — do benefits outweigh costs?

The ROI of executive education is rarely measured, but that hasn’t stopped the courses from proliferating. Some are customized for specific companies, while others are open to students from many different employers. Business schools, consulting firms — all kinds of organizations develop and offer these courses to build business acumen and specific leadership skills.

Frankly, executive education is a real cash cow for many academic institutions. Corporations often shell out big bucks to send senior executives or high-potential leaders to prestigious exec ed programs. Other companies spend money to develop their own in-house programs. Some years ago, Motorola had such an extensive program that it was labelled “Motorola University.” Consulting firms also get in on the action, working with their corporate clients to develop educational offerings.

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The big question, of course, is: “Is exec ed worth the investment?” Not too surprisingly, the answer is, “It depends.” I have seen exec ed courses that are so poorly designed they make we want to cry — boring, irrelevant, even silly sometimes. And I have also seen extraordinary exec ed offerings which transform the students and enable them to become much more effective leaders.

3 benefits of executive education

A recent article from my alma mater, The Ivey School of Business at Western University in Canada, explored three kinds of tangible benefits that result from a good exec ed program: 

• Solve real-world problems. Many exec ed programs include an “action learning” component, in which teams of students tackle important company challenges. They work together to understand the problem, gather data, and generate a recommendation, which they present to the company’s senior leadership team. The benefits from action learning projects include:

  • Building teamwork skills, often across different functions

  • Building time management and project management skills, because the students are working on the project in addition to their regular day jobs

  • Strengthening their analytic and problem-solving skills

  • Generating meaningful solutions to real problems

  • Gaining exposure to the senior leadership team

• Attract and retain talent. Investing in education for your leaders drives numerous benefits in the war for talent:

  • Branding your company as a desirable place to work

  • Filling gaps in your talent pipeline

  • Reducing costs associated with turnover and with finding and onboarding external hires

• Improve the bottom line. According to the Ivey article, companies that invest in learning opportunities for their employees deliver stock market returns five times greater than their less learning-oriented competitors by:

  • Building organizational resiliency

  • Encouraging innovation including new lines of revenue

  • Improving customer satisfaction 

Evaluating the ROI of executive education programs

How can you determine whether a specific executive education program will deliver an outstanding return on your investment? Here are some things to look for:

• Top-quality faculty

• A careful analysis of the leadership challenges and gaps in your organization, followed by a program specifically designed to address those gaps

• Modern, innovative approaches to the educational delivery that make the course material interesting and accessible to the students

• Built-in evaluation methodology to measure the impact of the program.

It’s clear: build your exec ed program properly and the returns can be extraordinary. Fail to do so and the whole thing may be nothing more than a waste of resources.

To learn more about how to identify the talent gaps and training potentials in your organization, email me at ggolden@gailgoldenconsulting.com.