WE CAN'T START A CORPORATE UNIVERSITY BECAUSE

From the desk of Lynn Lehman...

Over the last few years, we at CorpU have witnessed an increasing number of companies that want to organize learning around the strategic principles of a corporate university model. With the value of the corporate university model demonstrated in organizations throughout the world, isn’t it interesting that the implementation of a corporate university as a strategic initiative is still the exception rather than the rule?

One possible explanation is that a critical mass of companies with successful corporate university models has not yet been achieved. How, then, do we move the implementation of corporate university models from being a rare occurrence to being a standard business practice? One answer is that we convince more companies that they can – and should – implement corporate universities.

Of course, companies will have their reasons for not considering the corporate university path. Many companies want to make sure that all their “ducks are in a row” before starting the process. This seems very reasonable. However, I would argue that a corporate university could be planned and initiated even when a duck or two are out of line. To use another old adage, companies do not need to wait until all the stars and planets are aligned before starting the process of designing their own corporate universities.

The Excuses

The excuses that companies give for not starting a corporate university are not as valid as many may think.  This is not to say that these excuses are not valid at all. Rather, they are simply not strong enough to prevent action. Examples of excuses that prevent progress are...

1. “We’re in the midst of poor economic times."
2. “We’re too old.”
3. “We’re too young.”
4. “We’re too big (or too complicated).”
5. “We’re too small.”
6. “We don’t know how.”

While one or two of these excuses can be heard in many company hallways, the first excuse is extremely pertinent to all companies because of current events. Among other problems, the world is on a recession watch, gas prices are high, and extremely large financial institutions are filing for bankruptcy protection, are being bought out, or are being rescued by the U.S. government, which is impacting the stock market globally. Times are definitely challenging and our economic future is unclear. Under conditions such as these, should a company even think about putting money into training, which, unfortunately, is so often one of the first things that get cut when money is tight?

“We’re in the midst of poor economic times.”

When making the decision about whether the company is financially able to begin and maintain any company initiative, it is important to consider the overall economy. Most companies will be hesitant – and rightfully so – to begin a large-scale project such as a corporate university if they are unsure about the stability of their country’s (or even the world’s) current or future economy. However, before making a decision not to initiate a corporate university, company leaders must make sure that they are asking the right question. The right question to ask is not whether there is or will be enough money to invest in a corporate university, but rather, will having an effective and efficient corporate university return enough value on the company’s investment to justify taking the risk. One company that took this risk and has benefited tremendously from the results is Caterpillar, Inc., and its award-winning corporate university is known as Caterpillar University.

Caterpillar, Inc. officially restructured its former learning community and implemented Caterpillar University in January of 2001. What is interesting about this particular time frame is that it was the beginning of a recession in the United States. Many countries had been experiencing a recession one or even two years prior to this, and economists predicted that the U.S. recession would be very serious. As Caterpillar had been planning the design of their corporate university since 1998, they certainly had the opportunity to put the project on hold in reaction to the deteriorating economic situation. Instead, they opted to move forward with their plans. (In the end, the recession only lasted the first three quarters of 2001, but of course Caterpillar did not know that would be the case at the beginning of the year.)

The Benefits of Taking the Risk

Why did Caterpillar make the choice to move forward with its corporate university when all economic indicators shouted, “Don’t do it!” (at least not now)? Because the leaders of the company recognized that having a solid and comprehensive learning strategy would increase productivity and revenue, which would, in turn, keep them growing and competitive. It is this particular long-term vision that prompts most companies to establish their corporate universities.

The business impact of L&D learning initiatives are outlined in the Corporate University Xchange 8th Annual Benchmarking Study. The following chart shows how 226 learning organizations responded to a question about the impact that training had on five different categories of business metrics (Part 1).

Source: Corporate University Xchange 8th Annual Benchmarking Study

For four of the five metrics – Improved Customer Loyalty/Satisfaction, Improved Productivity, Reduced Costs, and Increased Revenue – over 50% of the learning organizations that responded to this question indicated that learning had a moderate or significant impact on business outcomes (i.e., they made a positive difference). In the case of Improved Productivity, 71% of the learning organizations indicated a moderate to significant impact.  Considering this data is a compilation from learning organizations at all different levels of maturity (Beginning, Early Stage, Valued Partner, and Strategic Function), the responses speak volumes to the positive impact of learning on business metrics, even at the earliest stages of development.

So did Caterpillar experience the positive business impact that is indicated they should?  In the four years that followed the implementation of their corporate university, Caterpillar University used metrics such as the Kirkpatrick/Phillips five levels, performance scorecards and Return on Learning (ROL) studies and found correlations between all seven of its learning programs and certain important factors for Caterpillar. These “Critical Success Factors" are: Six Sigma, Growth, Cost Reduction, Parts Growth, Rental Leadership, Best Distribution, Quality and Reliability, Best Value, E-business, People and Social Responsibility.

The key here is to realize that back in the late 1990s, Caterpillar did not just suspect that a corporate university would positively impact the business. In fact, with his background in strategic planning and extensive experience in the world of learning and development, Fred Goh, Senior Manager of Learning Strategy at Caterpillar, knew that it would. This is why they moved forward with the corporate university…even during an economic downturn…and have ended up with the extremely successful corporate university from which over 95,000 employees and the company as a whole benefit.

Caterpillar has also identified several key factors that contributed to the success of their award-winning Caterpillar University.  Those that relate to its start-up include the following:

• A burning platform established by original study team
• Excellent foundation provided by the Continual Learning Team
• Partnership with its independent business units
• A great team of dedicated individuals committed to transforming Caterpillar
• Upper management support
• “Journey” chart to convey vision
• Focus on strategic learning
• Enterprise Learning Plan

What is glaring about this list is that a factor related to finances is not found anywhere. Instead, this list highlights purpose, passion, strategy, communication, relationships, and support. Of course, starting a corporate university is not completely free of charge, and Caterpillar acknowledges that if they had to do it over again, they would have established an ongoing funding model up front rather than dealing with that later in the process. If nothing else, companies can take Caterpillar’s lead and begin the planning process even if they are not quite ready to initiate their new corporate universities.

The Planning Process

As already mentioned, the preparation for Caterpillar University began in 1998, and it was not initiated until January of 2001. While it does not always take two years to start a corporate university, it is prudent to take some time to think through and plan all aspects of a corporate university model. And the great thing is…planning the design of a corporate university can take place no matter the health of the economy. 

One of CorpU’s specialties is helping organizations get their corporate universities off the ground. From its years of experience and research, CorpU has developed a model for planning the design of a new corporate university within a 12-week timeframe. This model has seven design phases and outputs for each phase:

CorpU Seven Design Phases:

1. Project Mobilization
   • Project charter
   • Project kickoff workshop
   • Project plan
2. Strategic Learning Assessment and Training Audit
   • As-is analysis
   • Training audit report
3. Benchmarking
   • Benchmarking analysis
   • Benchmarking report
4. High-level Design
   • High-level design plan
   • Executive presentations
5. Business Case Analysis
   • Business case
   • Recommendations
6. Detailed Design and Plan
• Detailed design plan
7. Implementation Roadmap
   • Implementation roadmap
   • Transition plan

Also available in a Gantt chart format, the Corporate University Design Phase model is a straightforward, logical and efficient planning approach that will guide the corporate university design process at any organization.

Next Steps

If your company does not have a corporate university and you believe that one of the excuses stopping progress is the current, unstable economic times, then please re-read this article and reconsider your stance. The design and implementation of an effective and efficient corporate university will increase the strength of your learning and development efforts, improve performance, and positively impact other critical business metrics that could make the next stretch of hard economic times seem like a slight irritation rather than a malevolent beast.

 

Lynn Lehman, CorpU Senior Learning Analyst

Additional Resources (CorpU Members must be logged in to view and download these files):

• Overview of Caterpillar University
• Corporate University Xchange 8th Annual Benchmarking Study
• Corporate University Design Phases