Corporate Universities: They’re Baaaaaaack!

I recently spent a few days in Mexico City meeting with HR and L&D leaders from some of the largest companies in Mexico (Banamex, Pemex, Groupo Modelo, and others).  The meetings reinforced a very important trend which is going on in corporate training today:  the “recentralization of corporate training.”

Over the last five years there has been a tremendous focus on building what we call the “federated” training organization – a model where the centralized L&D function focuses on learning technology, strategic leadership development programs, learning standards, and some key enterprise-wide programs.  In a well run federated training organization the central (a’la the Federal Government) takes clear responsibility for corporate-wide systems and programs, and the federated training groups (a’la the State Governments) take responsibility for training in their functions (sales training, customer service training, IT training, etc.).

We have written extensively about trends in this direction, and we have dozens of case studies and examples of high performing organizations which are learning how to implement this model well.  It takes advantage of the built-in tension within corporate L&D:  the need to centralize for efficiency and sharing, juxtaposed with the need to move training closer and closer to the business problems and operational groups.

The Corporate University

Historically, the term “Corporate University” was used to describe a fairly large, centralized training group which ran a wide variety of corporate programs, often organized into “colleges” which specialize in different functional areas.  For example, at GM there is a “College of Manufacturing.”  Other organizations have a “College of Finance,” using the term “college” to represent a set of programs and curricula designed to meet the needs of these functional units.  The heads of these program areas are even called “Deans.”

This terminology connotes the concept of education, not training.  The idea is that the University will focus on the long term development needs of the organization and will build multi-tiered curricula and career development programs which help employees within these disciplines build skills and careers in the company.

Unfortunately, when e-learning became the rage (starting around 2000 and 2001), many of these “universities” became somewhat obsolete, and over the last 10 years many companies have been disbanding them to build what we called “learning services” organizations.  (I actually wrote a controversial article entitled ‘Death of the Corporate University’ around 2004, identifying this trend.)  The “learning services” organization is a highly powerful concept:  the idea here is that the centralized training group is in fact a shared services team which provides LMS services, content development services, and other types of learning services which are used by employees and federated training groups to improve performance.

The “learning services” model is patterned after the same transition which took place in IT.  IT departments have moved from “data centers” into “IT service centers” which provide direct support to business units, employees, and strategic initiatives through applications, networking, personal computers, and a wide variety of tools.  Instead of only “running systems,” the provide “IT support at your desk.”  Similarly, Learning Services organizations provide “learning services” at the point of need, and they do not only “run courses.”

Enter Talent Management and the New Corporate University

Enter the tremendous need for integrated talent management.  Today, thanks to the aging workforce and many other changes in employee demographics, organizations are in desperate need for integrated talent management solutions.  They now need integrated career development programs, onboarding programs, and a wide variety of what we call “talent-driven learning programs” to fill gaps in the leadership pipeline, an under-educated workforce, and the influx of younger workers.  Such solutions require a greater level of investment in the centralized learnign and development organization, and this has created a “new type of corporate university.”

Corporate University at Banamex

For example, at Banamex in Mexico (Citibank of Mexico), the Corporate University not only manages leadership development and operational training, but the organization has recently developed several degree programs, taught by local professors and business leaders, to deliver Bachelors and Masters degrees to Banamex employees.

The program leverages virtual classroom technology to enable employees from all over the country to participate.  Employees take classes and do homework at night, and they receive accredited degrees.  The program includes basic educational training and many Citibank-specific topics in loans, customer service, and operations.   The results have been fantastic:  employees must be nominated to attend (only high-performing and high-potential employees are included) and hundreds of employees are participating.

What is the value of this program?  There are many benefits:  first, the program develops tremendous levels of retention and employee engagement – people greatly respect the company and those that can complete the program are employees for life.  (They do have a two year commitment to stay with the company after completion, otherwise they must pay back tuition fees.)  Second, the program fills needed gaps in employee skills.  Mexico is a country with highly motivated people but a tremendous lack of educational opportunities.  Many of these employees would succeed in a university setting but did not have the financial resources or access to education before they went to work.  Third, this program is a career-development program which improves employee performance.   These people are not only learning accounting, math, and financial skills – they are also learning how to manage accounts and run the bank.

We have been talking with dozens of companies going through similar “recentralization” projects in their corporate learning.  These include Cardinal Health, Wellpoint, Caterpillar, and even GE.  While we still do not believe that a large centralized corporate university is the right solution for many organizations, talent management is clearly creating a tremendous need to “recentralize” much of L&D.