Are Executive Education Courses a Wise Investment?
Evaluating the costs of an executive education course? We did too.
A couple of months ago, the husband mentioned that he had the chance to go for an executive management program at one of the top-3 business schools of the world (according to the FT rankings of MBA schools for 2018.)
Oh, boy, was I excited to hear about this opportunity? The joyous wave crested. Till he mentioned the fees. And then it crashed.
The cost of the course (including travel and stay) is roughly $25,000, which, the husband would be shelling out himself. Nope, his company is not sponsoring him for the program.
Pragmatic disbelief took over. Now, this is not a ‘small’ amount by any stretch of the imagination. He would be digging deep into his pockets.
So how are we going to be funding this amount? The short answer is from his savings. There is some money that we have been squirreling away from the monthly paycheck with a goal in mind.
For years we have been saving up to buy a larger house. Going for this program meant we were taking out a chunk of money from that kitty. Our dream of owning a larger house gets pushed back.
This got me thinking about how does one even justify the costs of these programs. In an ideal world, any investment is justified by the return on it (ROI). In this case, while the investment is known, there is no way to quantify the return. The decision is not objective.
Here are the considerations you could have while deciding whether an executive education program is worth it for you or not:
- The opportunity cost. What are you foregoing in order to avail this opportunity? In this case, the opportunity cost for us is the delay in buying a bigger house. Another way to look at the same thing is to figure out how long will you have to work to recover the cost?
- Executive education programs cost much more than regular programs, at comparable schools. Does the cost premium mean the product is also superior?
- What doors does it open for him in the short and long run? Does this program mean his next promotion comes in faster for him, thus shortening the time for which he has to work to pay for this program?
- Can he get his company to pay? Here is an article which tells you how you can justify the need to your boss.
psssst. Want to read this article again? PIN this image now and come back to it easily.
Why is executive education so expensive?
Executive education programs are a great source of revenue for Universities. Take Harvard. The revenue generated from continuing and executive education nearly doubled in ten years from the fiscal year 2006 (roughly $170 million) to the fiscal year 2016 ($381 million).
For some Universities like Harvard where budgets have been constrained due to low endowment returns, this stream of revenue is promising.
The universities also deliver value to the students. The premium they charge is because they have an experienced audience that demands lessons which are rare and offer a global perspective in an increasingly interconnected economy. These lessons are difficult and expensive.
Finding the faculty with real-life experience for meeting the expectations of this audience means hiring top-notch CEOs or the very best professors.
How Do You Justify The Premium Fees of Executive Education Courses
Executive education programs are often paid for by the companies. Business leaders and senior HR executives rely on executive education to fill in gaps in skill. These are a way to reward their best-performing employees while solving specific business challenges or meeting certain goals for themselves.
If that is not happening in your case (just like it is not happening for us) and you have got to shell out this amount yourself then how do you do so?
You get to learn from the best of the best
When else can you say that you have learned from Harvard or Wharton professors? The programs draw in best in the field from across the world because they know they have a demanding and experienced audience. Think of the value they will impart.
Learning in a classroom setting helps save you time.
For a busy executive, time is the most precious resource. Much of what you learn in an MBA becomes outdated in a few years time. Learning new skills and techniques can very well happen through experience and exposure. However, that takes a very long time.
You get to be part of an unbeatable network
Universities do a serious review of the people they take in for an executive education program. The applicants need to have an outstanding executive track record.
These programs offer an unbeatable opportunity to hobnob with the best in their field. They are even structured so. Right from living together in dormitories on the campus to group work being assigned continuously, these programs are designed to maximize the time to fraternize and rub shoulders with global peers. Formal dinners for networking are part of the deal.
The association formed continue after the program. Being a member of an exclusive club of senior executives or a niche LinkedIn group has its own benefits.
You get a large step-up in a competitive corporate world
Companies want executives who always strive to expand their knowledge base. An executive education program could make a difference while choosing between two candidates who are up for a promotion for a single position. An executive education program is an excellent (albeit expensive) way to show your commitment to learning and strive for excellence. These programs provide business professionals the means to advance their career development goals.
As for us, the cost of the course was a shock initially. But after a careful consideration of the benefits, we have made our decision. The husband is heading back-to-school for 10 days later this year.
Have any of you experienced a similar predicament where you had to choose between two investments – one in yourself and the other in a physical asset? How did you decide?
Photo by Jonathan Daniels on Unsplash