Beyond the MBA

Companies in Latin America are customizing leadership training as a way to burnish management skills and groom the next generation of executives.

By Charles Newbery and Alejandra Labanca

Judging by the spate of new corporate universities, tailor-made management sessions and greater demand for executive education programs, Latin American businesses agree that good management can make a difference in the bottom line.
Even in an era of cost-cutting and increased expenditures on software and new equipment, managerial education remains a priority for many corporations.
“You can build a factory pretty fast but you have to find the talent to run it,” said Gustavo Wurzel, a leadership consultant in Buenos Aires for Chicago-based executive search firm Heidrick & Struggles. “That’s the hard part.”
Large corporations are cutting back on the traditional route — sending employees to universities to complete a two-year master’s of business administration programs. Companies are instead enrolling promising managers in specialized courses, creating custom programs — both in partnership with universities and institutions and on their own — and embracing nontraditional models for developing leaders at multiple levels within their ranks.
Fostering professional development can prove crucial to retain executives in highly competitive markets like Mexico and Brazil, Wurzel said. In those countries, many sectors are dealing with high rates of turnover as top managers are lured away. “There is more need for talent than the market offers,” Wurzel said.
He added that many companies also look to leadership instruction to create opportunities for advancement. Without completely dispensing with the work of headhunters, “at the same time there is a movement to build the talent from within, from the bottom up,” he said.
In Latin America and the Caribbean, the demand for executive education has been dominated by larger companies and the regional operations of multinational corporations.
But this pattern is changing. Although business schools have been providing executive education for some time, demand for customized programs has accelerated over the past three to five years, business educators report.
Education tailored to the company represents 90 percent of executive education at the University of Miami. “It’s the way we’ve found to keep nurturing the career path of professionals,” said David Lecón, director of executive education at the university’s School of Business which attracts many students from U.S. companies with Latin American offices in South Florida.
Florida International University, also in Miami, has a similar profile for its custom programs.
The corporate clients are demanding highly tailored programs that will deliver higher and more immediate returns on the often substantial investment.
“In these programs, we don’t teach generic leadership; we teach leadership to a specific business outcome,” said Gordon Armstrong, director of marketing communication and competitive intelligence at Duke Corporate Education.
The corporate education program is a spin-off of Duke University’s Fuqua School of Business in North Carolina and the top-ranked provider of custom programs by the Financial Times.
Duke has expanded aggressively outside of the United States, principally in Asia and the Middle East. Duke Corporate Education is now considering opening a center in Brazil.

HOME-GROWN EFFORTS
But in Brazil, Duke may find competition from already established institutions that are aiming to parlay their local expertise to attract students to their own executive programs.
Starting in 2003, the Fundação Getúlio Vargas in São Paulo launched a program for top executives to offer a Brazilian alternative to such programs at American and European business schools.
“We asked, ‘what we can do in Brazil to attract that level of upper management?’ We needed to do something specific to Brazil,” said Marcos Villela, academic coordinator of the foundation’s CEO program, known as FGV-CEO.
The program they designed is tailored to the needs of busy executives. Stretched out over an 18-month period, the course work consists of three intensive one-week sessions, which are structured more like a corporate retreat than school. Besides seminar discussions, the sessions offer exercise programs, walks and medical check-ups.
“The big difficulty is getting major CEOs for three weeks,” Villela said. “These people don’t even take three weeks of vacation a year.”
Other leading Brazilian institutions, like the Fundação Instituto de Administração (FIA) in São Paulo, the Business School São Paulo and the Fundação Dom Cabral in Belo Horizonte, also offer executive and custom education.
Yet some of Brazil’s leading companies — the mining company Vale, oil producer Petrobras and aerospace manufacturer Embraer, among others — ­operate full-fledged corporate universities that train a wide range of employees, from technical workers to senior managers.

LEADERSHIP REQUIREMENTS
As businesses become larger and more complex, some traditional top-down models have become less effective, creating the need for new styles, said Sue Todd, president and CEO of Corporate University Xchange, an educational research and consulting firm based in Mechanicsburg, Penn.
“It is not so easy for senior executives to make decisions and push them down through the company, to push change down into the organization,” said Todd, whose firm has helped establish corporate universities and develop learning strategies in Latin America.
Senior executives may be unaware of the effect and all the ramifications of their top-down decisions, Todd said.
“There are too many variables,” she said, adding that companies often turn to a more collaborative leadership pattern.
“The leaders are working as teachers,” Todd said, “working with the middle management and the front-line [management] to allow them to gain the knowledge and experience to be capable managers.”
For companies to grow, their managers must be flexible, said Todd, who also noted that managers must stay competitive to keep top jobs.
“Senior executives have to know how to create an environment so the managers and workers can thrive all the time,” she said. “They have to get out of silos and intermingle with each other and the entire team so they can come up with real breakthroughs.”

MANAGERS AS TEACHERS
Tenaris, a leading world manufacturer of steel pipe, takes this collaborative approach for executives in Argentina, where the company was created. After years of operating training centers for the rank and file, Tenaris studied other corporate universities and then founded its own facility on a spacious and modern campus outside Buenos Aires in 2005.
The corporate university has six separate schools that range from its Industrial School – all about steelmaking – to its School of Finance and Administration and School of Management.
“Employees are given leadership training from the moment they are hired,” said Horacio Bergero, director of Tenaris University. “Training that focuses on specific skills including teamwork, communication and coaching.”
Bergero said that the company employees teach all the courses, while “the deans that run each department have involvement with the areas that they teach.”
Having a company-wide program cuts the amount of time needed to train employees and helps employees adapt to changes quickly after an acquisition or modifications in company procedures.
Students are also able to design their own training agenda, more like a traditional university, Bergero said.
The university director noted that the leadership training is also designed to equip managers – and workers – with skills to take on new projects and keep the company competitive and expanding.
With its deep pockets, Tenaris can bankroll such a company-wide program. Smaller enterprises often reach out to outside institutions for help and instruction.
But for some companies, especially those with global ambitions, leadership and corporate training is an imperative.
In Costa Rica, which has experienced an influx of foreign companies in services and technology, local companies are finding they have to act proactively to keep competitors from enticing managers away.
Dos Pinos, a 63-year-old dairy cooperative, started its own corporate university, not only to train its employees but also to keep them, said Iván Céspedes Astorga, training and knowledge continuity manager.
Céspedes said the company was interested in preparing its 4,200 employees for global expansion, as well as staying ahead in the local market.
“The corporate university coordinates and manages our efforts in training and education in all parts of the organization, so that everyone is in line with the mission, values and strategy of the cooperative,” Céspedes said.

LEARNING ON THE JOB
Some of the biggest changes in managerial training in Latin America and the Caribbean are taking place at the workplace. One increasingly important technique is to rotate managers to different jobs within the organization.
“The companies that are the most advanced in training are taking stock of the people they have and what projects they need to develop their full potential for growth,” said Wurzel, the executive recruiter. “Then they assign the manager to a project or sector that will help develop that talent.”
“Academia teaches knowledge, not leadership,” Wurzel added. “You learn leadership and skills with assignments through rotation.”
Rotation is central to training at Arcos Dorados, the Buenos Aires-headquartered company that owns and operates McDonald’s outlets in Latin America. With 1,800 restaurants, Arcos Dorados is the largest restaurant operator in the region.
Under the corporate focus on rotation, the supply chain manager did a stint heading operations in Chile. One marketing vice president previously worked in accounting and finance before shifting to operations. The CEO also got his grounding in accounting.
“Everybody has been trained cross-functionally so they all know what the issues are in every field,” said Woods Staton, the Arcos Dorados president and CEO.
“They look at a problem and opportunities from multiple angles,” said Staton, whose franchise is the largest among McDonald’s worldwide operations. “This makes our discussions as a management team much richer. There is a lot more experience at the table.”
A more experienced management team allows executives to act nimbly and effectively, Staton said. “At the end of the day, success is all about management.
“It is all because of the quality of management and the quality of the people, the way people work together.”

Charles Newbery reported from Buenos Aires and Alejandra Labanca from Miami. Andrew Downie in São Paulo also contributed to this report.

For a listing of executive education providers, please visit latintrade.com.

A STUDENT’S PERSPECTIVE

Pedro Patricio, regional director in Latin America for sales operations of SAP, is enrolled in IESE’s 2010 Senior Executive Program for Latin America.

The program consists of course work taught in three one-week sessions held in Miami and New York. The specialized training for Latin American executives was developed by Spain’s IESE Business School, of the University of Navarra,  with its Latin American partners, IPADE of Mexico and Buenos Aires-based IAE.

Patricio, a native of Portugal, knew IESE’s reputation when he found the program. SAP, a leading developer of business management software, agreed to pay for his course.

His fellow students have a lot of hands-on experience in the region; a big plus, said Patricio.

“I wanted to do something to refresh my skills but did not want something generic,” Patricio said. “I was interested in something focused on Latin America, not Harvard, for instance, where I would have been sitting discussing cases focused on U.S. business.”

TAKING A BROADER VIEW

The Wharton School, of the University of Pennsylvania, restructured what had been its CEO Program for Latin America into a global CEO program in 2010. In this joint venture with Spain’s IESE Business School and the China Europe International Business School (CEIBS), Wharton wanted to expand the program as well as give managers from Latin America a broader perspective by exposing them to other regions, said Amanda Jefferson, co-director of the Global CEO Program. The first of three sessions will be held in São Paulo in November 2011, the second in Philadelphia in March 2012 and the last in Shanghai in June 2012.