Bruno Dufour with contributions from Tom Cummings
- Quick survey of Corporate Universities’ history
The explicit tradition of training employees on a large scale could go back to the start of the Industrial Revolution. In “The End of the Practical Man, Entrepreneurship and Higher education in Germany, France and Great Britain 1880-1940”, Jai Press 1984) Robert R. Locke makes a close connection between Graduate Engineering Education, Economics, the raise of Management as a science (Taylor, Fayol) and the performances and progress of industry. He summed up the debate with the question: “Did industry prod the schools, or did the schools prod industry?” p71.
Nevertheless developing trained engineers was not related to training within the corporation as we know it to-day. Most of the qualification process was “on the job learning”.
Things were slightly different in the US as processes were the main concern to industrialisation for automatisation purposes, while Europe was more concerned with production equipment as such, and not so much concerned about organisation.
And it took a while before training personnel as a whole became a clear consideration as a lever of performance.
It became formally part of social negotiations in France after the 1968 events, and was to become a law in 1971, with mandatory processes and minimum yearly requirements (to-day 20 hours per year) based on a percentage of wages (around 1%) and salaries. Large corporations may spend up to 6 or 7% of all wages on training and development.
In 1972 FIAT had started its own Corporate University, ISVOR, Istituto Sviluppo Organisational, (Organisational Development Institute) and was a precursor. The name in itself was a challenge as organisational thinking was not on the agenda of many corporations as it is nowadays. ISVOR had up to 150 full time faculty now reduced to 15.
For Bob Audrey (Vers des Universités d’entreprise, Management et conjoncture sociale N°275 sept 87) these entities started around WWII.
The first to be installed was GM in 1920, then in 1940 Northrup Aircraft.
In 1985 there are 18 Corporate Universities in the US. And numbers grow quickly as to-day up to 2000 Corporate Universities are in activity in the US. This figure is to be compared with the 2000 traditional universities in the country.
Most large corporations in Europe, Asia or in the US have now their own corporate university. One of the most impressive is the one of Accenture in St Charles, very much similar to a large campus (2000 rooms, 700 Full time employees) and hosting around 60000 people per year. One of the most well known is GE Crottonville, promoted by “Neutron” Jack Welch in 1988 (L’ université d’Entreprise, Hubert Landier Editions Liaisons 2000). In many countries associations exist to gather such activities and allow for exchanges, often set up by consultants: Corporate University Exchanges in the US founded by Jeanne Meister, or the UK association founded by R.Dealtry, as well as the same type of association in Germany by R.Deiser, or in France by Annick Renaud-Coulon. Jeanne Meister has published two books on Corporate Universities in 93 and 98 ASTD) and has been herself recruited by Accenture in 2005.
The European Foundation for Management Development in Brussels which gathers more than 400 Business Schools and around 100 large international corporations has launched in 2001 the Clip project (Corporate Learning Improvement Process) to assess and accredit Corporate Universities. This interesting approach has already accredited 20 Corporate Universities (www.efmd.org) following a parallel route to the Equis accreditation process for Business Schools (see Innovative Corporate Learning Pergamon 2006 and Les meilleures pratiques de développement des dirigeants EO 2006 Dufour Plompen).
Ten years ago Corporate Universities were seen, by Business Schools, as competitors (see Peter Lorange in New vision for Management Education, Pergamon 2002). But Business Schools understood that the issue was more on partnership and cooperation than pure competition, and indeed Business Schools are often participating in the setting and facilitation of programmes. IMD’s book Mastering Executive Education (Paul Strebel, Prentice Hall 2005) is certainly the best demonstration of the expertises that can bring a Business School to a Corporate University. And IMD itself has an interesting history explaining why it has such an understanding of corporate needs in terms of learning and development.
A case study of two Swiss Corporate Universities: IMI and IMEDE are interesting cases in point. The now famous business school IMD on lake Geneva was formed from two prior Corporate Universities, both of which were created to serve very different corporate purposes. IMI, originally Centre d’Etude Industrielle was founded by ALCAN’s Swiss director, Paul Hennez in the 1960’s to develop international managers for the company’s growing industrial business in China. It was an industrial model, with an emphasis on technological innovation. Paul Hennez, and later the Ukranian director Bodan Havralyshyn saw the need to build relationships across industries and with stakeholders. It was not unusual for high level meetings to result in the founding and fostering of many stakeholder initiatives. Thus IMI became the place where the European Association of Retailers was founded, the World Economic Forum was fostered by its then professor Claus Schwab, where the World Counsel for Sustainable Business was born and where Italian Industrialist Aureleo Peccei kept the papers of the Club of Rome. IMI saw the need for fostering new knowledge across businesses and the importance of social innovation. The creation of a Business Associates program made sure that eventually 100 companies got involved and provided a rolling endowment. Down the lake in Lausanne, Nestle created IMEDE to develop its managers from abroad. IMEDE took a more narrow approach, focusing on the development of a world-class MBA program, letting its faculty privately contract executive development. It drew faculty support from its close relationship with Harvard Business School and sought to develop its own disciplines, reflecting the need in a fast moving consumer goods company like Nestle for marketing and branding faculty who excelled at the case method. Both became independent – first IMI through a foundation structure, and later IMEDE, when Nestle endowed it to IMD along with the existing campus. Both companies understood the need to create a world-class institution that would be a magnet for talent and a creator of industry leading ideas across many fields.
The denomination itself can be a problem, as in some countries the word University can only be used for traditional public universities. Academy, Institute, School, Campus, in English, or in the local language, are a few among others.
Nevertheless, whatever the name, every single entity is specific. This does not mean that there are common traits and common evolutions that the authors of this article would like to point out.
- Recent evolutions
Changes can impact facilities.
Corporate Universities have mainly evolved into two types: those that are of the ‘bricks and mortar’ variety, serving to host and convene programs and events by providing a hotel and classroom facilities as a corporate “home” for returning executives; and those that run on a “center of expertise” model, by providing just-in-time expertise to the business.
Bricks and Mortar
Many executives will fondly tell you of their experiences at the corporate home built especially to draw executives together in ritual programs that are rewarded for performance or longevity in the company. Unilever has its “Four Acres”, Shell has its Lensbury, Boeing has the St. Louis Learning Center and UBS has “Wolfsburg”. While each of these are unique in their own ways, they share a common ethos of providing corporate “glue’ and fostering the culture. The recent evolution of this type has been to move to shorter and shorter courses (the original Shell engineering course was two years) and to be a ‘workshop’ location for burning issues and just-in-time learning events. The hotel parts of these have been outsourced, as in the case of Pfizer Corp’s Doral Arrowwood which shares a golf course with the general public, and others remain private and exclusive. The risks of having such places has been that they have lacked proper governance structures beyond HR, yet when tough decisions had to be made, sentimental memories played a more important role than business sense.
“Center of Expertise”
These models have grown out of the need for the corporate HR or Senior Leadership to be more responsive to the learning and organisation development needs of the company. Many of these have been designed along the lines of Professor David Ulrich’s new HR division of labor triangle: Shared Services, Business HR, and Centers of Expertise. Some have used this re-organisation to include the implementation of enterprise-wide software such as SAP and to complement it with a Learning Management System. Unfortunately for a number of these initiatives much time and energy has been wasted in the implementation of this form of Corporate University. Some of the root causes are:
- Lack of a change management program to re-deploy people into the new organisation form
- Lack of a clear learning agenda that reflects the strategic agenda of the company
- Second-guessing that occurs in the overlaps of the agendas of the three legs of the stool – due to lack of role clarity and power dynamics between businesses and corporate center
- The misunderstanding of the ‘expertise center’s role – to identify and foster expertise and transfer it into the business, rather than play the role of self-proclaimed ‘expert’ at the corporate center
- Inadequate governance beyond HR to ensure that knowledge and learning are a corporate and shared business priority rather than a captive of the HR budget and self-interest.
Other changes can also impact the business model.
- Impact of competition and corporate strategies
As strategies change quite frequently, corporate learning focus, actions, and target groups have to adapt quickly. Many large entities (Shell, Ericsson, Isvor) had to be scaled down considerably. They had become a “state within the state” hard to manage and transform, as their full time faculty were not in the mainstream of the business and sometimes working on non business relevant topics. Many of these staff were proposed internal consulting jobs or just joined another support function. Very few would be redirected to operational jobs in sales or production.
Another impact is due to the fact that these entities deals with strategic issues and must then be under the control of the Executive Committee and not HR only.
Business becoming local, Corporate Universities or Collegiums have to set up a network organisation, as Alcatel did with 15 Universities under the same quality control process and review. Resources are local, the headquarters manage some corporate programmes, but most development programmes are local to better adapt to local needs and client requirements.
- Impact of technology
Remember e-learning when it was Computer Aided Learning, a night mare! But to-day as some can witness blending good distance education with seminar, in a sequence of pre-learning, meeting in seminar, post learning, coaching, self-learning (sharing, reading, web 2.0, networking…) bring a real solution to individual as well as collective needs. The add-on with platform like Learning Management Systems (LMS) allows people in charge of learning to follow on customised programmes and individualised learning routes. Each corporation has a specific learning culture, each individual learn his/her way. Technology brings mass customisation and cost (and time) reduction where one thought it was almost impossible.
- Budgets and time constraints, ROI requirements
Following previous remarks brought by technology impacts, the discussion comes often for Heads of Corporate learning on “time off office, and cost of attendance “.
After a couple of years, budgets constraints forced Corporate Academies to become self sustained. They become a subsidiary and must balance their budget and show some P&L. Then some kind of competition does exist between internal and external providers. Decisions on investments, programmes design, billing, take the usual corporate routes before final acceptance, including in some case, definition of specifications, and tender processes.
But as everyone knows, the link between development and training expenditures and performance is tenuous. As it is for advertising. But if there is a decision to be made, budget cuts are usually more for training and education.
This preoccupation has generated some reflexion among professionals that have designed innovative ways of learning more connected to be business and foremost more effective and productive. Action learning is typically the case. But one should also consider all the new Web 2.0 platform for learning.
At St Charles a brilliant idea was that you learn what you teach. Consultants would come to the place, a first 2 or 3 weeks to learn about new processes, new developments, new business, and stay more with the objective of teaching it the following weeks. Peer and corporate pressure, for those who can stand it, can speed learning.
ELP is also practising speed solving and consulting forums, on the same idea of speed dating, to show how internal resources can be tapped creatively within a company. The fringe benefit is on sharing best practices.
In the same range ASE, Accelerated solutions environment is an unconventional setting organised by E&Y Cap Gemini, to speed up transformation processes on huge strategic cross functional issues, allowing corporations to save months of discussions and large amounts of transaction costs.
Quality distance education can also a very satisfactory trade of and substitute when budgets cuts become harsh, or safety reasons are concerned (SRAS, swine flu, terrorist threats on transport).
- Reactivenes and need for action
Learning cannot be disconnected any longer from collective reflexion and action. Not only for ROI issues in Executive Education, but because of time constraints. But also because there are not so many places, in a company, where business can be reinvented from the inside. The corporate future has to be designed with those who know and understand the company, and can knowingly take charge of decisions and implement.
- Organisation developments
Most of the new developments fed by the actions led by the Collegium have organisational impacts. As strategies are more and more organically designed to anticipate or answer the new client needs, this means that the organisation has to be constantly adapted. And adaptation means also requalifying employees and managers to fit the new design. Designing the organisation, job definition and qualification processes must come from the same place to avoid conflicts, cost of transaction and controversies. The governance of the Collegium must reflect this specific situation and the Executive Committee is, at the end of the day, the sponsor and main client of this entity.
- New Stakeholder demands
Stakeholders are numerous, internally and externally. If training is the original demand, well managed the Collegium is also the place for many other missions: consulting and coaching, action learning, project management, turnaround issues, M&A support, assessment, social networks (Web 2.0), sharing of good practices, career development and management, mobility preparation, as well as management, leadership and organisational development. Some companies use it also to develop strong interfaces with external clients.
- New business model for CCLD
Even if corporations say that their main assets are HR, head counts, delayering, redundancy and firing stay the most common decisions that companies take when times are rough. Usually the share price reacts favourably. So much for the human assets!
One reason may be that what corporations want to keep is expertise, knowledge and information. This is not only a question of the number of key people; it is also a question of organisation. Some organisations develop, share, and use knowledge some don’t, whatever the number or type of people.
Nearly twenty years ago the concept of “learning organisation” stressed the need to design smart organisations that took a systems view and fostered a mindset of learning and development. The outcomes of this movement on knowledge and learning were not satisfactory as relevant organisational designs were unclear and relied much on individual managerial behaviour and proto-Taylorism re-named to reflect the fads of the time.
If knowledge and learning have to be linked with organisational development and governance, for strategic and economical reasons, it has to become a collective issue, managed at the top, not only determined and led by HR. The time is right for a “New Collegium” to take a structural view on the challenges of learning and development. To do anything less will be a misuse of the social capital of companies, especially at a time when soft asset development will be the critical factor to many corporate turn-arounds.
Becoming collegial, learning and knowledge are based on:
- Co-construction of knowledge, both internal and external through specific networks
- A culture of Sharing as opposed to turfism and silo thinking
- Leading at the periphery and locally, and not only at center
- Avoiding top-down and pushed decisions rather than engagement
- Managed through projects and networks using social media
- Managing distributed intelligence, as experts and expertises are everywhere
- Fostering collective and individual learning
- Including the quality and quantity of relevant learning and development in managerial assessments and appraisals
- Creating value for the company through relationship building, not just transactions
- Including action learning on relevant projects, as well as learning by doing (trial and error)
- Using new technologies to speed up sharing and co-creation, mostly non physical
- Where the specific corporate learning culture is understood and fostered through explicit means
- Where the governing body is composed of internal and external clients including top executive sponsors to align with strategy requirements, and deployment needs
- Whose Head is more of an architect, designer than pure Programme manager, using cognitive maps and gaps, and also a business partner understanding the main issues
- Able to redesign the organisation to improve learning and development along with performance requirements
- Liaising with HR and defining a true talent and expertise supply chain management
- Using proper LMS and HRIS
- Where the learning process is based on facilitation not traditional teaching
- Where the performance system is built on relative mastery assessed by masters rather than vague notions of talent
- With an ethos of distributed expertise supported by co-coaches and peer mentorship
As such these requirements cannot be met by the Corporate Universities cum training centers that we know of today which are more based on programme management and knowledge delivery than knowledge co-creation.
In fact the organisational model closest to the one required is the one of a Business School in a matrix-like organisation, with the following adaptations: Objectives and raison d’être are not the same and academic excellence is not the central goal.
Business Schools are collegiums of different academic disciplines: economics, law, finance, psychology and sociology, marketing, operations management and statistics, IS, HR, strategy…their mission is knowledge (co) creation, (research) and diffusion (teaching), but also qualification of participants and corporations through executive education. Surprisingly, they share quite a number of objectives with a highly competitive corporation. Another difference is that business schools place a high value on academic freedom, a virtue not found in corporate life, no matter how many drink bars, chill-corners or chat rooms we find in Google.
Following the metaphor one might imagine the Corporate Collegium of Learning and Development with a Dean, nominated by an Advisory Board, holding some programmes and support functions. It might have a cross-functional matrix-like organisation where one would find different faculty Heads assigned for periods of time to tend to the most critical learning and development paths of the company, in line with the organisational and strategic ambitions of the firm.
These faculty Heads would also be operational or functional heads in the company. But more than anybody else they would know what knowledge is needed and should be shared. As they meet in Executive Committees the discussion would focus on shared learning and development and not only on urgent and immediate decision making.
- New governance and positioning
With this new vision and new missions, the ownership changes.
So intensely connected with strategy, talent and hot issues, and sponsored by senior executives, the ownership is becoming more collegial at the highest corporate level. If the CEO can chair it, it is even better.
HR is still in, but certainly not alone anymore, and maybe not leading it.
The new steering committee is set up around top strategic priorities, which means the participation of main internal/external clients/stakeholders.
In a French large bank, the Corporate University was working only with one third of its clients and managed mostly around training issues in management, disregarding strategy, organisational challenges, qualification of personnel on new regulatory dimensions and new services development. Redefining the “Steering Committee” perimeter and missions became the main decision.
In this large retail company, the steering committee was only made of HR Heads of different countries and subsidiaries, and career development services were underrepresented. The links between mobility, promotion and programmes did not exist.
In this car manufacturing company, those in charge of senior executives were reporting directly to the CEO. Management development was within HR. Thus it was not possible to design programmes or invite this level of participants for pure turf fights reasons.
Under the steering committee, a Programme committee prepares and works out the relevancy of the portfolio of actions vis à vis the priorities.
Key indicators show not only the evaluation of programmes by participants but also by the internal/external clients and hierarchy.
In one auditing mission of a large utility company, the Corporate University did not know that the strategy of the company had changed. The need for the main programmes did not exist any more, but as the steering committee of the Corporate University was mostly HR, this was not known.
When the Steering Committee is too far from the Executive Committee, and when times become difficult, the CFO o CEO may say: “ We are in a cost cutting exercise. We know how much the Corporate University costs, we do not know the return. Let us get rid of it!” And it happens. Some large corporations have experienced it. Come backs are difficult.
- To conclude and let the discussion start.
Corporate Universities face many challenges are things are changing faster.
Technology, cost-cuts, spread, time to deliver, multicultural aspects, multi leadership styles needed, financial performance, differences in learning styles, need for problem solving, just to mention a few, modify the mission and thus the role of the entity and the profile of the Head.
It is time to think it over, again, and again, and become more collegial.