Business technology and best practices are changing far more quickly than executives can keep up. As a result, CEO’s are going back to school to stay abreast of new core competencies, such as Six Sigma and performance enhancement, to update and develop their skills, and to stay on top of their game.
David Silverstein, president and CEO of Breakthrough Management Group (BMG), a business performance improvement training company and Six Sigma consulting firm, has worked with senior executives from companies including Johnson & Johnson, Fidelity Investments and Borg-Warner in order to bridge what he calls a generation gap in corporate education.
“We’re doing a lot more in the executive education stage today, and what’s driving us is two things. One, as Six Sigma’s maturing in industry, a generation gap is emerging, and that generation gap isn’t defined so much by age but by different levels of management,” said Silverstein. “Many of the middle managers and individual contributors are getting an education in things like systems thinking, process thinking, statistical thinking and decision-making tools that senior executives aren’t getting. Some of these companies are starting to recognize there’s a problem: All of this great education that we’ve given people? Now, we’ve got people who are starting to look smarter than their bosses. That’s a problem when you can have individual contributors and middle managers who can see when senior executives make bad decisions.”
Silverstein said that two-thirds of BMG’s new business comes from service organizations in financial services, health care and telecommunications. Performance improvement has moved to the softer side of the business. “It’s not just about making better widgets, it’s about decision-making processes. Companies are starting to recognize that the skills they teach people are not specialties for engineers, statisticians and Six Sigma black belts; they’re really core competencies for every business leader.”
Six Sigma is popping up on the curriculum in MBA programs at universities, which is important because the presence of Six Sigma and performance improvement methods and tools seems to indicate that universities recognize these methodologies are new core business competencies. Business leaders also are recognizing that there’s a need for educational renewal, said Silverstein.
“It used to be if you got your MBA in 1965 and then over the years moved up the food chain in your company, by 1985 between your education and your experience, you might be well-qualified to be the CEO of a company,” said Silverstein. “But if you got that MBA in 1985, chances are despite all the experience you’ve gotten between ’85 and 2005, there’s a good chance that you are not well-prepared to be a CEO in 2005 if you have not gone back and renewed your formal education. Things change much faster today than they did 30 or 40 years ago. It used to be that a formal education once in a lifetime was sufficient. I’m starting to find that a formal education once every 20 years or so is necessary. In the near future it will probably be 10 years, and at some point we need to figure out how formal education becomes an ongoing process.”
Notably, Silverstein draws a distinction between educational renewal and merely gathering new information as situations arise. “There’s a lot of senior executives out there that would tell you, ‘I’m a continuous learner. We’re a learning organization.’ But their idea of continuous learning is sitting through two-hour seminars,” said Silverstein. “Two-hour seminars, meetings and presentations by yourself, that’s information, not education. Education means really developing new skills, new core competencies, constantly upgrading your own capabilities.”
Twenty years ago, core competencies included customer focus and communications skills, and we’re past that, said Silverstein. Those older competencies are now so deeply embedded into business, they are expected. The new core competencies that are emerging, such as risk management and systems thinking, contain much more depth and scope. For instance, Silverstein said that risk management is not about risk reduction, but optimizing the return-to-risk ratio. “Systems thinking means understanding that a business is a complex system of interrelated processes that all, one way or another, talk to each other, and understanding the big picture. In a business, if you’ve got a sales organization that says, ‘Well, we focus on sales; everybody else do their job, we’ll do sales, and we’ll be happy,’ that person doesn’t have a systems perspective, because they don’t understand all the tentacles that go from sales to the rest of the organization. It’s like your body. Every nerve ending in your body is connected to every other nerve ending. They don’t stand on their own. Businesses today are very complicated, and if you don’t understand systems thinking, how all the pieces of your business interact, you can’t really effectively run a complex business today.”
BMG teaches these new core competencies, including systems thinking, process thinking, strategic planning, innovation, best practice discernment, culture building and risk management, in half-day to three-day or one-on-one coaching sessions. “My goal when I’m working with senior executives is to get them in the class for at least two consecutive days at a time,” Silverstein said. “Unfortunately, for corporate education it’s not the best model of learning. The best models are, you know, an hour at a time. People absorb information much better, but the economics, the difficulty in getting people’s time, you’ve really got to get them into a classroom somewhere for one, two, three days at a time. I think what’s most important is, executives need to recognize the difference between formal education that’s intended to help them build new skills and core competencies, and staying up with information. There’s a big, big difference, and we’re never too old to develop new skills in order to keep up with the times.”