Educating a workforce requires careful coordination. To ensure that companies have a sufficient supply of potential managers, HR departments and business schools often work together to provide individuals with the skills their firms are looking for. But the MBA, one of the tools they use, has come in for criticism recently. Chris Willett brought together Svetlana Chekalova, HR director at Sibur, and Sean Meehan, dean of external relations at IMD, to try to find out the true value of business education and how Russian companies could better exploit it.

Jobs & Careers: The crisis has often been mentioned as a time for some to improve their qualifications, do you think this is really so?

Seaán Meehan: As a generalization, no. If you have lost your job in this difficult climate, it really depends on your personal circumstances. Your number one responsibility is to get on with your life, figure out where you are going, make sure you can look after your family and find a way forward. Education may or may not be the answer. You might be well qualified and competent in your area already. But if you feel you want to use the opportunity to reassess where you are going and you have a different trajectory in mind, you may need to regroup and then further study may be useful.

There is, however, an interesting fact that during a crisis, even in less severe crises such as the previous consultancy industry crisis, we see applications go up.

Svetlana Chekalova: That’s interesting, what about now, do you have more or fewer applicants than usual?

SM: Around 10 percent more.

SC: Of those, how many people work and how many people do not work while studying?

SM: The MBA program is full time; you cannot work while on the course. But the norm for the Executive MBA is that people are in their jobs, and companies pay for it. So our clients are the companies. We serve the participants, the people in the class, but our clients are the companies, so it has to make economic sense for them. They are the drivers of our business. But to be clear, the 10 percent increase is on MBA applications.

J&C: Are they individual applicants?

SM: Yes, so it is really an atypical part of our business overall. They apply totally independently, they pay for themselves, which is an important part of the model for us because we want to know that they have an investment at stake, but executive education, which is about 85 percent of the business, is company funded.

J&C: So, if education is an investment, to what extent can you quantify the return on this investment?

SM: It is quantifiable. Our 2009 fees were 75,000 Swiss Francs ($70,000), living costs 36,000 Swiss Francs, making a total out-of-pocket investment of 111,000 Swiss Francs. Participants also have to give up their job for a year and their average earnings of 77,000 Swiss Francs. However, the average salary obtained on graduation is 195,000 Swiss Francs. But that massive immediate return is not why they should come to IMD or take any MBA. They should come to accelerate their already fast track. Typically, participants are 30 years old with seven years of experience before they join us. These people are doing really well at the time they come to us. They are not confused about their direction; they have momentum. But they want to get to the top. The value proposition we make is the following: you are 30 now, give us one year of your life and we will change the course of the next 15 years for you. We do not focus on the rest of your life, we focus on the next 15 years — what can we do to help you get into the executive suite when you’re in your mid-40s, because that’s when you need to be running big divisions or significant companies.

J&C: What about from the view of an HR director, Svetlana? How do you look at an applicant who has an MBA on their CV?

SC: It depends on the name of the school, I think. But I do not know how valuable the diploma itself is. Yes, it shows that the candidate is hard working, can count and read properly, that they are ready to put in enough effort to deal with complex issues and to see something through to completion. But it does not show how people are able to apply this knowledge. An MBA is a good thing to do, it demonstrates potential and an ability to achieve, but after that experience is more important. The MBA is a good start and a good indicator that someone can be a good manager and leader.

SM: What I have learned from HR executives around the world is that which MBA matters. It is not a commodity product. There are some courses, although not well-known, that certain companies really want their people to have taken. The line on the resume is not in itself very interesting. You have to ask people what drives them, what motivates them and what makes them want to achieve. If all MBA graduates were equal, you would not have to interview them, and they would all be equally successful in the position. Much of it is about the individual’s motivation, the context they are put in, whether they are given too much or too little responsibility at the beginning, their ability to get on with their peers, and their ability to adjust and accommodate. One criticism I have of MBA programs is that occasionally they are not thorough enough on personal skills — they concentrate too much on technical skills.

SC: Also, I think it is not always easy for MBA graduates to find the right position within an organization, especially big organizations, because they are bright, smart and young. Sometimes they have more experience, sometimes less. They want to make changes and the organization rarely likes someone young coming in and wanting to alter things. So organizations need to work on how to help these people to adapt and integrate.

SM: That is one of the things that I like about our MBA program. We do not necessarily pick the best of the people we see. We seek to put together the single best group of ninety students that we can, the most diverse, intelligent and experienced. Then we throw them together in small diverse groups and let them get on with it. There is fighting, crying and bruising, and then there is great exhilaration when they manage to cope. You should not wait until the work environment before you deal with personal politics and pressures. I think good MBA programs are able to take smart people and make them effective people.

SC: Or you can take effective people and make them smarter — and that is the executive education program. I am actually amazed how often older people are ready to learn. This is probably the secret to their being effective. Sometimes young people say they do not have time to study. This is risky because there will come a point when the organization no longer requires them. Older people, on the other hand, are often ready to learn, to watch what is happening and follow the changing world. I have seen experienced managers spend a week at a business school and come back with a lot of ideas, which they then implement.

SM: I do not think people get smarter. I think that what you can do is change perceptions. We are prejudiced: What we do is perceive people as smart. The important thing is that others appreciate it. There may be somebody who is just considered part of the furniture, but then something happens and they awaken. You say, “my God! What a contribution.” Then you give them more rope, more opportunities and all of a sudden they become a star player. They did not become smarter; they became more valuable. They took an opportunity and we adjusted our prejudice. This is one of the most difficult things for managers.

J&C: So, if the line on the CV is not the key aspect of an MBA, what is its most important benefit — the contacts, the knowledge, the skills or something else students acquire?

SM: MBA programs offer an awakening and an opportunity to be a leader. I would not isolate the experience, the tools, the competencies or the networking. We design courses that stretch people, that force choices and make people highly purposeful. I am not too interested in the component parts, because we have to work on different people in different ways.

SC: I think Sean has mentioned most major components, but I would not underestimate the knowledge gained. Sometimes education is very functional in a very narrowly specialized area. If you want to be an effective manager, you need to understand how a business works and how the whole model works. When people see a broader picture, they work more effectively in their role. They may not be responsible for the whole thing, but it is important they understand how it works as a whole. At Sibur, we consider it important to communicate what we are doing, our strategy and how our company works. Although the company is so big and diverse, it needs to be an integrated body. To do this the management is currently talking to staff at the plants. Our president, for example, is sharing his perspective on the global economy and the petrochemical industry in a clear and concise way.

J&C: Do you think it is important to gain experience abroad and bring it back, or are Russia-specific institutions more useful?

SC: I think the global context that Sean mentioned is very important, because Russia does not exist in isolation but in the global context. In order to develop, a company needs to have the best practices and compete on the internal and external market. It is crucial for Sibur’s strategy. On an operational level, for example, we are introducing world-class safety standards with DuPont. We have big investment projects with contractors such as Fluor, Linde, Tecnimont and technology process licensers such as INEOS and Basic Element. We work in partnership with European petrochemical companies such as Solvey, for example. So we need to build competencies within the organization and have people who can work with top-class players talking the same language. They need to be up to the standards of world-class managers and able to do complex things that nobody was doing in Russia before.

J&C: If MBAs and executive education focus primarily on those already in a company’s management structure, how should companies address recruitment education needs?

SC: Russian companies need to build development systems — not episodic programs only for managers, but a system for the whole organization. One principle of our HR strategy is to attract those people with technical and professional qualifications in the regions so they can build a career in the organization. Although obvious, this concept is not so easy to implement. We have chosen some universities and have built up a model for cooperation: We invest in a specific area, select the best students, provide student grants and use training courses from these universities. We even fund the professional development of the institutions’ professors. It is key for the company’s future.

Also our talent pool on a local level helps promote leadership. We see people develop rapidly. There is a belief in Russia that the Communist Party legacy is too difficult to remove and a whole generation needs to pass away before the country can move on. I do not believe that: I see how quickly people can develop, if they want to and the company helps. It is amazing when you put in effort, you get much more back.

J&C: Svetlana, as well as being an HR director, you are studying on an executive education program. Tell us about that.

SC: Yes, it is different from an MBA; it’s more concentrated. Less presence in Lausanne is required, and the remote element is heavier and more intensive. I think this makes the program better because you are not spending a lot of time away from work, but it is also more challenging. When you’re a full-time student totally focused and you dive into studies you can do it, but when you’re combining studying with your main job it’s not so easy. Participants are busy every day with work, deadlines and exams.

The good thing about it is that there are all types of technologies to make distance learning exciting and help keep you all together. All of us on the course help each other: We exchange our learning experiences and support each other. I think that in Russia distance learning is a very effective tool, especially considering the country’s size and geography.

J&C: Although already an established academic practice, distance learning entered the business education sector somewhat later. Sean, do you see that as the main area for development?

SM: I think it is a main area for development, but not the main area. In my opinion, schools need to be much less academically oriented; they need to be much more practice oriented. The industry has a long way to come in terms of being in line with the objectives of the economy. We are a business school and we have no business being in business unless we are improving the practice of management. And that’s real not theoretical. Our economies need businesses to be effective, more efficient and to drive job and wealth creation.

The onus now for business schools is to move from education to development. It sounds like the same thing: executive education, executive development. It is not. We are levers that a management or investment organization can use to get more from its assets in a way that makes a lot of sense for the individuals as well. You have just heard Svetlana talking about her sentiment after one module of the Accelerated Executive Development program. I heard two things: one it is really intense, and two she is very enthusiastic about it. These things are totally aligned. You cannot be enthusiastic about something that is taking you in completely the wrong track or peripheral. You can choose a lifestyle where you have this great hobby studying, say, Arabic, accounting or marketing. That is different; I am talking about businesses and making them grow dramatically.

Where does this come in? We have a responsibility to our society to continue to move business forward. We can influence a lot of companies and people over a lot of time, but we are limited by the physical resources we have. I do not think that we want to follow the Open Univeristy route, which is the exemplar for distance learning. We need to integrate ourselves into the organizations we work with. We have to be physically present in a company to really understand the objectives of the kind of companies that are sending us participants, and we need to make sure that what we are doing is on track. Then to accelerate the experience, we can add a distance-learning ingredient, but instead of being totally virtual we do what is called blended learning. And I do not think there is an exemplar in blended learning today. There are lots of good online learning solutions, but for the kind of hand-in-glove operation that we are talking about, there’s still some pioneering ground left.

J&C: On the topic of social responsibility, business schools have been churning out executives for the past 20 years in earnest, many of whom have been running those companies experiencing difficulties recently. Does business education need to step back and look at its teaching culture and the attitude it is fostering?

SM: If I can paraphrase your questions, you are asking whether we are responsible for this mess. I do not think that we are. I think it would be an extraordinarily arrogant position for me to take — I do not believe we have that level of influence or control. It seems that a lot of individuals who are individually very self-motivated are greedy. Where does that come from? I have dealt with this question for years — where do your values come from? They do not come from any experience you have when you are 30 or 35. They do not even come from your university or your high school. They come from your parents, when you are four, five, six and seven. That is where your learning and the real drivers that are a big part of self are created.

You have to look at multiple constituencies to look at what went wrong and how it could have been managed. But we at IMD believe that we are not here to promote goodness or badness — we are here to help managers be more effective. We encourage self-reflection and improvement in responsibility. We do not want to make better carpenters; we do not even want to make better managers per se. We want to make managers that are willing to lead.

Leadership is a different game. It is not a technocratic solution that we are after. Part of leadership is really understanding where, why and how you are going to move an organization forward, and having the sense of confidence and purpose that it is your responsibility and not somebody else’s. I accept that we have not done enough as an industry to push that agenda. I’ll go further, I accept that we at IMD have not done enough in the past to help in this respect, but we can only try to do more. We have reflected on what has happened and tried to adjust some of our programs. We have launched a few specific programs that have helped us in this area and we are committed to long-term businesses and sustainability.

SC: I think leadership is a crucial topic for Russia. We have the education, but education and development are not the same thing. We have people of all ages with this technical knowledge but they are not ready to take responsibility. There have been times when we have visited a plant selecting people for pivotal positions, and in interviews we see whether they could do it, if they want it or are confident, but people often say they are not ready yet, even when they are about 30 years old. When will they be ready?

For example, one guy who was offered the plant manager position could not sleep all night and in the end he did not take the responsibility. It is a mentality switch, and Russian managerial and organizational culture is very autocratic. People on all levels are not ready to take responsibility and lead. I think that this development is absolutely crucial for Russia at the moment.

SM: That is a profound point. It is very import for executives to realize that not everyone wants to be like them. Typically looking at a board or executive committee, you are looking at very driven, successful people who have vision and purpose. They are people who are actually very good at sharing these things. It does not mean that everyone wants to follow or to give up their lives in the same way. They may not want to give up their soccer; they may prefer to spend their time with their children. These are choices.

The implication of this is that companies need to have a deep pipeline. They cannot put their bets on two people — they have to know that not everyone is going to make that choice in the end. Our job is to prepare the next generation to do a better job than we are doing and then move out of the way as soon as they are ready.

SC: And in Russia we do not have immediate successors for the most important positions. Russia has a long way to go before we have these managers and leaders in the pipeline.

J&C: Various international business schools have noted that their Russian intake is dominated by individuals, while in Europe many participants are presented by companies. Is that something that Russia needs to work toward?

SC: I think it is a core responsibility of companies to develop people. They need to work closely together with schools. You cannot just buy services, if it is just a theoretical course you do not know what you are buying. It does not work. As we see it, companies need to deploy their internal resources to make customized programs combining the expertise, research and traditions of business schools with the internal resources, experts and executives from inside the company.

Actually, we are working with the Stockholm School of Economics and we are doing a kind of MBA program for our talent pool. We collected a group of 160 people — a large number — and then we chose the best 40 people and sent them to SSE. It is almost an MBA program: They do not receive a diploma at the end, but they go through the whole course. Also we have added some internal expertise to the program. It is something that is very difficult for competitors to copy, because when you deploy internal resources it stays within the company. But even if companies are running internal corporate programs, it does not mean that they do not need to send people to open programs. It is different.

J&C: Do you think that this is an area that has room for development in Russia?

SC: I think it is the company’s choice, but those companies that are targeting sustainable growth and long-term objectives definitely need to do it. I remember a television interview between a Russian entrepreneur and a business educationalist. The question was about what the entrepreneur was doing during the crisis, whether he was ready to develop people and to continue with educational programs. He answered, “No way. It’s a crisis and I know what to do: fire everyone and then when the recession is passed I’ll hire everyone back.” That is a very short-term target. Companies should take a longer-term perspective.

J&C: Is that your experience too, Sean? Do you have the same links with Russian companies as with those from other countries?

SM: We have links with Russian companies. Our strategy is not to have lots of links with a lot of Russian companies but rather to be very focused on a few where we see significant opportunities and we can really make a difference. The last thing we want to do is provide a commodity product to lots of participants from many companies. We are not going to be the biggest player in executive education in Russia anytime soon and that is not the objective. The objective is to really help this country and its citizens through the economy and through the companies that can drive the economy.

We have good relations with a small number of companies. The reason I am here is to talk to a few more and really focus on those to try and provide them with solutions that do exactly what they need. As a quick report back on those companies that we visited this week: They are absolutely buoyant about the role of talent, the room for improvement and the economic outlook — it was honestly very refreshing.

We are advising on curricula, designing specific programs and we have individuals coming on our programs in Lausanne. There is a good, growing representation of Russians, and that has been the case for about the last five years. But our objective is not to maximize numbers from any market per se. Our objective is diversity: We want participants to sit in a classroom and think, “Ah, this is a global context.” We have Latin Americans, participants from the Middle East, Asians, Russians, Europeans and North Americans. That is the interconnectivity that we lost sight of in the crisis.