In a recent blog post, Tim Westerbeck, founder and president of Eduvantis, outlines some of the challenges facing EMBA programs in the coming years. I think he is absolutely correct. Even though the basic design of EMBA programs hasn’t changed much since we pioneered the concept in 1943, the next few years are likely to see some significant changes in our business models and the structure of our industry.
As Tim points out, there are several key issues facing EMBA programs:
· Reduced corporate support for education. Fewer and fewer companies are providing financial support for EMBA programs. Even fewer send their employees to EMBA programs as part of a formal professional development process. Increasingly, we see students who pay for the entire program from their own pockets. As tuition continues to rise, schools will have to be more creative in assisting students with financing options and in demonstrating the ROI of the degree.
· Continued growth in tuition costs. Tuition has outpaced the general rate of inflation for many years and shows no sign of slacking. Are we pricing ourselves out of the market? Are we likely to face increasing competition from lower cost providers? Schools will have to face up to the reality that the days of regular tuition increases might be over. Given the contribution that many EMBA programs make to the school as a whole, this could have implications on the entire enterprise.
· Expanded student demand for services. EMBA students increasingly expect the same type and level of service that we have traditionally provided to our full time MBA students. Career support, student organizations, and a wider selection of elective courses are just some of the services EMBA students have come to expect. Each of these adds to the cost of the program and changes the structure of the school.
· The broadening use of technology. From online degree programs to tablets in the classroom, there is no doubt that technology is about to make major changes to the delivery of our courses and to the structure of our industry itself. There are still many questions on what the specific impact will be, but schools that aren’t thinking about how technology will change the industry may find themselves struggling to survive.
·Expansion by industry leaders. Some of the world’s best known EMBA programs have expanded across the US and around the world. Wharton, Kellogg and Chicago Booth all have satellite campuses and continue to expand their networks. How does a lesser known school compete when one of these players comes to town?
· Increasing competition. Across the globe, the number of EMBA programs continues to increase - even in spite of the uncertainties in the industry. It will be even more important to establish a unique positioning and develop the marketing plans to support it. Even so, it may be increasingly difficult to attract a sufficient number of students given the many choices that they will have.
· Alternative education providers. Specialized masters programs, for-profit schools, employer sponsored training, non-degree executive education and online educational programs can all function as substitutes for an EMBA program. Prospective students now have many more options to develop their professional skills. EMBA programs will have to develop strategies to distinguish themselves for the alternatives.
Many of these issues aren’t unique to EMBA programs, but apply to business schools in general. However, EMBA programs are likely to be the most affected and given the large financial contribution typically made by EMBA programs to their schools, any significant shift in the EMBA market will cause a major disruption to the entire enterprise.
So, what can a school do? First, schools should look closely at their portfolios of programs to see where they are most vulnerable. Between full-time, part-time and Executive programs where are the opportunities and threats in the market? Are there new program opportunities that could be added or does it make sense to scale back or eliminate some? What would happen if there were a major reduction in EMBA tuition revenue?
Second, schools need to be paying close attention to advances in technology, whether online degree programs, MOOCs or technology assisted learning in a traditional classroom. The technology is changing so quickly that it isn’t yet clear where it is headed, but it is critical to stay abreast of new developments and, where possible, experiment with alternative modes of delivery.
Finally, schools need to critically assess the positioning of their EMBA programs. What makes it different? How is it perceived in the market? What do you offer that no one else does? The answers to these questions will help the school determine whether the EMBA program can compete and on what basis.
Here at Chicago Booth, analyzing these issues is a regular part of our annual planning process. As a result, we are confident that the EMBA program concept we launched 71 years ago will still be going strong 71 years from now.
Associate Dean for Global Outreach