A waste of money?

By Peter Walker for CNN

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(CNN) -- Apart from recruiting executives with an MBA or EMBA, companies around the world spend millions every year on management and leadership courses for existing employees.

Unfortunately, a report says, a lot of this money could well be going to waste.

A major survey of large companies around the UK found too much of what the report's authors called "muddled thinking," a commitment to training but with insufficient analysis of what it was actually supposed to achieve.

The two-part poll -- carried out by Oxford University's Saïd School of Business in association with other British business schools such as Cranfield and Warwick -- saw 500 senior managers, directors and human resources executives quizzed about their company's training.

The most significant finding was that while 61% of organizations put their staff through bespoke courses, only around a third of HR directors -- and just a fifth of other executives -- thought their current training and development schemes met corporate objectives.

With the market for individually-tailored business training in Britain worth around $225m a year, the report's authors calculated such poor planning added up to an annual wastage of about $140m.

"Over 40 years of experience have taught us that there are three factors that are crucial to developing an effective executive education program," said David Feeny, Director of Executive Education at the Saïd Business School.

"The program should address the right issue in the first place; it should be tailored precisely to the needs of the commissioning organization; and its success (or otherwise) should be properly evaluated.

"Our report suggests that most organizations are failing in at least one, if not all three of these respects."

Made to measure

Executive training is increasingly a bespoke affair, whether delivered by an outside organization such as a business school, or in-house, the survey found, with respondents saying they expected such individually-devised courses to be even more common in coming years.

The findings showed how organizations were seeing executive education as an integral part of their corporate strategy, Feeny said.

"This is a good thing, but it does raise the stakes: bespoke programs represent a significant financial investment and, as with any other investment, you expect a commensurate return," he said.

The survey indicated that in many cases, the return to the company was debatable.

While many respondents said that training had had a big impact on their personal effectiveness, they were notably less effusive in assessing its positive impact on their contribution to the company.

A significant proportion of human resources and training respondents "did not feel that their executive education strategy was currently meeting corporate objectives," Feeny noted, saying that one key problem was training programs not being properly thought out.

"Firstly, it is vital that organizations pick the right partner for the process," he said. "There are many different types of executive education provider, from universities and business schools to specialist training organizations and individual consultants.

"But to select a provider based on familiarity with a brand name or proximity to location is simply not good enough."

Additionally, the report questions the emphasis on teaching inspirational leadership, something identified as an important factor by 91% of respondents, as against just 11% who mentioned negotiation skills.

Leadership was useful, said Marshall Young, head of the Oxford Strategic Leadership Program, but should not be stressed at the expense of all else.

"Attempting to turn everyone in the organization into inspirational and energizing Henry Vs is not going to work," he said, referring to the English monarch immortalized by Shakespeare who led his troops to a famous victory over the French at the Battle of Agincourt in 1415.

"Not only is it difficult to train someone to be inspiring who is not naturally so," but also such people can lack other skills such as flexibility and an ability to collaborate, he added.

Overall, the report's authors conclude, while business leaders see training as important -- "like motherhood and apple pie, executive education can only be a good thing," they note -- too few are sufficiently rigorous in defining what they want from training, or measuring if it has been a success.

Executive education "needs to be taken much more seriously at every level," the report says.

"Organizations should not be opting for, say, leadership programs because it sounds good or because everyone else is doing the same."

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