HR Magazine - February 2000: Corporate Universities 101

Vol. 45, No. 2




Corporate universities can augment training programs and teach employees strategic lessons

Employees coming into companies or moving into management are probably accustomed to visiting the HR department, filling out paperwork and receiving a packet of information welcoming them to their new positions. They may have even received a War and Peace?sized handbook explaining their new duties or watched a company video.

But these days, they also may have been sent to corporate universities—a growing aspect of employee training at both large and small companies.

On-the-job training has changed over the years—but never so drastically as in the past five years. Business is moving at the speed of light, thanks to technology and a booming economy. Corporations and even small businesses not only have a vested interest in recruiting the best for their companies, they also need to keep employees working at the top of their games once they are hired.

And one of the most fundamental and cost-effective ways to do this is to train the employee at a corporate university.

The shortened shelf?life of information, which can expire with two clicks of a mouse, has forced corporations to take on new roles, says Jeanne Meister, author of Corporate Universities: Lessons In Building A World-Class Work Force (McGraw?Hill, 1998) and president of Corporate University Xchange, a corporate education consultant firm in New York.

"The corporation is becoming more of the educator," Meister says. "By the time you get out of school, you need a whole new set of skills in order to make it in the workplace. The corporation has to step up and become the educator of the workforce."

A recent college graduate can't be expected to have a confident handle on the changing world of business the moment he enters the workforce because the rules are being rewritten daily. Meister sees the new role of educator for corporations as crucial to their survival.

Corporate University Xchange helps companies build or revitalize their corporate training and teaching programs. In her experience, a good university is built around the premise of using it as a conduit for broad knowledge, in contrast to orientations and training programs that teach specific skills.

What's the Difference?

A conduit for broad knowledge? Isn't that just putting window dressing on your old-fashioned training program? In some ways it is because employees still have to go through training classes and orientation modules. But, the corporate university model is designed to promote learning and to cultivate a sense of the company's vision for its employees, says Meister. The corporate university is focused on creating organizational change and providing employees with a clear understanding of what the company's vision is for the future and how their hard work will effectively move the company to that goal.

In other words, corporate universities focus on being proactive while training programs are more reactive. Corporate universities strive to be more strategic in scope, while training programs tend to be more tactical. University outcomes are more often aimed at overall increased performance, while training program outcomes often lean toward increased job skills.

"The corporate university embraces the vision of the leadership, not just the skill required for the execution of the job," says Carrie Rowland, director of education worldwide at the public relations firm Burson-Marsteller in New York.

"The role of the university is not to get [employees] thinking alike but to give them the analytical tools and skills and [to] encourage them to think differently and to challenge," says Steven Kirn, vice president of innovation and learning development at Sears Roebuck & Co. in Hoffman Estates, Ill. "Training gives you skills, but it doesn't ask you to think differently."

No one says that the corporate university is the be-all, end-all of training. In fact, there should be a balance, experts agree. Corporate universities are often umbrella programs that cover all aspects of training in the company, says Kirn. Sears University, for example, is the umbrella organization for educational development activities in Sears; but it does not encompass technical training such as auto shop programs or appliance repair programs, which are taught separately.

Evolution of Corporate Universities

Corporate universities are not a new idea. General Motors was the leader, developing the General Motors Institute in 1927. But no one really followed suit until the late 1950s when a number of corporate universities were developed, says Meister.

General Electric introduced Crotonville Management Development Institute, and Walt Disney developed Disney University in that decade. Corporate universities did not see another resurgence until the 1990s. In 1988, there were about 400 corporate universities, says Meister. Now she estimates there are more than 1,600. If future growth continues at that pace, corporate universities soon will outnumber traditional universities, which currently total around 3,700.

To explain the role of today's corporate universities, Meister refers to the three C's: Corporate Citizenship, Contextual Framework and Core Workplace Competencies. The goal of a university is to communicate the company's vision to all employees, from the clerical staff to the CEO, and to help employees understand the company's values and culture so they know what the company is trying to achieve and how they can help the company succeed.

Just 10 years ago, companies focused on teaching their employees the skills they would need to do their job properly, without giving them a sense of how they and their jobs were valuable to the company and its future. Without this reference to the company and its goals and ideas, the employee can feel disconnected and less motivated. With this reference, or the three C's, employees can see a clear link between what they are doing and how they are helping the company to move toward its goals.

"People are doing their jobs without seeing the big picture," says Meister. "If we give them the big picture, you have redefined the orientation from a one?time event program to a strategic learning process for the individual."

Creating a Corporate University

Most large companies, such as McDonalds, Target, Saturn, Intel and Motorola have their own universities; some have their own campuses and renowned training programs that other companies emulate or even attend.

Meister says that if a company wants to stay competitive it will have to institute a corporate university of some sort. This means building a team to take charge of a program that entails moving all training courses throughout the company under the university's umbrella. Most companies do not have the resources for a physical campus, but they find some type of learning institution to hold the classes. This can be tricky if your company is global, with multiple offices in different countries.

Steven Tallman is vice president of training at Bain and Co., a management consulting firm with 26 locations in 20 countries. To help centralize its learning center, the company created a virtual university on the web.

"We've had over 1.2 million hits," says Tallman. "On average, we are getting 50 hits per month per consultant."

More than 160 different training modules are online, and each consultant has the virtual university on his or her desktop for easy access. The modules cover everything from strategic management tools to cash flow models, people development and teaching and mentoring, says Tallman. It's been in operation for 18 months. Tallman also notes that the company puts its employees through formal classroom training as well.

Kirn notes that Sears's curriculum for middle managers is designed to improve the managers' abilities. Some examples of classes taught are advanced finance and team building for the first-time manager.

Amie Malkin, director of brand marketing practice, is also a learning coach at the Burson-Marsteller university. She volunteers her time to help teach and supervise classes at the university. One of the major components of the curriculum is a mock business case that is followed through from the first class to the last, says Malkin.

"It's a fictional case that is based on fact," says Malkin. "Many things are dead on with day?to?day experiences. It's so close to the real thing it's almost not theoretical."

Not only does the case touch on the large picture of solving problems, but it also helps students gain skills such as client relationship management, staff development and confidence to make judgment calls, adds Rowland. It's a way of teaching them new skills in a day-to-day format that will be more relevant to actual experiences in the real world.

Small Companies Aren't Out of the Race

Should smaller companies develop a corporate university? Yes, says Adam Eisenstat, director of communications at Corporate University Xchange.

"A corporate university is a state of mind," says Eisenstat. "Strategic training is not limited to the big players."

Managed Business Solution, a data processing consulting firm in Boulder, Co., and GlobalNet, a global translation service in Pittsburgh, are two examples of smaller companies that have initiated corporate universities.

"We are a small company," says Burson-Marsteller's Rowland. "We have 2,000 employees. We all recognize how important this is. Smaller businesses are crazy not to do this." Rowland adds that a small company with just a few employees would not want to create a formal university. Instead, he recommends adapting the format and principles. Let workers see the company's goals and how they can effectively help the company achieve those goals, he advises.

"We spend about 3 percent of our payroll on learning costs," says Rowland. "We are very lucky; most companies will only commit 1 percent."

What a Corporate University Needs to Be

The key to a successful corporate university is flexibility. Without flexibility of teaching methods, scheduling and modes of learning, the venture may be short-lived or ill-effective. Employees are busier than ever and, without a flexible learning environment, employees will not only find it hard to learn, they will be unable to apply what they have learned to their jobs, says Meister.

"Companies recognize that as everybody's job is changing so fast, they are going to expect you to learn on your own time," Meister says. "They are going to give you the opportunities that are as flexible as possible and let the learning be decided by you and how you want to go through the program."

Sears has various ways for the employee to learn, says Kirn, including CD?ROM programs set up in all the stores and audio and videotapes with workbooks that employees may check out of its library.

Each type of company will dictate the modes, different courses and curriculums that its university offers, according to the easiest and most efficient way for its employees to learn. Should the company have a number of different classes for different level managers? Should it only be on the Internet? Should you have both of those methods available? These questions are all answered differently. A great deal depends on the company's already established learning programs.

The choice may be to build upon those, to use those as a supplement to a new program or to start all over. This is where consultants can help, or companies can also go to other corporate universities, some of which market themselves and their knowledge.

Although flexibility gives freedom to employees, it may also be tricky if the company is unionized. Meister recommends working with the union, which may mean making them part of the education board in the company, to help smooth over rough patches related to employees learning on their own time.

Potential Pitfalls

Flexibility is just as important to the core curriculum as it is to the modes of learning.

"You have to stay fresh," says Rowland. "If we don't stay in touch with the company and the business world, the program will lose its vitality and credibility. It constantly evolves."

Another item to consider is oversight of the program. According to Meister, 63 percent of all corporate universities report to a senior HR person; the others often report to the chairman, CIO or CFO of the business. Identifying the overseer of the program as well as determining how to integrate the current training program with the corporate universities can be stumbling blocks. One solution is to develop a team in charge of the corporate university and to have them envelop the other training programs during construction of the university.

Russell V. Gerbman is a freelance business writer based in Murfreesboro, Tenn.