From the September 2001 issue of Entrepreneur

Not long ago, most entrepreneurs thought the only degree they'd ever need would be one from the School of Hard Knocks. "Who needs some ivory tower intellectual telling me how to run my business?" the thinking went. Of course, they were partly right. There is no substitute for hands-on learning.

But post-graduate degrees and other relevant business courses can lead to smarter, faster business growth and can help build a group of highly skilled and knowledgeable employees. Classroom learning has plenty of practical applications, particularly considering the dynamic nature of today's economy. Laid-off dotcommers are taking classes on sales and marketing fundamentals, and founders of traditional companies are going back to school to better understand e-commerce. With night and weekend classes, certificate programs, online courses and customized in-house options, executives now have more educational opportunities than ever before.

Master's of Your Domain
A full-time MBA program remains the cornerstone of most schools' executive curriculum. A typical MBA program takes two years for full-time students, but three to four years for part-timers, depending on course load. Peter Carlisle, 33, founder of Portland, Maine-based Carlisle Sports Management and an MBA student at the University of Southern Maine, usually takes one or two night classes per semester. On school days, he faces the challenge of finding time for homework between meetings and conference calls.

"My typical day is getting to work early and doing as much as I can before noon," says Carlisle. "I'll take 45 minutes of lunch to prepare for class. If I have more to do, I'll hold calls after 5 p.m. and do more coursework. Classes usually run from 7 to 9:30. It's exhausting, but you can do it without taking time off from work, which I couldn't afford to do."

Carlisle says the discussion among seasoned executives enrolled in his classes is often just as valuable as the course material itself. "I like nothing better than disagreeing with my professor and classmates," says Carlisle. "That kind of discourse makes you evaluate your own management skills."

Unlike his other degrees, Carlisle insists his MBA is more about learning practical skills than hanging a piece of parchment on his office wall. "You go through a lot of school and know it's valuable, but you're there for the degree," says Carlisle of the typical college scenario. "Now I couldn't care less for the degree, and I'm a sponge because of it. I choose classes based on what helps me manage my company. I'm going for an MBA, but the degree is an incidental benefit."

Customized and In-House Programs

The scope of executive education now goes far beyond the traditional MBA degree. "Essentially, an MBA is designed to develop entry-level business skills," says Bill Scheurer, chair of the International University Consortium for Executive Education (UNICON). "But what do executives do when they're in midcareer, and they're taking on general management skills? There's another body of business education there. We're noticing a big growth in customized programs where companies and universities collaborate."

There are now more than 2,000 corporate universities worldwide, up from 400 in 1988, according to Jeanne Meister, president of New York City-based Corporate University Xchange, a research and consulting firm. Roughly half of corporate universities have on-site campuses. Corporations can mix and match experts or professors for training sessions that last anywhere from one day to several months. Some classes are taught online, while others are conducted at a nearby college or university.

Flexibility and accountability are the greatest benefits of in-house programs. Universities and companies can collaborate on tailor-made curriculum, and employees are able to take classes as part of their regular workday. CEOs and upper level management are directly involved in program planning and execution. Employee follow-up is an ongoing process throughout each course. "You have more control and ownership around the objectives and results," says Meister. "This isn't just a tuition reimbursement benefit."

Companies that offer in-house programs also attract better employees. "Companies that invest in education become employers of choice," says Meister. "They recognize the need to retrain and re-skill employees, because the knowledge people bring to their jobs goes out of date so fast."

Research shows that customized in-house programs are effective. According to a 2000 study by UNICON, 96 percent of UNICON program participants enrolled in customized programs said their learning experience was valuable. The UNICON study also found that incorporating the individual needs of employees and organizations into the coursework achieves the best results. Following up with participants before and after each class is the best way to measure a program's impact.While it's easier for larger corporations to develop sophisticated in-house programs, help is available for small-business owners. "They can do a couple of things," says Meister. "One is to be part of a consortium like the GWEC [Global Wireless Education Consortium], which is a group of telecommunications companies who form partnerships with two- and four-year schools. You can also create partnerships on your own. Usually this involves community colleges or local schools willing to create something innovative with you and your employees."

"Companies need to pay more attention to what they do before, during and after a program," says Scheurer. "It's a matter of sitting down with employees and reviewing the content areas, doing an assessment and giving them candid feedback."

EMBA/Online Options

While some customized courses are part of certificate or nondegree programs, credits can also be applied toward an MBA or Executive MBA (EMBA) degree. Although EMBAs specifically cater to the needs of mid- to senior-level executives, entrepreneurs are sure to benefit. The programs are more condensed, and most classes meet at night or on weekends. Last year, close to 8,000 executives enrolled in EMBA programs worldwide, according to the EMBA council.

Class size is usually limited to 45 to 60 students, and in larger cities, classes fill up quickly with employees from large corporations, making it difficult for executives from smaller companies to get into certain classes. Unlike MBA programs, experience and responsibility, not GMAT scores, are the primary criteria for entry into EMBA courses.

The price for most 18- to 24-month EMBA programs ranges from $30,000 to $100,000, depending on the sophistication of the program, and financial aid is available.

Many schools, like the University of Phoenix and CyberU, offer online programs that allow executives to earn their EMBA degrees without setting foot in a classroom. Students "attend" CD-ROM lectures and use interactive study aids, such as message boards and live chats. Supplemental video and audio programs are also available. Next year, more than 2 million people are expected to take online classes, and over 720 institutions now offer online graduate and professional degrees, according to US News & World Report.

Online classes are usually more expensive than their classroom counterparts. Duke University's Fuqua School of Business is generally considered to have one of the best online programs in the country, but it costs $82,500, compared to $60,300 for the school's regular EMBA program. Another drawback is that while online courses are more convenient, they lack the vital interaction students get in the classroom.

"In executive classes, a lot of the value revolves around debate and discussion," says Scheurer. "Typically, in one of our classrooms, we have 35 to 45 high-potential executives, and the classes are very interactive. You don't have a lecturer reading from the pulpit. It's action learning-debate, discussion. You can't do that online."

With the unprecedented number of educational opportunities now available to owners and their executives, it's clear that hands-on learning is no longer confined to the School of Hard Knocks. Today's uncertain economic climate means that now is the time to invest in something solid. There's no risk involved: Education is the one thing no one can take away from you.

Certificate Programs

Certificate or non-degree courses are sometimes as beneficial as MBA programs--maybe even more so. Just ask Valerie Suares. The 41-year-old co-founder of San Jose, California-based WeLoveMacs.com, an online store for Macintosh users, completed a certificate program in e-commerce at San Jose State University after she completed her MBA degree. "The difference between a certificate program and a master's is that you can take classes in any order," says Suares. "With certificates, you can pick classes [that pertain to] your business."

While Suares has loads of brick-and-mortar experience, her certificate focused on the nuances of e-commerce. "I took the program to springboard my business," she says. "The certificate was designed for people who [want to] immediately apply the knowledge."

Even after completing the certificate requirements, Suares continued taking courses. "I practically took all the electives," she says. "I wasn't interested in getting a certificate as much as I was in learning." So how did Suares balance her schoolbooks with balance sheets? "It completely overlapped," she says. "I crafted projects that I needed for my own company. Work and school never infringed because my homework applied to my business."Suares also interacted with experienced Silicon Valley CEOs. "We had assignments which involved working together as teams building a business," she says. "I was in constant communication with team members from my class, writing presentations and designing a Web site."

Now that she's completed an MBA degree and certificate program, which was more beneficial? Says Suares, "The certificate program was the most practical educational experience I ever had."

Diversity in Learning

One of the leaders in minority executive education is the UCLA Leadership Suite, which began in 1982 as LEAP (Leadership Education for Asian Pacifics). In 1998, the program expanded to include an African American program. The Leadership Suite now includes week-long courses for women, Latinos and lesbian/gay/bisexual/transgender students.

"We're the only university in the country doing this," contends Alissa Materman, marketing director for UCLA's executive education program. "The objective is a little different from our other programs. With these programs, you're going to learn how to present yourself and succeed in your organization and form a supportive network."

Most classes comprise 25 to 40 students from businesses of all sizes. The cost for each leadership institute is $5,000, and most companies pay for employees' attendance. Scholarships are available for small-business owners and women.

The classes share a common curriculum based on teamwork, entrepreneurship, empowerment, mentoring, management and presentation skills. They also address specific issues important to each minority group. The Latino program, for example, focuses on transforming power into action, while the women's program deals primarily with work/life balance.

According to Materman, the Leadership Institute is important because most business classes don't address minority issues. "In one of our African American programs, I heard somebody say, 'I've never been in a class with so many people who look like me and understand me,'" says Materman. "There's a level of comfort and [knowledge] about each other because even if they don't come from the same experiences, there's a common bond."