Corporate universities are all business.
Jean Pfeifer worked in the front office at UBS for 10 years as a wealth manager before moving to corporate learning. This was 1998, when UBS was merging with Swiss Bank Corporation (SBC), and Pfeifer’s team was tasked with leveraging training and education to ease that transition. He thought he would spend a year or so in that role before getting back to the business of making money but, in the meantime, he says he discovered that ‘corporate education is not just an activity but a profession.’ He was later made head of learning for western and southern Switzerland before being asked to move to the Zurich headquarters to head up all learning strategy.
Pfeifer is now a consultant, sharing what he has learned about learning and spreading the idea of the corporate university (CU) as distinct from other types of training and development activities. He sits on the board of the Global Council of Corporate Universities, which gathers together Corporate Learning Officers to share best practices and advice on making a learning organisation successful. His advice is in high demand but Swiss Style was able to catch up with him at the Geneva airport just before he departed for Beijing.
By the time Pfeifer became a learning professional the concept of the corporate university had already gained a solid foothold and multiplied considerably in the US—there were at least 2,000 entities calling themselves corporate universities in the states—and European firms were quickly adopting this new strategic lever and integrating it into their cultures. The Italian colossus FIAT was way ahead of the game however, having established its own Organisational Development Institute in 1972. At its peak the institute had 150 full-time faculty members.
Today most multinationals have corporate universities, including big European firms such as Siemens and Nestlé. The Swiss luxury brand Richemont will open a campus in suburban Geneva next year for production, research and training. It will bring together operations from Roger Dubuis, Van Cleef & Arpels, Vacheron Constantin and Manufacture Stern, and learning will be at its core. The Learning and Apprenticeship Centre for Haute Horlogerie will start out with 45 students and have the ability to deliver official certifications.
Of course, not everything called a corporate university ought to bear that title. Attempting a definition in ‘The Corporate University Handbook’, CU expert Mark Allen wrote about a division of a Fortune 500 company that he visited. One day, someone in the marketing department read an article about corporate universities and decided his organization should have one. He brought the idea to his managers, who quickly endorsed it. The first thing he did was come up with a name for their corporate university. This was followed quickly by the design of a logo. Once you’ve got a logo, you pretty much need t-shirts. After several months, they had a name, a logo, some t-shirts, and a budget. What they didn’t have was any staff devoted to corporate education, any dedicated place, or any educational programs whatsoever. Yet the hundreds of employees at this organization said that they had a corporate university and believed that they had a corporate university.
Allen is emphatic in his opinion that having a CU for the purpose of stroking the corporate ego is a bad idea that leads to bad outcomes and wasted efforts. Rather, he advises, the formation ought to be driven by an identifiable need. There are, essentially, five rationales for launching a corporate university, according to Bruno Dufour and Jérôme Wargnier, writing for education consultancy CrossKnowledge. Those rationales include strategy implementation and alignment, leadership and talent development, improving performance, organisational issues and brand image.
Like Dufour and Wargnier, most experts put strategy at the top of the list. Mark Allen has called CU a strategic tool that cultivates learning, knowledge and wisdom. He stressed the word ‘strategic,’ in differentiating CU from training departments, which are typically tactical and operational. Jean Pfeifer discovered this strategic significance when he was sent to Tokyo to establish a learning function for UBS. He had already been in Singapore training 5,000 wealth managers in five years. But it was in Tokyo, he says, that he discovered the power of talent and of learning. He was designated a ‘Key Position Holder,’ a strategic position upon which, he said, depended the success of the bank. The position was responsible for transferring mission-critical knowledge from Singapore to Zurich to Tokyo.
Sometimes the strategic imperative involves re-inventing the business model itself. In his consulting work with GlobalCCU, Pfeifer has taken groups of European business leaders to China on expedition to learn first-hand how to do business there. He mentioned the experience of Ikea whose value proposition is fundamentally based on the model it created: inexpensive but stylish goods, big box stores and a bit of DIY on the part of the customer. But in China the brand was considered more of a luxury good. Customers did not want to assemble their purchases. They could not easily transport them home. And the stores had to be near their customers in the city. In other words, Ikea had to completely re-invent its business model for the China market.
A corporate university is the place to begin addressing the kind of strategic dilemma Ikea faced, according to Pfeifer who calls it ‘a place of innovation, where people meet and re-think the organisation.’ Nestlé has operated a corporate university for 30 years just outside of Vevey. The Rive-Reine International Training Centre welcomes 1,700 Nestlé managers from around the world each year to participate in 70 different courses taught by Nestlé managers. The courses cover management or leadership development depending on the needs of the participants. Management courses focus on internal activities and Nestlé business approaches. Executive courses follow five or 10 years later with an external focus that emphasises industry analysis. The curriculum attempts to strike a useful balance between theory and practise and between Nestlé best practises and examples from outside the organisation. Thus it provides a platform for improving performance of individuals and business units as well as teaching better understanding of corporate values and priorities.
A potential drawback to investing in CU—or any training for that matter—is that employees take their knowledge and experience with them when they leave the company, perhaps en route to a competitor. Thus, some companies question the wisdom of training that increases a worker’s value on the employment market. According to Pfeifer, however, research shows that people are more likely to stay with employers who invest in their development because they figure if they stay they will continue to increase their value. They leave when they feel the employer does not care about their development.
But the benefit that Pfeifer says gets the most positive reaction from companies is when they learn about return-on-investment from CU. That’s because, he says, they can achieve results with almost no cash out. CEOs always like that one.
Article by Peter Carson