Human Capital & Careers


Universities excel at executive education, but shortchange finance training.
Stephen BarrApril 1, 1997

The phenomenal growth of MBA programs has helped business schools create a vast and lucrative new market: executive education. The range of executive programs–from short seminars to full-fledged executive MBA offerings–bring universities $3 billion a year, experts estimate.

Revenues from executive programs fuel many business schools’ growth plans, and even their dreams of national repute. “When you look at the leading business schools, they all have superior executive-education programs,” says Noel “Bud” Robyn, who joined the University of Miami School of Business Administration in January as its first full-time director of executive education. “We wanted to get into the market, because our goal is to become a premier business school.” Its slick catalog rivals the brochures Miami produces for its football program, although most of the 19 business courses have never before been offered. The up-and-coming Fuqua School of Business at Duke University says it wants to double revenues over the next three years–to $20 million–to help fund new construction and faculty hires for Fuqua’s regular MBA program.

Clearly, though, business schools aren’t chasing finance executives for many of these dollars. “There’s not a lot out there for finance people, and what is out there is for people who have to know finance but don’t work in it,” says Steve LaCivita, who was director of marketing for the University of Michigan Business School’s executive programs for 13 years before becoming director of executive education last year at the University of Chicago’s Graduate School of Business.

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Indeed, a staple of most open-enrollment catalogs is “Finance for Nonfinance Executives,” whose title boldly declares that you-know-who need not apply. Such programs cost from several thousand dollars for five days to $9,000 for Harvard Business School’s two-week “Finance for Senior Executives.” The courses often offer substantial rewards for companies and their CFOs, by helping line managers or sales and marketing executives understand the profit-making machine their work supports. “These people know the business side,” says Steven Kaplan, who teaches one of these courses at Chicago, “but literally don’t know finance. They say that now they will know what the CFO is trying to tell them.” (Among Chicago’s two-day and three-day seminars: “The Basics of Derivative Products and Financial Engineering” and “Financial Forecasting and Decision Making.”)

Browsing B-school Web pages and several of the handful of available executive-education guides, CFO found that of 680 courses being offered at 32 American business schools, only 11.9 percent targeted finance managers or CFOs. Not only are the pickings slim, but the advanced courses that are available typically run only once or twice a year. At Michigan, for instance, the four advanced offerings that are directly relevant to finance executives will account for only 4.5 percent of the total number of classes taught.

Finance departments certainly offer some intriguing titles, such as Harvard’s “Driving Corporate Performance: From Scorekeeping to Strategy.” Still, with the role of the finance department expanding so rapidly at companies around the country, why aren’t more schools offering a range of courses aimed at drawing finance people back to school?

Some schools write the problem off to a lack of demand. The existence nationwide of “very few programs aimed at upgrading the finance department…tells you that that market isn’t there,” says Robert Mittelstaedt Jr., vice dean and director of executive education at the University of Pennsylvania’s Wharton School. Financial executives “tend to get focused on getting their jobs done,” he says, and save their finance educational pursuits for “narrower areas, like risk management,” that don’t lend themselves to open- enrollment.

There’s also a matter of security, says Edward Davis, director of corporate financial services at Colgate-Palmolive Co. Many companies don’t want finance people comparing notes with outsiders, and thus create in-house finance training, like Davis’s at Colgate. When Colgate does look outside for courses, it prefers those put on by its bankers and auditors. “They provide an ongoing education in the framework of a natural business relationship,” Davis says. “They are people who understand us and respect our confidences.” Such an approach also lets companies tie educational themes to current projects that would be impractical to simulate in an open-enrollment classroom–projects geared to upgrading understanding of the future of European foreign exchange, for instance.

“The advanced finance guys [on Wall Street] have their fingers on deals all day long,” says André Perold, head of Harvard’s finance department. “They can provide a very high level of education that’s very focused on specific deals.”

Norman Berman, head of executive programs at New York University’s Stern School of Business, says that only in New York is there a finance constituency broad enough to support a course load like his. “The majority of our executive courses involve advanced finance,” he says. “What you can emphasize is a function of the demand.” Stern also offers a rare executive MBA in finance.

But most companies from time to time would like their finance professionals to take a broader, more objective look at issues than the banks or accounting firms can provide. And if the goal includes exposing executives to the latest in academic thinking on a subject, and to people in similar situations at other companies, the off-the-shelf executive- education class may be just what the CFO ordered. Top universities know this.


While finance may not be a growth area at Wharton, for example, it still offers five finance-specific courses, including a very popular M&A program. And the deemphasis there also seems to reflect efforts at Wharton, with impeccable finance credentials already, to seek a broader audience among managers. Like other schools, Wharton expects to expand its offerings in leadership or general management– the kind of course finance executives often take when they get a promotion. Says Vice Dean Mittelstaedt, “The most important thing for CFOs to understand is that it is imperative to learn more about the rest of the business, so they don’t end up being just part of the overhead.”

When choosing from available programs, often heavily marketed by their schools, caution is definitely in order. No formal review process exists in academia or the corporate world for these programs. And Harvard’s Perold believes there is a weakness in the ability of most schools to teach high-level finance in the first place. “What does it take to put on a program in advanced finance?” Perold asks. “It’s a huge project. It requires, first, that you be at the state-of-the-art in finance, and second, that you be relevant.” Harvard maintains that its extensive work developing finance cases, and a top faculty, keep it finely tuned to the most demanding finance needs of business.

It also pays to ignore the often-considerable program marketing hype and read carefully what is actually being offered. Steve McCann, corporate controller of Service Merchandise Inc., a $4 billion retailer based in Brentwood, Tennessee, signed up in 1995 for a two-day course at Vanderbilt University’s Owen Graduate School of Management with the seductive title “The Changing Role of the Controller.” He was disappointed. “I was intrigued by the topic, because the business environment is changing, and expectations are for the controller to do more than manage historical results,” says McCann. What he got, though, “was more oriented to the old ways of thinking. It didn’t tell me anything I didn’t already know.”


Even when a program is satisfying, the reasons may have more to do with the classroom setting than the curriculum. Doug Nordstrom, vice president of planning and control at Warren, New Jersey, insurance giant Chubb & Son Inc., attended a two-week Financial Management Program at Stanford Business School in 1995, in search of information on creating shareholder value, global finance, and option theory. He got that–and had Nobel Prize winner William Sharpe as his option-logic guru. But even more memorable was his exposure to scores of attendees from as far away as Australia. “The strongest argument for taking open-enrollment classes is the contacts you make, and hearing about their approaches to various financial issues,” says Nordstrom.

While schools may disagree with Harvard’s Professor Perold about their ability to meet the advanced needs of finance professionals, they concede that there is a considerable challenge in staying relevant and at the same time offering worldly-wise executives something new. It’s a challenge that faces B- schools every time they offer the one-week or two-week courses that typically take a broad- brush approach to such advanced topics as shareholder value, performance metrics, or derivatives.

“We try to be responsive to things going on in the real world,” says Anjan Thakor, a University of Michigan professor who teaches a one-week “Corporate Financial Management” course that touches on performance metrics, for example. “Most people who come here have heard about [the topics] from consultants who have a vested interest in selling a product. This is a setting for discussing the pros and cons.”

In trying to popularize new courses, schools often must look at the latest finance fads and decide which ones are likely to last. The more targeted the subject matter, the smaller the potential market. But there’s also a danger in covering too much ground. “If you get too narrow or too broad, you don’t get a lot of people,” says Frank T. Morgan, director of executive programs at the University of North Carolina’s Kenan-Flagler Business School. Kenan-Flagler recently expanded its offerings to include courses on activity-based costing and shareholder-value concepts, “two new issues that get a lot of press and have a lot of people asking questions,” says Morgan.

Courses tying finance to other disciplines also can hit home. Wharton’s “Integrating Finance and Marketing: A Strategic Framework” aims to attract companies trying to heal the organizational rift between those two areas. “The whole idea is that CFOs pushing buttons to create shareholder value is an abstraction from reality if they don’t have a feel for marketing strategies, and don’t develop financial strategies that make sense to the other side of the house,” says Professor John Percival, who teaches the course with marketing professor Stewart Debruicker.

In contrast to Wharton, which has been building its nonfinance catalog, Northwestern University’s J.L. Kellogg School is expanding its executive finance programs, and changing frequently, to reinforce the message that its prowess isn’t solely in marketing. “If we stand still,” says Dean Donald Jacobs, the business-school competition is “going to trample us going by.”

Harvard, which offered the nation’s first executive program in 1945, has been bulking up in finance, too. “Historically we’re not known as a finance school, but we really are,” says Peter Tufano, an associate professor who teaches “Corporate Financial Engineering: Advancing Business Strategies.” Harvard broke its offerings up into shorter, more-targeted programs three years ago; another is “Creating Value through Corporate Restructuring.”

Among the future areas where demand may create marketable executive education programs, he suggests, are the integration of finance and information technology; financial modeling; and issues of disclosure, “as companies decide what’s meaningful to disclose without being competitively damaging.” Others see the M&A, derivatives, global finance, and investor relations areas catching on more broadly.


Some schools argue that quantity of finance programs, a top-notch reputation, or a Northeast campus aren’t the only requirements for teaching quality finance courses. “You see the less well-known schools hustling more,” says Charles Hickman, director of projects and services for the American Assembly of Collegiate Schools of Business, a business- school accreditation group, in St. Louis. Often, these programs tailor their offerings to regional needs to make going back to school more convenient for executives, and take a leading-edge approach to instruction.

The University of Tennessee started its Cost Management Institute in 1987 to teach advanced accounting concepts. “We can’t make our living on general management. We have to make our money making niches and being the best in the world at it,” says Jim Reeve, who teaches the popular three-day course.

At the Edwin L. Cox School of Business at Southern Methodist University, early efforts to run courses on general topics–keeping executives on campus for a week or more– “bombed,” says Robert Gardner, its director of executive development. The Dallas school has had more luck recently drawing on regional attendees to its two-day courses on the changing role of the controller. “Keeping the courses short and taking a more targeted approach to a particular audience has driven our success,” says Gardner. “We have to build our reputation by looking different.”

Of course, executive programs can rise or fall with the quality of the teacher, freshness of material, and relevance to a finance executive’s needs. “Whenever I’ve encountered academic research in the areas where I work, it’s so grounded in theory that there is often a problem in the assumptions that underlie the work,” says John Wilcox, chairman of Georgeson & Co., a New York­based investor relations firm. Wilcox was a member of a team of practitioners teaching investor relations at Emory University’s Goizueta Business School last year. “Academics and free-market theorists encourage a hands-off attitude toward the stock market. Many executives rely on the efficient market theory, and assume if they run the company, the stock price will take care of itself,” says Wilcox. “We try to educate them so they don’t just sit back and scratch their heads.”

When finance courses are both practical and provocative, they immediately pay off on the job, says Stuart Rogers, marketing controller for the U.S. subsidiary of Glaxo Wellcome Plc, the pharmaceuticals company based in Research Triangle Park, North Carolina. In 1993, when he was in a capital management position, Rogers took a five-day course at Virginia’s Darden School on evaluating capital projects, and found the lessons in the area of scenario- modeling quite useful. Today, he still uses the information he learned from Prof. Samuel E. Bodily in his current job, evaluating such marketing issues as product sampling and television ad campaigns. “The best part about the course was that it was not just a theoretical thing,” says Rogers.

As part of a new management development program at United Dominion Ltd., CFO Glenn Eisenberg has been scanning the B-school catalogs. He’s one of 30 executives that the company is targeting for executive education– as soon as he and others can identify the right courses for individual needs. The dizzying process has been going on for over a year. “There’s so much coming at you. And a lot of it looks really good,” says Eisenberg. In the absence of critical analyses of the programs, Eisenberg wants to develop a database that rates the quality of the courses United Dominion people take. That way, he says, the company will be less dependent on what the B-schools say about themselves. “We don’t want to be reactive to the literature we get in the mail,” he explains.

Don’t expect the results to be uniformly good, suggests Harvard’s Perold when asked about the attempt some schools make to find a niche in advanced finance education.

“Attempt is probably the right word,” he responds. Finance professors “would much prefer to teach advanced stuff,” he notes. But as for the ability of most schools to conduct successful programs, he says, “I just don’t think you can pull it off. You need faculty, and how many schools have faculty that can interact at [the CFO’s] level?”