Corporate Education: How Much Will Your Dollars Get You?

By Marta Vago, Ph.D.

How, what, when, and where chief executives of small- to medium-size firms get the information and knowledge they need to move their businesses forward is a major challenge. They must carefully leverage the limited time and money they have available for educational purposes. Immersed in day-to-day operations, few have the luxury of participating in high-priced workshops that last for several days and may be held far away from their home base.

In my twenty-plus years of consulting to closely held and family businesses, I have found that most top decision makers are eager to upgrade their knowledge and skill level. However, too many are disappointed by what they get for the dollars and hours they spend on educational programs. Their negative experiences are due to: 1) unrealistic expectations; 2) little “trickle-down” effect in the organization; and 3) confusing education with consulting. Let’s examine each in turn.

Unrealistic expectations

Promoters of educational programs – including university-based extension courses – entice prospective registrants with more take-home value than they deliver. Regardless of the subject matter, there is only so much information that can be covered in so many hours. How much of that information can be translated into practice, is another question altogether.

Apart from enrolling in Executive MBA programs, few leaders of small- to-medium-size companies engage in on-going educational activities. For those who do, TEC (The Executive Committee) has been their resource of choice for over forty years. Monthly roundtables help CEOs increase their effectiveness through monthly executive round-tables, cutting-edge presentations, and one-to-one coaching.

No “trickle-down” effect

Most executive education programs target either top decision makers or key executives. Where these programs fall short is in helping executives to integrate – “push down” – their learning throughout the organization. Consequently, without “buy-in” at lower levels in the organization, little of what a company leader might try to accomplish is likely to succeed.

Most educational programs aimed at the business community take executives out of and away from their companies, even though it is inside their companies where executives must apply what they learn. There are some exceptions. The consulting teams of The Great Game of Business (based in St. Louis) utilize on-site education to include people at all levels of the organization, as well as to promote immediate application of new learning. Professional partnerships (in accounting, law, etc.) periodically bring in outside speakers to help with their meeting continuing education requirements of the profession. The TEC organization partially meets this challenge through its program for key executives and by rotating monthly roundtable meetings among the members’ places of work.

Education vs. consulting

Sometimes the CEOs and presidents of small- to mid-size companies expect educational programs to deliver the benefits of consulting services. They may be misled by over-reaching seminar descriptions. Or, they may not have used a consultant before. Whether or not the confusion between education and consulting is valid, most executives of closely-held firms tend to be leery of consultants who “don’t go away.” They worry that consultants foster client dependence by “giving them fish,” instead of “teaching them how to fish.”

It is true that top decision makers too often fail to apply or follow through on information and knowledge gained through the consulting process. However, it is also true that many consultants either underutilize or underestimate the power of educating their clients. When “fixing problems” is the premise shared by both sides of the consulting equation, the problems never seem to go away.

Clearly, many business and organizational problems can be solved only by engaging the services of expert consultants. However, there may well be other issues that can be addressed equally well by taking an educational approach. Issues relating to corporate governance is a good case in point.

Over the last two years, I have had some powerful results by taking an educational, rather than consulting, approach to helping CEOs and company presidents deal more effectively with their challanges regarding governance. Closely held and family firms are notorious for having “rubber stamp” board of directors or boards that exist on paper only. Over time, critical decisions regarding the future of the business are guaranteed to suffer. “Insiders’ myopia” can have disastrous consequences for the business and for the people who depend on it for their livelihood.

Founders/managers and owners/managers of closely held and family firms rarely understand the fundamentals of corporate governance or appreciate its critical role in ensuring the future success of their enterprise. Additionally, they are not likely to know which governance mechanisms that suit larger, publicly held companies may also be appropriate for smaller, privately held businesses. However, once a CEO and his management team are armed with basic tools they need to develop whatever governance structure would best serve the enterprise’s needs, they can take appropriate steps to ensure high-quality decision making at the corporate level.

Some company leaders elect to restructure their boards or comparable decision-making bodies on their own. Others may ask experts in governance to assist them in the process. Either way, a time-limited, in-house, customized educational program goes a long way toward improving the self- management capabilities of the company and its leadership – and at a price that virtually any company can afford.

In-house educational programs may well be the first – and possibly best – line of offense for company leaders who want continuing education to benefit their entire organization. As the late Dr. Eric Berne admonished psychiatrists almost fifty years ago, “therapy is for whatever you can’t solve through education.” Might the same principle apply to business consulting and corporate education, as well?

Marta Vago, Ph.D. is Professional-in-Residence of The Family and Closely Held Business Program, at The Anderson School at UCLA and Founder of the Family Business Advisory International.