UNICON 2007 Fall Conference The Newcomers Workshop

1. UNICON2007 Fall ConferenceThe Newcomers Workshop November 27, 2007 Bob Stilliard Steve LaCivita Ashridge University of Chicago

2. Welcome and Introductions Outline of Presentation • UNICON: Your Professional Resource • The Executive Education Business • The Executive Education Marketplace • Strategic Framework and How We Compete • Group Discussion/Questions • Why am I attending the conference? • What do I want to learn? • How do the answers to those questions relate to my job challenges?

3. UNICONWho We Are • The International University Consortium for Executive Education • Worldwide – 84 Academic institutions • Non-degree Programs / Services • Volunteer

4. UNICONHow We Work • Board – 6 Year term • Exec Committee – Chairman / Vice Chair / Former Chair • Committees  Benchmarking  Finance  Board Continuity  Membership  Conference  Communications  Research

5. UNICONCore Values • Collaboration • Openness • Mutual respect • Community of practice • Knowledge • Creating the base for sharing • Conducting research • Service • Devoted to the university sector • Developing useful products

6. The Executive Education “Business” Typical School Objectives • To meet the needs of corporate customers. • To enhance the school’s general awareness and expand its corporate relationships. • To provide a vehicle for enhancing the school’s reputation. • To provide a forum for the dissemination of information on new research findings. • To provide faculty an additional source of income. • To make a financial contribution. 5

7. The Executive Education Business: Some criteria for success • Does the faculty deliver high impact ideas? • Does the quality of teaching live up to expectations? • Are faculty members at the leading edge of knowledge in their fields? • Are faculty members curious about the knowledge participants bring into the classroom and their particular business situations? • Was the level of the participants appropriate for the content? • Is the return on investment worth the money spent and time away from the job and family? • Executives seek a compelling reason to attend. 6

8. The Executive Education Marketplace:Customer Expectations of Business Schools • Tomorrow’s knowledge today • “continuous access to cutting edge thought and research” • Targeted messages • “an investment in learning about my industry and my company” • Increased organizational capability • “teaching that bridges theory and practice” • Integrated learning • “a holistic approach—from strategy to execution” • Partnership • “a relationship through which we can drive growth—personal and business” • Network of resources • “a group of exceptionally smart faculty, students, staff and alumni that I can rely on to get the information I need to run my business” • Full service environment • “a place apart to recreate the sense of the possible” • Value for money • “a positive return on our investment”

9. The Executive Education Marketplace:Strategic Management Development Issues • Creating unity and alignment • Increasing bench strength • Achieving responsible growth • Integrating executive development and HR systems • Developing business acumen and leadership skills

10. Market growth From open to custom to partnership More “action learning” Executives as teachers Use of coaches Shorter programs More flexibility Need to accelerate quality improvements Systems approach to executive development Companies reducing the number of suppliers Expectation of measurable bottom line impact Value vs. price The Executive Education Marketplace:We Live in our Clients’ World, Too!

11. Executive education in the Wider Business Education Market Four segments • Undergraduate • MBA/Masters • Executive education • One-to-one So how does executive education relate to the others?

12. Age Educational Philosophy Purpose Class Size Faculty Faculty Drivers Audience Success Teaching Style Setting Food Undergraduate 20 Content Judgement/Maturing/Job Up to 600 Professor Peer to peer research Individual Entertainment Lecture Concrete Cardboard Source: Peters/Ridderstrale (2006)

13. Age Educational Philosophy Purpose Class Size Faculty Faculty Drivers Audience Success Teaching Style Setting Food Undergraduate 20 Content Judgement/Maturing/Job Up to 600 Professor Peer to peer research Individual Entertainment Lecture Concrete Cardboard MBA/Masters -28- Integration Job 75 Practical Professor or Professor of Practice P2P Research or Professional Journals Individual Entertainment Case Studies Concrete++ Cardboard + fruit Source: Peters/Ridderstrale (2006)

14. Age Educational Philosophy Purpose Class Size Faculty Faculty Drivers Audience Success Teaching Style Setting Food Executive Education 35 Action Career Progress 30 Professor of Practiceor Practical Professor Client Satisfaction/ Business Impact Organisation Impact Live Cases Luxury 4 star Source: Peters/Ridderstrale (2006)

15. Age Educational Philosophy Purpose Class Size Faculty Faculty Drivers Audience Success Teaching Style Setting Food Executive Education 35 Action Career Progress 30 Professor of Practiceor Practical Professor Client Satisfaction/ Business Impact Organisation Impact Live Cases Luxury 4 star One-to-one 45+ Reflection Making Choices 1 Psychologist with Business insight Business Impact Organisation via the Individual Results Dialogue Luxury Caviar Source: Peters/Ridderstrale (2006)

16. Research Teaching Institution Orientation Open Enrollment Custom Program Types Offered Low High Exec Ed Degree of Independence from rest of B-School Senior Tenured Adjunct Teaching Faculty Part of Normal Teaching Requirement Paid for All Faculty Compensation For Exec Ed Teaching The Exec Ed ContinuumWhere Does Your School Fit?

17. Global Large Public Wide Industry Range Senior Exec Regional Mid Mkt/Small Cap Private Targeted Industry Focus Junior Exec/ Middle Manager Participant Mix Company Mix High Involvement Low Involvement Faculty Involvement (program design, administration, etc.) EE Operated Faculty Driven Market Driven Not Provided New Program Development Residential and Teaching Facilities The Exec Ed ContinuumWhere Does Your School Fit? Additions to the list?

18. The Two Most Important Cost Curves in our Business • Scale (Economies of Scale) efficiency • Scope (The Learning Curve) effectiveness

19. In custom executive education, what is the basic unit of goods or services that we have to sale?

20. In open enrollment executive education, what is the basic unit of goods or services that we have to sale?

21. The Executive Education Basic Profit Model- Open Enrollment • Profit = Revenue – Costs • Revenue = Price x Quantity • Quantity = Instruction days x Participants = Paid Days of Instruction (PDIs) * High fixed cost model

23. What’s the size of the Executive Education Market? A. $ 466 billion B. $66 billion C. $16 billion D. $ 2 billion

24. If the executive education industry size in revenue is $66 billion Then this is the approximate Market share for university-based programs

25. A Strategic Framework: Porter’s Five Competitive Forces Modified for Executive Education Potential Entrants • Consulting firms • Loosely organized high performance teams—Superstars, general faculty/tenure op-outs and wash outs/consultants • Major Corporations—backwards integration Suppliers–Talent Buyers The Executive Education Industry Open Enrollment Programs • • Business School Faculty • • Consultants/Senior • Executives • • Tenure opt-outs/washouts • • Material Developers • - Case producer • - Video, Audio, Simulation • - Software • - Text publishers Buying Centers within Major Multi-National Corporations • Fortune 1000 - Service - Industrial - International • Association / Consultants Short SeminarPrograms less than 1 week Functional & Mgmt. Dev.Programs 1-3 weeks General ManagementPrograms 4 weeksor longer • Associations • Business & Trade Journals • Private Firms • Handful of Universities • Mostly Business School • Some Associations • Some Private Firms • Predominately Business Schools • Some Associations • Some Private Firms Consortium Programs Custom Programs • Corporate. Development Staffs• Business Schools • Private Firms• Individual Consultants Rivalry Among Existing Firms / Organizations Potential Substitutes • Internet courses• CD Rom • Interactive video• Teleconferencing courses Non-Traditional Degree Program, Certificate Programs, In-house Corporate Programs

30. How We Compete—Core Competencies Discipline of Market Leaders ProductLeadership CustomerIntimacy OperationalExcellence • Quality / effective systems • Economies of scale • Reengineering processes • Operations • Business strategy / mix • Building and defending brand equity • Customer share versus market share • Anticipating customer needs • Senior Staff • Best in-class programs • World-class faculty • Superior customer value • relevant content • high pay back Faculty

31. MARKET / PRODUCT MATRIXAnoff’s model adjusted for executive education Current Products New Products PRODUCT DEVELOPMENT MARKET PENETRATION • Three to five new high potential public offerings per year • Three to five new multi-session custom programs • Modification of current programs • Aggressive marketing communications Current Markets MARKET DEVELOPMENT DIVERSIFICATION • • Video tapes • • Instruments and cases, etc. • • Software • • Distance learning • Coaching • • Global expansion • – Asia, Europe, Latin America • Association Programs • Other types of JVs New Markets

32. GE/ McKinsey Screening Grid(adjusted for executive education) Business Strengths Customer Satisfaction(based on a 5 point Lickert Scale) 4.5 or Higher 4.1 < 4.5 < 4.1 1 2 4 Protective Selectivity / Earnings > 40 Premium Invest / Grow Selective Invest / Grow 3 5 7 Challenge Invest / Grow Prime Selectivity / Earnings Market Attractiveness Restructure/ Harvest Demand(based on average enrollment per offering) 30 < 40 6 8 9 Opportunistic Harvest Opportunistic Selectivity / Earnings < 30 Harvest

33. New Program Matrix Selection By Topic/Theme Faculty Capability High Market Demand Med Low High Med Low

34. Congratulations!!!! You Survived Basic Training!