Back to School for Money Moguls

They live in crowded eight-person rooming groups, have intensive classes more than three hours a day, encounter people from all nations and backgrounds, and even get homesick. Where they go to school, the male-female ratio is tilted strongly towards the male side. They learn plenty and make new friends.

But these people aren't bewildered freshmen, they're senior level executives. Instead of arriving at Harvard after several years at Andover or Philips-Exeter, they hail from Ford Motor Company, IBM, and General Motors.

The group, composed mostly of white men in their 40's and 50's who have had more than 10 years experience near the top of the corporate world, have arrived at the Harvard Business School for one of the 12 "executive education" programs it offers each year.

The Business School offers an extensive range of programs, from two-week seminars on very specific business topics to the more prominent 13-week Advanced Management Program (AMP). The money-making programs draw business people from around the world to the B-School campus.

Says AMP instructor and B-School professor George C. Lodge of the program, "It's extremely exciting. It's different from MBAs because they bring a wide variety of often very deep experience." He said that while participants aren't graded, they contribute to class discussion because of peer pressure.

Citing an example of the stimulating debates these veterans inspire, Lodge recalls, an incident in a class of his a few years ago. "I was teaching a class about the world debt crisis," he says. "We had the head of the Mexico city office of Citibank in the class and we also had a deputy in the office of the Mexican ministry of finance, so we got a really profound view of the issue. There's always that kind of richness."

"It's a very good idea. It's designed for managers just about to get their last big promotion, and they've had very little time to reflect or to even think about various aspects of what they're doing."

Rooms With a View

Although the participants do live in rooming groups of eight, the suites included in the stay are in no other way like those in freshmen dormitories. In fact, they are luxurious newly decorated suites with modern furniture and a view of the Charles.

Each "can group," as the mid-career students call themselves because of their use of the same bathroom facilities, features plush wall-to-wall carpeting; a large and comfortable modern sofa and a complete bar and television set hidden away behind wooden wall cabinets. In addition, each living group is also a study group, going over sample cases and problems together. So on one side of the common room is a small business-like conference table and a blackboard for the group to use in order to work together each morning.

The rooms on each floor even have separate color schemes, color-coding the walls, rug and furniture so that a participant will notice if he accidentally walks into the wrong suite.

Despite the extravagant surroundings, says B-School spokesman William Hokanson, "This is pretty Spartan by their standards. These people come from a certain level where they are used to it."

Originally started as the War Production Training Course in 1943, the AMP was first offered in order to "search for different statistical methods relating to war victory," says Hokanson. He says the program was designed "originally to bring key people up to date" in the efficient production of war time goods. In its current form, the program is specifically intended for senior level executives with at least 20 years of executive experience.

The AMP was later joined in the 1950's by the 14-week Program for Management Development (PMD), intended for business managers of between five and 10 years of experience. In the early 1970's, two more extensive programs were added to the curriculum: the eight-week International Senior Managers Program for senior execs from multinational or non-U.S. companies and the nine-week Owner/President Management Program for top level management.

In addition to these major programs, the B-School executive education division offers eight two-three week functional management programs and a number of short less-than-a-week seminars on more specific business topics throughout the year.

Big Bucks

The programs' tuition costs vary depending on their length, but reach a high with the current $22,500 price tag for the PMD and AMP programs. The participant's sponsor company must agree to pay this fee--which covers room, board and tuition for the length of the program--in addition to paying the executive's salary during the time. The program brings in about a fifth of the school's total income and helps keep it on good terms with major corporations, which provide the bulk of the material used for the 650 case studies used in teaching each year.

Nevertheless, the tuition costs are not a major factor for the large corporations, says George Wiltsey, administrative director of external relations at the school. He says that "the big cost" for the company of enrolling an executive in the program is the executive's absence from the company for a three to four month period. The Owner/President Program actually divides its nine weeks into three separate three week sections so as not to disable the participant's companies for a long period of time during their absence.

The executives must also adjust to being away from their companies and families. Joseph G. Tangney, a participant in the fall 1982 AMP program and currently Vice President and General Claims Manager for Liberty Mutual Insurance Company of Boston, explains that, for most executives, "the first couple of weeks were sort of a withdrawal," from the job and from the process of being involved in the daily decisions of one's company. The last few weeks, he adds, found many executives anxious to get back to their jobs. Only in the middle weeks of the program did most of the executives really relax, Tangney says. For most executives, he adds, "being away from the family is a difficult thing and most people were anxious to get home."

"There's a camaraderie that develops somewhat like the army, but it's a positive experience," says Tangney, explaining that the participants develop "a pretty close core--especially among members of the can groups because they live together." For Tangney, both "the rigor of the content and the relationship of the people to each other" made the program special. Despite the rigor, the AMP was still fun because it created a setting where "people with real world experience were getting back into an academic setting," able to study how the business world should ideally work and compare it with knowledge of how the business world actually works,he says. By teaching him "more effective interpersonal techniques" the program has made Perry a better corporate officer, he says.

Since 1974 these types of programs have become increasingly popular. "The interest in executive education in business is increasing not only in this country, but in Europe too," says Wiltsey. "An increasing number of companies are finding that this is a very useful thing to do."

However, the enrollment in the AMP has not changed from its standard 400 in many years, making the demand for executive education programs outweigh the supply. Despite the increasing interest, Wiltsey says that the school manages to limit the number of applicants to any specific session. "We in various subtle ways manage the pool of applicants," he says. "The worst thing that could happen to us is to have the same kind of chaos in the application process as Harvard College," he says, because the school is dealing with companies who might not send executives to them again if their qualified candidates get turned down.

Paul E. Perry, who attended AMP 1982 and is currently managing partner of the San Antonio branch of the accounting firm of Arthur Young and Co., says that his firm annually chooses one employee from one of its nationwide branches to attend the program.

Faculty Attention

Addressing concerns that the executive programs are of secondary importance to the B-School's MBA program, Wiltsey explains that the executive education programs now have all their own facilities and professors. "The executive education programs are just as much a part of the Harvard Business School as the MBA program," says Wiltsey. "We have our own basic executive education space here."

The executive education programs also receive individual attention from faculty. Each executive education program, along with the MBA program, draws its faculty from the pool of faculty at the Harvard Business School, Wiltsey says. But a faculty member concentrates exclusively on one program at a time. "Each program has a group of faculty assigned to that program for the year or usually for two or three years. At every given point in time, there is a group of faculty whose assignment is teaching in a particular program," he says.

The programs make use of a broad range of international companies and usually have about 35 percent foreign enrollment in the AMP and the PMD, says Hokanson. In the most recent PMD, the figure reached 45 percent, he says. In the International Senior Managers Program the foreign participant rate rises significantly to 80 percent, Hokanson says.

Having a large foreign contingent leads to "a lot of diverse points of view," says Tangney. For example, Perry says that his study of "corporate ethics took on a totally different perspective" when he discussed the isssues with classmates from South Africa.

One minority that still has not infiltrated the ranks of the executive education programs is women. In the most recent PMD, which graduated right before Thanksgiving, the female contingent ranked at about 10 percent of the enrollment, Hokanson says. He says this figure is gradually increasing as more women enter the corporate world.

Case Study

The executive education programs are taught, like the MBA program, through the case method, which brings real examples of business occurrences and problems into the classroom to analyze.

Before going to their formal discussion classes directed by professors, each day the participants gather in small groups to analyze case studies about actual occurrences in the business world. Many of the case studies come from the individual participants' own business experiences, Hokanson says.

For Tangney the case study method did not address specific problems he deals with on the job, but instead helped him to develop "a frame of reference of how to approach issues."

Because the classes are run by discussion and not lectures, the members feel obligated to participate, even though the sessions are ungraded. "They really work just because they don't want to embarrass themselves," says Hokanson.

In addition, the Business School faculty can remain in contact with the real world of business through discussion in the executive education classes. "This is where the faculty learns the most about current problems," says Hokanson. "The value of the course is not just subject matter but the ability to pick the brains of other executives," Perry adds.

Contact among executive participants often continues in both the business and social realms long after their stay in Cambridge. Perry's pride in the program sparked him to found a Harvard Club, and he not only plays host to his classmates who visit his home city of San Antonio, he also does business with them. His firm recently gave assistance to a fellow participant that may result in a six-figure business deal, he says.

Laurie M. Grossman and Joseph Menn contributed to this article.

(Monday: The Extension School.)

Analysis of the Business School's finances based on an annual cash flow of approximately $100 million (Figures are for 1984).

(Source: Harvard School of Business)

Sources of Cash: MBA Program  $21.2 million Executive Ed Programs  $21.2 million Gifts  $14.4 million Harvard Business Review  $13.3 million New Dept  $13.3 million Endowment Income  $11.1 million Sale of Teaching  $5.5 million Case Studies and Other   Summary of B-School Teaching Programs:

(Source: Harvard School of Business)

Program  Annual enrollment  Percent Non-U.S. Students  Program Length  Total Graduates MBA Program  1550  15  2 years  32,000 Doctoral Programs  50  45  3 years  770 Advanced Management Program  400  35  13 weeks  11,000 International Senior Managers Program  100  80  8 weeks  1000 Program for Management Development  252  35  14 weeks  6000 Owner-President Management Program  450  20  9 weeks  800 Functional Management Program  480  25-35  2-3 weeks  5000