Back to B-school: CEOs are turning to custom-designed programs at top schools to educate the senior ranks

Chief Executive, The, July, 2004 by Jodi Schneider

Darden works with about 20 companies, many of which are repeat customers, in setting up custom programs. Often, Centini says, these companies are changing direction, seeking a new customer focus, for instance, or looking to improve the bench-strength of their management team. In training sessions, companies will often examine case studies on strategic business issues that managers focus on during the week, and they bring the solutions back to the company to implement. "Many of our programs really are about transformational change," says Centini. "How do they bring into the fold new lines of business or new managers and have as smooth a cultural transformation as possible?"

PepsiCo, the world's fourth-largest food and beverage company, has been working with the Darden School in developing customized executive training programs for several years. CEO Steve Reinemund, having received his MBA from Darden in 1978, began in 2002 by bringing 40 vice president-level executives to the Charlottesville campus annually for strategic and leadership development training. (The most recent round was held in late April.) The program is built around 17 leadership competencies, 10 of which are especially important for executives, focusing on such things as innovation and "change leadership." Case studies are presented. Reinemund is a huge supporter of the program; not only does he present at it--CEOs often kick off such programs--but he attends each of the sessions throughout the week. "They are blown away that Steve is there the entire week," says Paul Russell, PepsiCo's vice president of executive learning.

Though Russell calls it a "PepsiCo program," developed with Darden, the partnership between the school and the company provides executives with a better program than they would have developed on their own. "We've taken the best of what we do, and the best of what Darden does, and combined it to create a meaningful development experience for our leaders," says Reinemund.

Follow-up is extremely important for such programs, Centini and other program executives say, and PepsiCo has taken that advice to heart. "Steve is trying to build a community of leaders to keep them together so it's not a one-time deal," says Russell. The PepsiCo program has scheduled benchmarks: a follow-up six months after the session, a major conference call on a specific topic within a year to 18 months, and for the class of 2002, at the two-year mark, a follow-up session in London.

On-campus sessions have the benefit of helping establish a team of leaders, especially if they are geographically diverse or have differing strategic roles within the company, program executives say. "Our programs are designed to equip those leaders to go back to their units and be able to achieve the goals that the CEO and his or her top team have established," says Ethan Hanabury, associate dean for executive education at Columbia University's business school.

Such programs, though not intended as perks, can raise morale, particularly among up-and-coming executives, who enjoy access to corporate leaders they may not otherwise have. "They get the CFO for a whole day," says John Kenyon, senior vice president of engineering at Hughes Network Systems in Germantown, Md., which holds programs at the Smith School. He adds that on-campus training can communicate just how seriously the company takes the exercise. "If you send them to campus for a week, that says it's important," he says. "And they can't be interrupted."