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According to a study by education consultants Carrington Crisp, business schools account for one-fifth of the global corporate learning market.iStock

For business schools, disruption takes many forms: new competitors, online alternatives to classroom teaching and, not least, rising demand from employers for corporate training with bottom-line impact.

These disruptive forces are shaking up executive education, a key revenue stream for business schools that offer customized learning (with or without academic credentials) to industry clients.

For those hungry for a slice of the growing global training market, a recent report on the future of executive education paints a sobering picture of the stiff competition ahead.

“The arrival of new entrants in to the executive education marketplace, whether that’s consultants or technology-led providers, increase the pressure on business schools to craft programs that meet the specific needs of employers rather than simply taking a product off the shelf as a one-size-fits-all solution,” concludes the report by London-based education consultants Carrington Crisp, which worked with five business schools from Canada, Britain, the Middle East and Australia, including Sauder School of Business at the University of British Columbia and another Canadian school that wasn’t identified by the consultants.

The message for school leaders is “wake up and smell the coffee,” says Andrew Crisp, a co-founder of Carrington Crisp.

“We are seeing more and more of the consulting firms looking to do the consulting – and the training and development that goes alongside the solutions they offer,” he adds. According to the study, business schools account for one-fifth of the global corporate learning market.

Five years ago, he says, commercial firms embraced MOOCs (massive open online courses) as a disruptive force in higher education only to see the hype die down. Now, he says, the same companies are repurposing MOOC online content for the corporate market.

With new players in the market, Mr. Crisp asks: “Are [business] schools prepared to do the work to provide programs that are tailored to employers ... and can they really demonstrate the impact of these programs once they have been delivered? That is the bottom line for employers.”

A shortage of data on executive education trends prompted the University of British Columbia’s Sauder School of Business to join the international consortium that commissioned the report, says Bruce Wiesner, associate dean of executive education.

“There is a lot of anecdotal opinion ... but what we were really looking to do was to look at what the clients were actually saying to us, and what the numbers said about the things we are thinking about,” he says.

The study, which surveyed 270 mid-to-senior corporate managers responsible for learning and development, found one-quarter of them consider business schools as too theoretical and distant from real-world issues.

That criticism, says Mr. Wiesner, has “huge implications for business schools in terms of their need to be nimble, agile and to truly customize the [learning] solutions instead of taking a product off the shelf.”

Like others, Sauder aims to recruit relevant faculty from the outset in the design and delivery of a customized program for a client.

“We have found that the sooner we bring our faculty in – and that can be challenging and difficult – the value is tenfold,” says Mr. Wiesner. “That means competing against a lot of smaller, nimbler companies who are providing that approach naturally.”

As noted in the study, he says corporate clients increasingly seek assurance their investment in training and development is paying off, as measured by staff retention and other bottom-line results. “[Demand for evidence of] impact is overwhelmingly huge,” he says.

Some schools and clients are adopting new software tools to measure impact during, and months after, a training program.

“You need to embed coaching, you need to use learning assessments, you need to do return on investment [calculations] and assess impacts afterwards,” says Mr. Wiesner. “You use technology to enable the assessments of individual needs and responses to the program. You also need technology to measure return on investment impact.”

Despite increased competition, the study found that business schools “have advantages in program design, in market experience, in drawing expertise from other parts of [their] universities and in the corporate networks that they already play in.”

But the study authors also caution that business schools “will need to go further if they are to thrive and prosper in the future executive education marketplace.”

The study found that week-long executive retreats and in-classroom lectures are giving way to online learning, shorter-duration sessions and the use of micro-credentials, such as digital learning badges.

Increasingly, corporate clients prefer training delivered in classroom sessions that run one or two days at most, complemented by online learning for participants to learn at their own pace.

For example, Sauder offers more than 140 short-run open-enrolment programs, up from 100 about three years ago. In 2019, Sauder expects to offer 160 such courses for corporate clients.

“The cost of time seems to be at an all-time high,” says Mr. Wiesner.

He predicts that the looming disruptions in executive education will create “winners and losers,” but contends that business schools still have an edge given their unique capability to generate research and faculty expertise.

“It is how we deliver those [executive education] solutions that need to change,” he warns.

Follow Jennifer Lewington on Twitter @JenLewington or contact her at jlewington@bell.net.

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