Corporate Learning Facilities: The Value of a Dedicated Facility

Corporate learning facilities are as unique as the corporations that own and operate them. As with many aspects of corporate decision-making, facilities’ trends seem to go in cycles; from centralized to decentralized, from leased to owned, from utilitarian to extravagant. At any time one company might be centralizing training while another, even in the same industry and market, will be working towards greater decentralization.

Overall there is a tendency to reduce ownership of brick and mortar facilities. E-learning and virtual classrooms have reduced the overall number of rooms needed for corporate learning and has greatly reduced any building plans for new facilities. Some of the companies that still own brick and mortar facilities for executive development are opening those up for use by other companies and users. Many companies use conference centers and hotels for their sessions on an as-needed basis.

There are companies that choose to have signature facilities, but, while it’s really important to have all the ingredients of a good facility, the fact that it’s the organization’s OWN facility isn’t necessarily relevant or practical. There are excellent commercial conferencing facilities that can provide a special atmosphere for executives and leaders to gather and learn together.

Even the people at GE, which boasts one of the signature facilities in the world, talk about how to provide a “Crotonville experience” to people in other parts of the world. The word “experience” is key. It’s all about what the program stands for and what happens within the program. If a company has a facility, they may also feel compelled to use it, even when bringing a group together in another venue would make more sense.

While there’s no question that the experience is more important than the company’s name on the building, that doesn’t negate the intangible sense of being singled out for special attention, in the minds of the people tapped to attend programs there, of special places like the Pfizer Learning Center or Boeing Learning Center’s hillside training facility or Crotonville. Companies that have these facilities don’t necessarily calculate the ROI of the facility, though some companies that rent their facilities to others, like American Airlines, do measure the facility’s bottom line.

Facility Strategy

Executive development facilities tend towards a comfortable and well appointed environment, often located near recreational facilities and resorts. Food service, lodging, overall room layout, and furnishings are intended to support a more gracious experience. Typically these facilities are separate from the work centers of the companies. In addition to the large classrooms there are smaller breakout rooms and boardrooms, to support some of the small group activities associated with group dynamics and collaborative efforts.

Executive learning centers in large, global companies are typically near the headquarters, though often not co-located as the desire to isolate the learners, to a degree, from the common work environment is still desired. Most companies had a primary location where executive training would take place, but some had a second facility to reduce the amount of travel required; one in Europe and one in the United States for example. Most common was the use of rented spaces as needed for executive programs away from the headquarters location.

Since operating a training or conference facility is usually not part of the “core competency” of a company, even those companies that own their own facilities may outsource the running of the facility to a professional organization that specializes in property management. The International Association of Conference Facilities has a clear set of requirements for those properties that are run by its members that many companies also adhere to (http://www.iacconline.com/).

Some showcase corporate facilities

The atmosphere of learning facilities is reflective of the corporate experience and values as well as the learning need. Many companies, such as IBM or GE, use their training facilities as a showcase for their company.

Figure: IBM Learning Center

Natural materials, murals, paintings, plants and even waterfalls add to the feeling of importance behind the learning that is going to take place. The chateau used by STMicroelectronics and the 140 year old farm house at GE’s Crotonville both attest to longevity, stability, style and substance. Three letters almost three feet high announce dramatically that learners are at IBM when they enter the facility at Armonk, NY. Satyam describes their location as “a setting which at once inspires both creativity and discipline”, two corporate values that they want their facility to reflect.

American Airlines

The American Airlines Center was built in 1957, and significantly upgraded in 1991. The property is virtually on the airport grounds at DFW. They now run their facility as a “for hire” space, though through the late 1990’s it was used exclusively for American. In fact, during that time frame, they needed 11 area hotels to handle the overflow for their own training (and spent $ 1 million a year just running shuttle buses!). The American Airlines philosophy was that Flagship U would handle all training, but they realized that that wasn’t always possible, or reasonable. In 1995 they made the decision to market the property externally, and they are having their best year ever, with 60% of the property usage being external. They have some companies that use the property extensively. One large tool maker is using the property 46 weeks a year. They don’t measure ROI – the property is self-sustaining and its success is measured by their bottom line. The gentleman interviewed suggested that a company that wants its own facility should consider existing facilities to buy and renovate rather than building if having the company name on a facility is critical.

Boeing

This older article describes the Boeing Leadership Center in detail:

On the 286- acre campus snuggled against a hillside that overlooks the confluence of the Missouri, Illinois, and Mississippi Rivers in northwest suburban St. Louis, the three lodge buildings that make up Boeing’s Leadership Center provide just the right mix of a secluded, well-appointed, and well-equipped location for the task at hand.

And that task is part academic and part social, providing a central location to help everyone from the company’s chief executive down to newly minted managers hone their work and leadership skills within a custom-designed curriculum.

"Here participants can think about the whole company and their role in it," said Steve Mercer, 60, the executive director of the facility. "The intention is to free the students of all distractions. I tell them, ‘Once you leave the airport you can lock your wallet away. We’ll take care of everything. We just want you to immerse yourself in everything Boeing.’"

The idea of concentrating its ongoing training program at one central facility is a relatively new concept for Boeing, Mercer noted. "Prior to having this facility, Boeing would develop a program and then run everyone through it in a year or so," said Mercer, who came to Boeing from General Electric and its model-learning center in Crotonville, New York. "What’s different about this is that the programs here are ongoing. It shows the company’s commitment to learning as a life-long pursuit.

And because Boeing is in control of what its students are learning, Mercer and his staff of 15 instructors can take the time to design a curriculum that meets the rapidly changing demands of Boeing’s particular business environment.

http://www.workforce.com/archive/feature/22/17/92/index.php

GE

The physical setting and characteristics of the John F. Welch Leadership Center (usually referred to as Crotonville) enhance the educational experience. The campus is located on the banks of the Hudson River and contains the following buildings connected with brick walkways to give the facility the look and feel of a small college campus:

1. Education Building
• 3 amphitheaters of varying size
• Includes “The Pit” which can accommodate up to 100 participants
• Many rooms for smaller groups
2. Learning Center
• Includes the “Great Room” which can accommodate up to 150 people or can be broken into various meeting spaces
• A second large meeting room
• Many break-out rooms
3. Residence Building with 190 guest rooms
4. Fitness Center with tennis, racquetball, volley ball courts; softball field; jogging paths
5. Recreation Center – a converted 140-year-old farmhouse with billiards, darts, and table tennis. Provides a social environment for attendees to unwind at days’ end
   
   http://www.ge.com/en/company/companyinfo/welchcenter/welch.htm

Pfizer

The Pfizer Learning Center in Westchester County is used by their sales organization for training new sales representatives and for leadership development. Pfizer built the facility in the 2000-2001 time frame to “make a statement”, according to the gentleman we interviewed, and reinforce the corporate dedication to the sales team.

They looked at a number of existing properties before making the decision. The Learning Center is right next to a four-star Doral hotel property, which provides the hotel rooms, along with maintenance, food service, IT needs, etc. for the Learning Center. The sleeping rooms are owned by the Doral, and can be rented to other groups or individuals when Pfizer isn’t using them. The meeting rooms, which are completely state-of-the-art, are owned and scheduled by Pfizer, and used exclusively for internal purposes.

The Learning Center programs are used for those elements of sales training that are impossible to do remotely. New sales staff are exposed to senior management, have an opportunity to role play, and get feedback on everything from sales skills, manner of delivering the corporate message, knowledge of product, even dress.

Outsourcing

Executive development tends to take place at facilities with lodging attached and so are typically operated by a company which specializes in lodging and conference centers. The top centers identified by company, such as IBM, GE, Boeing, American Airlines etc. are all operated by vendors on behalf of those companies. This reflects the belief that companies should concentrate on their core business and outsource the rest.

Companies do have preferences for operators of their facilities; IBM, GE and American all use the same company, Dolce International, but each of the major players in the market, such as Marriott, Aramark, and Benchmark, seem to have a list of significant users and properties.

Companies that use existing conference facilities have a large number of options. American Airlines Center is available, as indicated above, as are a number of the IBM facilities. In addition, there are commercial facilities like the Q Center and those connected to universities like Duke’s Fuqua School Facility.

Q Center

Q Center is one of the country’s largest conference facilities and the largest among Chicago training facilities. The contemporary conference commons offers 118 meeting venues in more than 150,000 square feet of flexible space for functions of all sizes – from a private meeting for two to a conference of 2,000. Q Center also provides lodging for more than 1,000 guests as well as dining, superior technology throughout the training facilities and guest rooms, recreation and a host of comprehensive services and amenities including 24-hour security.

• Accommodating training, meetings and events for groups of two to 2,000.
• Equipped with technology that includes wireless Internet connectivity, high-speed Internet access, videoconferencing, and LAN setup and support
• Located on 96 acres in Chicago’s western suburbs
• Just 45 minutes from O’Hare and easily accessible from downtown Chicago

Q Center is located in a private setting on 96 wooded acres along the banks of the Fox River in St. Charles, Illinois, a western suburb of Chicago. It is easily accessible from O’Hare International Airport and Midway Airport as well as other locations throughout the United States.

Duke University

The R. David Thomas Executive Conference Center is a full-service residential conference center affiliated with Duke University's Fuqua School of Business. The Center has been carefully designed to reflect the Fuqua concept of a total learning environment. Located on the prestigious West campus of Duke University, the Center is also known for its excellent accommodations, superb cuisine and excellent recreation. This state-of-the-art facility is available for corporate and association meetings, training sessions and special events.

1. 10,945 square feet of meeting space
2. 25 dedicated conference rooms and breakout rooms accommodating groups from 10 to 75
3. Multimedia, videoconferencing, wireless internet, computers and computer projection
4. 111 guest rooms; guest lounges with fully stocked kitchenettes
5. Executive Dining Room for conference dining
6. Private dining in casual or fine dining environments
7. On-site fitness center
8. Adjacent to the Duke University Golf Club, a Robert Trent Jones Jr. course
9. Wooded nature trails, shopping and museums nearby

Numerous similar facilities exist throughout England and the rest of the world.

Conclusion

While there are no definitive numbers about the ROI of dedicated training facilities, there is some information about the value of live events. According to the 2004 UK Conference Survey:

The survey also said that London was the most popular venue for these events
(http://www.hotel-online.com/News/PR2004_2nd/June04_UKConfMKT.html).

There is clearly a value in gathering executives and future leaders of a company together to network, exchange ideas, and learn from senior people how their roles affect the strategic business goals of the company. Whether it needs to be in a dedicated facility depends on the value the company puts on having a “flagship” place for that to happen.

L&D organizations should spend most of their time and attention designing programs that will focus on strategic business needs, provide the right blend of foundation knowledge and practical application to solve real business challenges, and incorporate significant participation and feedback by senior leaders. They also must define the right nomination and selection criteria so that their programs demonstrate how the organization values and rewards performance excellence.

Offering these high profile programs illustrates the organization’s commitment to investing in people – more than in the facilities where learning will occur. And therefore, program design ultimately will determine whether or not the organization achieves a positive and substantial ROI on its investment in people.