Competition grows for the Executive MBA

The Executive MBA has long been a staple of corporate leadership development, with many companies footing part, or all, of the hefty bills to retain and develop rising stars. But that is changing. Employer support for EMBA funding has been falling for a decade, and business schools face rivalry from companies’ internal leadership programmes and online training providers.

This shift raises a question: do these expensive degrees — usually studied by senior employees alongside demanding jobs — still deliver a strong return on investment, or are the alternatives becoming viable substitutes for EMBAs?

Becca Anderson is firmly of the former opinion. She enrolled on the EMBA at the University of Michigan’s Ross School of Business in 2022, alongside her job at the time as senior director of ownership experience at Ford’s electric vehicle business, Model e. Despite the cost — her tuition fees were $173,500, though she received financial help from Ford — she would do it again. “I’m grateful that my leader and mentors encouraged me to lean into my education,” she says.

The 21-month programme required monthly on-campus sessions, pushing Anderson to juggle work, motherhood and study. But she feels the effort paid off: it broadened her business outlook and sharpened her leadership skills, preparing her to lead a larger team at Ford. She now oversees customer experience for the EV division.

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For Anderson, the EMBA was not a means to chase promotion — it was about growing as a leader. She recalls one mentor told her that if you approach the degree as a way to win promotion, “you’re going for the wrong reason”.

The EMBA is showing signs of resilience. According to the Executive MBA Council (EMBAC), which represents some 170 business schools, there has been a 13 per cent average increase in applications among its member institutions between 2019 and 2023. Similarly, figures from the Graduate Management Admission Council (GMAC) show a 25 per cent increase in the median EMBA class size over the same period, from 40 to 50 students.

However, employer funding for EMBAs has dropped. EMBAC says that 18 per cent of students had their tuition fully paid by their employers this year, down from 24 per cent in 2013. Meanwhile, the number of self-funded students has risen from 41 per cent about a decade ago to nearly 55 per cent today. About 27 per cent receive partial sponsorship.

We’ve seen a shift over the past decade [to] where employers want employees to have some skin in the game

“We’ve seen a shift over the past decade [to] where employers want employees to have some skin in the game,” says Michael Desiderio, EMBAC’s executive director. This is partly because many EMBA candidates go on to leave their companies to pursue new careers.

One challenge for EMBA courses comes from in-house leadership training, offered by companies such as Deloitte, which runs a university that bears its name and cost $300mn to set up. Many others offer leadership training that targets full-time MBA and other graduates, among them Amazon, Microsoft and Johnson & Johnson.

Nick van Dam, head of the Center for Corporate Learning and Talent Management at IE University in Spain, says that companies are boosting internal development to keep up with rapid changes and the need for constant upskilling.

Van Dam, a former global chief learning officer at McKinsey & Company, says that corporate programmes allow businesses to tailor training to their specific needs. But, he adds, EMBAs offer a more comprehensive and structured curriculum. “Internal courses are like quick app downloads,” he explains. “But an EMBA is like upgrading your operating system — changing how you think and act by exposing you to insights from other industries.”

Josh Bersin, a human resources adviser, agrees that corporate leadership programmes cannot fully replace EMBAs. He notes that many companies “simply cannot spend the time and money to build basic business skills [internally]”.

Bersin adds that career advancement is often tied more to performance in the job than to holding the degree itself. But the financial pay-off for many EMBA graduates is substantial. According to a 2022-23 survey by EMBAC, participants saw their salary and bonus packages rise by about 24 per cent during their degrees.

A second challenge to EMBA programmes is the proliferation of online learning options. Coursera, for instance, works with universities and corporations to deliver training virtually, including an online MBA from the University of Illinois. This iMBA programme enrolled 4,898 students last year, with an average age of 37 — similar to the typical EMBA profile.

Jeff Maggioncalda, Coursera’s chief executive, points to the affordability and flexibility of online education, which allows executives to earn degrees without travelling to and from campus, often at a fraction of the cost of a traditional EMBA. The Illinois programme costs $24,000, compared with upwards of $200,000 for a top-flight EMBA.

“Leadership is getting more difficult and more valuable by the day, and the way we develop leaders has to change to keep up,” says Maggioncalda.

However, David Bach — the new president of IMD Business School in Switzerland — sees these online platforms and corporate leadership programmes as complementary to conventional EMBAs, rather than threats. “In the future, the boundary between degree and non-degree programmes will become more porous,” he predicts.

Cameron Brown, who leads carbon strategy at Shell’s liquefied natural gas, natural gas and power trading business, takes a more absolutist view, though. He recently graduated from an EMBA course at London Business School and, for him, the structured learning and diverse cohort could not be matched by online courses or Shell’s internal training. The energy major paid his tuition fees in full.

“It’s the debates in the lecture hall, the coffee chats where an idea suddenly sparks and you start connecting the dots — that’s what I was after,” says Brown.

Alternatives are proliferating, but for many executives the lure of an EMBA remains strong.

Letter in response to this article:
EMBAs are a collaboration of executives and faculty / From Matthew G Andersson, Founder and Former CEO, Indigo Airlines; MBA, University of Chicago (Executive Programme), Chicago, IL, US