The Transforming Corporate Education Environment: Comparing Competitive AdvantagesDavid Frayer | Director of Executive Programs at the Eli Broad College of Business, Michigan State University
The corporate education marketplace is incredibly lucrative, but immensely competitive. Within the market are numerous players—private organizations, consultancies, colleges, universities and more—leveraging their unique competitive advantages and jockeying for position to serve their client organizations. In the first installment of this two-part interview, David Frayer reflected on the impact alternative providers (corporate education providers from unaccredited organizations) have had on the makeup of the corporate training market. In this second installment, he shares his thoughts on the unique competitive advantages each provider brings to the table and discusses how the market may evolve over time.
The EvoLLLution (Evo): What are some of the unique competitive advantages that alternative providers have over colleges and universities?
David Frayer (DF): Alternative providers bring a few unique advantages to the table. The first is it may be easier for them to actually provide focused and deep resource coverage for individualized types of training, coaching, mentoring and skill development. Depending on the client organization and its structure, alternative providers can almost become an extension of the organization itself. While universities have some ability to do that, the depth of engagement organizations are looking for might go beyond what many universities are interested in and capable of doing.
Another advantage is that alternate providers also have an easier time aligning and developing specific tailored content to what their client organizations are looking for. Universities and their faculty bring deep knowledge and insight to the table, built over decades of research and consulting in a given profession. So when an organization and a university differ in their approaches—for instance, the organization may use different vocabulary to describe a concept—those little subtleties are really challenging for universities to deal with. After all, we pride ourselves at universities on attaching very specific meaning to words, based on years of intensive research.
A third advantage is their ability to bridge the gap between theory and popular business practice. As we all know, business tends to run on fads and there are huge fads in the training and professional development space. Universities tend to be a little more resistant to fads and base more of their research on identifying long-term trends, while some alternative providers actually embrace the fads and use them to their advantage. The “freshness” of new ideas can be very alluring, but not if the idea doesn’t actually work in practice or, in some cases, if every challenge has to be viewed through a specific lens. This second issue is commonplace in business. For example, Six Sigma is a phenomenal concept that many companies over-embraced. It went from being a mindset and part of a tool kit to being the answer for every problem in an organization. Suddenly, every single issue became a Six Sigma Green Belt or Black Belt project, when in reality the vast majority of those projects did not need to move down the Six Sigma methodology. Now, a few years later, a lot of companies are pulling back and rebalancing the role that Six Sigma methodologies have in their organizations. While new, exciting concepts are great for driving interest and commitment in educational programs, it is possible to carry them to extremes to the detriment of an organization.
A final advantage is that alternative providers often focus on practical solutions that have worked in other organizations, creating instant credibility and comfort among corporate human resource managers. This can result in matching the competition instead of forging new ground through unique solutions that drive outcomes and competitive advantage.
Evo: Conversely, what competitive advantages do higher education institutions have over alternative providers when it comes to the delivery of professional development and executive education?
DF: There are a couple of significant advantages colleges and universities have in the professional education market, and many of them are fairly obvious. The first, at least coming from the perspective of a tier-one research institution, is our research mission and the fact that the things we tend to embed in our executive education programming are deep, research-driven insights coming from faculty. We don’t bend easily to business fads, and our offerings are built on that research-driven knowledge. That’s probably the biggest competitive advantage that comes from university-based professional education. That’s not to say that alternative providers don’t do research, because they do, but they tend to do very applied, descriptive research. Applied descriptive research can certainly give you some insights, but it doesn’t necessarily help with identifying causality, which is what so many businesses are seeking. This is so important to organizations that are trying to formulate, develop and apply their own strategies. They need to understand leading edge thinking and industry trends to adapt to their own specific environment. When universities encounter this organizational environment, their work is unrivaled.
A second advantage is—especially from a business school standpoint—the capacity to bring the full university to bear for an organization. Because we’re embedded in a broad institution, we can incorporate lots of interdisciplinary expertise. That cross-disciplinary orientation is driving research today, and it’s becoming increasingly clear that interdisciplinary thinking creates the perfect storm of expertise that drives broad solutions, addressing core issues rather than symptoms. Alternative providers may be more challenged at that interdisciplinary level—they may have deep expertise in a particular area but it may be harder for them to combine broad expertise from business areas, technical areas, hard sciences and other areas.
A third advantage is that university providers have independence. I use that term quite specifically because I think one of the challenges, as you try and align professional development with the internal training and development mission of an organization, is the tendency to acquiesce to organizational preferences. Unfortunately, in some cases, organizations try to promote a philosophy or methodology that research shows to be less effective. Alternative providers, who may be very dependent on the revenue stream from a client, may get locked into moving down that pathway. The higher education institution, on the other hand, has the independence that should allow us to point out the issues with the organizational perspective. That independence also provides an institution the fortitude to say to the organization, “We can’t support going down that pathway because our research and experience indicates it’s not in the best interest of your organization.” In an academic environment, we have the ability to deliver that message in an effort to change the organizational mindset, but we also have the ability to walk away.
Another advantage, which is perhaps less obvious from a university standpoint, is the ability to really cross-pollinate thinking from across multiple engagements and across multiple organizations, bringing expertise from numerous faculty and disciplines to the table. This ability to try and keep a bigger, more holistic picture available for employers can be beneficial for the employer, and for the institution as well. Additionally, universities’ ability to support networking and benchmarking across the client base is another advantage higher education institutions can bring to the table.
Finally, the ability for universities to facilitate other types of connections that can be a value to an organization is a competitive advantage. At Michigan State, we often talk about working with folks throughout their lifetime and finding ways to support individuals or organizations with an entire lifecycle of talent development. Whether it’s degrees or individual offerings, certificate programs, or recruitment, we really have the ability to support organizations and individuals throughout their lifecycle and, for individuals, throughout their overall lifetime.
Evo: Do you think, as this marketplace evolves, the opportunity for formal partnerships between universities and alternative providers will create that additional layer of competitive advantage for an institution trying to stand out in the corporate learning space?
DF: Collaboration and partnership is ultimately what’s needed, but the form that collaboration will or could take is what’s less clear to me. I presented a possible collaborative model in the last question that could be uniquely marketed to organizations. That formalized multi-provider partnership is a model that’s actually being practiced today. At Michigan State, we have a number of organizations with whom we have regular relationships and multiple educational engagements. That form of relationship is powerful because you can invest the time and effort to get to know each other over time and create a culture where the pieces fit together strongly. It’s also possible that, on the demand side, client organizations who work with three or four different service providers may find it in their best interest to bring those specific relationships together to create the optimal kind of solution for them.
The long-term answer will probably see a little bit of both. Training providers will have some standing partners with complementary skill sets. They will also need to have an openness and a willingness to be party to different types of partnerships over time as situations present themselves. The skill sets required to engage in these two different approaches are different and it’s going to be interesting to watch this market unfold.
This interview has been edited for length and clarity.