27 Jun 2007  Executive Education

Learning to Make the Move to CEO

Even experienced managers need to learn more if they hope to ascend to the C-Suite. In a program created by Harvard Business School Executive Education, participants learn new techniques and perspectives not only from faculty but from their cohorts as well.

 

You're a successful senior executive with 20, 25 years of experience under your belt. You've made your mark and stand just 1 or 2 rungs from the position of CEO.

Now what?

As faculty chair of Harvard Business School's Advanced Management Program (AMP), Professor Robert Simons has seen many such executives in his classroom. While they come from countries around the world and from a variety of industries, they share a common characteristic.

"They're at a point where it's valuable for them to stop and reflect," says Simons, a specialist in accounting, management control, and strategy implementation. "Most are well along in their lives, with grown families. They want to make a difference and do great things, but when they step back, they see that they've been in a bit of a rut, running between e-mails and meetings all day. There's a realization that they only have so much time left, and that if they want to do something, they've got to move."

Launched in 1945, AMP is the longest-running executive education program in the world. And at 8 weeks, it demands a serious time commitment that may at first seem unthinkable to a busy executive who will be asked to cut off all contact with his or her organization—in other words, leave the BlackBerry at home.

But participants soon recognize the value they are receiving at a crucial time in their careers, Simons says. The program includes rigorous dives into management concepts from 3 perspectives: capital markets, customer and product markets, and geopolitical environments.

Professor William Fruhan leads the corporate finance piece of the curriculum, providing perspective on the globalization of financial markets. "Increasingly, there is more interest in private equity as a source of capital around the world," notes Simons.

The topic of marketing, taught by Professor John Quelch, is brought up to the executive boardroom level, says Simons.

"There's a realization that they only have so much time left."

Professor Julio Rotemberg provides an international vantage by systematically presenting a macroeconomic view of world regions so that participants have a clear sense of how various economic and sociopolitical factors will affect their businesses.

The heart of the program, however, centers on strategy formation and implementation. Professor David Yoffie's course on competitive positioning helps participants understand how to orient their businesses in increasingly dynamic markets and provides strategies to help them recognize and respond to threats in the marketplace.

Simons and Professor Michael Tushman share the topic of strategy implementation, focusing on the organizational, systems, and people part of the equation. Tushman, for example, asks a fundamental question: As a leader, what do you have to do to cause an organization to change?

"Over all of this, we use a number of experiential exercises so people can apply these ideas and figure out how to build action plans," explains Simons. At a recent AMP session, Simons rolled out his research on what he calls the Executive Compass, which assigns key performance factors to each of the tool's 8 points.

"The North Star of this is identifying your primary customer, which is not always obvious," he says. "In the case of McDonald's, for example, their primary customer is not the consumers who eat their food, but real estate developers. People haven't always thought hard about this issue. The implication is that you have to put the resources in place to meet and exceed the expectations of your primary customer, while you look after your other constituents on an as-needed basis."

In the east quadrant, Simons focuses on performance variables and the theory of value creation. "We build strategy maps and figure out how to assess what leading indicators to track and how to feel confident that strategy is being monitored on an ongoing basis," he says.

"The caliber of our participants and the bonds they form is one of the program's strongest drawing points."

The southernmost point is about commitment to others. "Here we ask, to what extent are people in the organization committed to helping others achieve shared goals?" In some situations—a Wall Street trading floor or a car dealership, for example—people are paid on commission, and it doesn't matter if they're committed to helping others. In other organizations, commitment to the whole is enormously important. "We walk through when it makes sense to choose between these 2 extremes and how you make that happen," says Simons.

To the west, the focus is on creative tension. "We ask how managers can create tension in the business to promote or stimulate innovation across internal units," he explains. "We illustrate mechanisms that will encourage dialogue across internal boundaries and look at techniques such as using stretch goals to get people to think outside the box."

In the classroom

The AMP classroom is full of experienced leaders with much to contribute to each other.

"Everyone in this program has earned their stripes at a very senior leadership level," Simons notes. "It's important to have that kind of person because participants work in groups and in very intensive classroom situations. The ability to teach and to learn from one another is a big part of the AMP experience." Applicants are generally 3 to 5 years away from achieving the rank of CEO or its equivalent, and they must be endorsed and sponsored by their company's highest levels of management.

Every Friday, participants gather for a feedback session on that week's material. Initially, the discussion tends to focus on the ideas that have been taught, says Simons. From about the midway point of the program onward, however, participants begin to share what they will do differently at their companies as a result of what they've learned.

"While an MBA degree is a launching pad, we are seeing people who want to take a pause in their already accomplished careers so that they can develop personalized action plans to take back to their organizations," Simons comments. "It's a highly integrated experience."

Before they arrive at HBS, participants are divided into living groups of 8 people each, with careful attention paid to the balance of expertise and geographical representation. Each living group "pod" includes a living room, kitchen, and shared dining area, with simple bed-bath combos centered around a common space. Forget televisions in the rooms. And the accommodations, while clean and comfortable, might be more spartan than most executives are accustomed to.

"We jokingly call it 'monastic scholastics,' " he says

The result is that more people spend time interacting with one another in the common areas. "They're in a low-risk environment where, for the first time in a long time, they can get feedback from people who don't work for them and who are not their boss," says Simons. "It's a benefit they had not expected."

The international aspect of the living groups comes into play as well. A typical group might include participants from countries as far-flung as Thailand, Switzerland, the United States, and India, Simons explains. At first, that diversity can be a source of discomfort or surprise for some. Their neighbor not only looks and speaks differently—he (or she) sees the world in a completely different way. "Slowly, there's a realization of value" [in that fact], he says. "By the end of the program, they have the ability to view the world through the eyes of their friends, who have been describing assumptions they've been taking for granted. It brings home what it means to live in an era of globalization in a way that is far from abstract or academic."

Needless to say, there are also many moments of revelation in the classroom. In a case discussion on Mary Kay cosmetics and the company's strategic use of pink Cadillacs as a sales incentive, for example, a woman from Thailand raised her hand to comment that such an approach wouldn't be effective in her homeland: It's not acceptable to show off status with big, ostentatious cars in Thai culture.

Back to work

Near the end of the program, the focus turns to the topic of reentry: What is the best way to bring back what they've learned to their organizations? "Graduates walk a fine line," Simons remarks. "On the one hand, it's not wise to come back with … the attitude that they know it all and are ready to save the company. But by the same token, people expect them to return with some substantive ideas about how to create significant change."

As they make that transition, they can rely on a newfound network of AMP alumni for support. According to Simons, participants stay in close contact after the program and hold informal annual reunions at rotating locations all over the world. "The caliber of our participants and the bonds they form is one of the program's strongest drawing points," he says.

And when they get back to their desks, participants are in for another surprise: Things ran pretty smoothly in their absence. "It forced them to delegate, and they find that maybe that wasn't such a bad thing to do," Simons remarks. "It's given other people the time to stretch themselves and added a dimension to the organization that wouldn't have existed otherwise."

While the program demands a great deal of faculty involvement, Simons reaps benefits for his own research as well.

"AMP participants are the perfect audience—they will really tell me when I'm on the money or when something is not quite right. I need that feedback from them."

Participants have also served as a source for potential new case sites to illustrate the concepts of the Executive Compass. "This research is an ongoing project that's very iterative," says Simons. "It's a work in progress and a wonderful place to test ideas."

About the author

Julia Hanna is associate editor at HBS Alumni Bulletin.