Michigan Ross Eyes Benefits in Giving Away Executive Education

The recent news that the University of Michigan’s Ross School of Business is to give away free executive education to its alumni around the world seemed a welcome attempt at enticing new students to join its community.

However, from the school’s point of view, it also raised the question of what effect giving away a traditionally important source of funds might have on Michigan Ross’ annual revenue and consequently, the resources that have enabled it to be rated as one of the US’s finest destinations at which to study an MBA. 

Free executive education and MBA ROI

At the time of the original announcement, the school’s associate dean for executive education, Scott DeRue, was quick to express his belief that there would be no major impact “from a business perspective” to the changes ushered in by the new initiative, known as Alumni Advantage.

An INSEAD MBA graduate and former executive education director at South Africa’s University of Witwatersrand, Adam Gordon, has now offered an analysis of how alumni freebies might provide sufficient value to Michigan Ross to make such an initiative sustainable. Writing in Forbes, he explains that the offer of free open-enrollment programs should make the school more appealing among prospective MBA students from an ROI (return on investment) perspective, which in turn could enable Ross to enroll a higher a caliber of student and push on up the rankings. There is also a point that alumni who benefit from free open-enrollment programs might be more inclined to turn to their alma mater for other forms of executive education, specifically custom programs designed with their particular organization in mind.

Are customized programs at the root of Michigan Ross’ alumni offer?

What makes this last point interesting is that, on his appointment last year, DeRue talked up the value of looking more to customized executive education than to those of the open-enrollment and ‘off-the-shelf’ variety. Indeed, these comments came in the wake of three years in which Michigan Ross is said to have increased its customized programs by 70%, generating a 50% rise in revenue in the process.

In this light, it becomes far easier to see why the Alumni Advantage offer might be less of a financial risk for the school and one that allows it to emphasize what is clearly a tangible benefit to those joining the school’s community. In an example given by the school, the US$10,000 sticker price for a five-day open enrollment course is waived in its entirety, leaving Ross alumni participants solely with administrative and accommodation fees totaling US$1,250.

“We created Alumni Advantage to ensure that our alumni know that resources and support from Ross don’t end when they receive their diplomas,” said Michigan Ross’s dean, Alison Davis-Blake, in the school’s original announcement.

In this, the initiative essentially serves as a reminder of what school has to offer post graduation and it must now be hoping that its alumni remain far more engaged with the school after graduating and, indeed, with the concept of lifelong learning that executive education is built upon – no matter where in the world they end up working.