In the mid-fifties when GE was expanding its operations across the globe, the president of GE, Ralph Cordiner decided to set up a corporate university an hour away from New York spread over 59 acres. In 1956 GE offered its first course that spread over 13 weeks. Today no executive can imagine spending a full quarter of the year sitting in a classroom. While the courses that are offered at Crotonville have become shorter, the efficacy of the investment remains unquestionable. The headhunters refer to GE as a leadership factory.
GE is not alone. McDonalds set up its Hamburger University in 1961. When Steve Jobs hired Joe Podolny, the then dean of Yale to start Apple University in 2008 it made a big splash. Apple University drew faculty members including professors from universities like Yale, Harvard, Berkeley, Stanford and MIT.
The trend of corporate universities is on the rise. The companies have a large employee base that ranges from 8,000 to 300,000 employees or more. They cut across sectors and businesses from automobiles to pharma and everything else in between. General Motors Institute, Caterpillar, Unilever, GDF Suez, Veolia, Axa, Sanofi, Novartis, Petronas, and many more.
In 1993, corporate universities existed in only 400 companies. By 2001, this number had increased to 2,000, including Walt Disney, Boeing, and Motorola. According to BCG, there are estimated to be more than 4,000 companies with formal corporate universities.
Scale: McDonalds serves 68 million customers daily in 119 countries across 35,000 outlets. This complexity requires training. That ensures that McDonalds burgers taste the same from Mumbai to Moscow.
Complexity: When surgeons move to the operating theater they rely on checklists. These lists reduce human error, and help the surgeon to operate with speed without having to stop and double check if they are missing any step. In performing complex tasks through collaborating teams, speed comes through training in standard processes and procedures. Apple University teaches employees that they’re at the company to be the very best at one specific task.
Corporate Governance: Governance needs the ability to manage reporting relationships, finances, and facilities. Compliance and risk management demand investments in training. On any given day two billion people use Unilever products across countries that have different rules and regulations. This scale and complexity demands constant investment to ensure standards are not compromised.
Education: Entry-level hires are drawn from a wide variety of educational backgrounds. There is a need to bring people to a common minimum level of knowledge and skills. From technical skills or domain knowledge or personal competencies, people need to keep upgrading.
Values and Culture: The leaders need to be role models of the values the company proclaims. When the majority of employee responses to everyday situations become uniform, it forms the culture of the organization. Tying the professional development to strategic challenges is a strong reason to invest in training.
The culture of the organization has to support its vision and strategy. This needs a place when people can come together and connect with others and learn. Technical training can be delivered through e-learning modules. It is the intangibles like culture that people need to learn from role models.
Eg: Self-driving cars by Google aim to reduce road accidents by eliminating scope for human error. Since these run on technology and no human driver is required, there is no scope for human error.
