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Marc My Words: Why Many Corporate Universities Fail, and Some Don't

by Marc Rosenberg

January 10, 2017


by Marc Rosenberg

January 10, 2017

“There is a lot of merit and promise in the corporate university idea. But downsizing and cost cutting (not within the CUs’ control), and a heavy dose of hubris and complacency (certainly within), have been the undoing of many. While hindsight is always 20/20, and pioneering CUs should be given credit for the innovations they drove, tomorrow’s CUs must be as nimble and responsive as the businesses they serve, perhaps more so.”

Corporate universities have been a mainstay of many businesses—and government agencies—for almost 40 years. They all began with great promise and support across all sectors of the organization. Yet many fail. Hubris killed a lot of them, when, for one reason or another, they got carried away with their own perceived wonderfulness, essentialness, and even a little academic-like elitism (hence the name, “corporate university”). It’s no surprise that these institutions were doomed; so let’s not dwell on those contributors.

Instead, if we look at the rise and fall of many CUs, we can identify seven other wrong turns they may have taken on their journey:

1. Building boom and bust

Early on, many corporate universities invested too heavily in bricks and mortar. As learning technologies became more prevalent, CUs faced a dilemma. If they moved too quickly to online learning, some believed they would have problems filling their classrooms and keeping their instructors busy. This could be financially untenable for them. If revenue from classroom programs fell short, there would be no money to finance new technologies; but, worse, if technology really took off, there wouldn’t be enough students to justify the building. A few smart CUs got out of the “physical campus” mentality and blended in “virtual” as soon as they could, cutting their costs and making themselves more agile. Unfortunately, it was too little, too late for others. You can drive around many corporate campuses today, and if you know where to look, you can see the relics (and repurposing) of this expensive building boom.

2. Bloated permanent faculty

Despite goals to the contrary, too many corporate universities became saddled with large, permanent staffs. With little change in the ranks, the expertise of the faculty could wane, and the ability (and desire) of instructors to get back into the field could diminish. Stagnancy—and costs—grew. Again, some smart CUs saw this as a problem and instituted a strong field rotational program to keep the faculty fresh. Others went further, running their operations with few, if any, SMEs or instructors. Instead, they put that responsibility on all field managers. In other words, every manager in the field had an obligation to come to the CU to teach, part time, on a regular basis, as part of his or her job responsibilities (coached by training experts). A side benefit was the wonderful developmental experience for top performers. CUs that were stuck with large, non-mobile (from a career perspective) employees struggled more to maintain their expertise and relevance.

3. Inability to recruit

In some CUs, the perceived diminished opportunity to get back into the field after a training assignment did not sit well with many top performers—who began to see an assignment to the CU as a career dead end—and many of the best and brightest did everything they could to stay away. The existing staff of some CUs became more and more isolated and entrenched over time. Working at the corporate university, the so-called epitome of organizational knowledge and expertise, became a job to avoid. As noted, some CUs built incentive and rotational programs to get top talent to come on board as a temporary but important career assignment, but many others didn’t bother.

4. Scope creep

Although most corporate universities started with a clearly defined charter, as costs rose and the CU needed to attract higher enrollments, many introduced new curricula and programs that, at first, were peripherally related to their core mission, but over time became more unrelated. To quote one CU executive I knew, “If there was a demand for basket weaving, we might consider teaching it.” To be sure, some CUs stuck to their knitting and maintained a steadfast focus on their raison d’etre. They got better and better at a well-defined, highly focused mission, and many of them are still around today.

5. Market mentality

Then there were the CUs that believed the best way to generate more revenue was to become more market focused. This caused some of them to eschew learning expertise for sales and marketing expertise. They began to look like sales organizations, with account executives and customer service staffs. While this looks reasonable on the surface, the transition had unintended consequences, especially for CUs focusing on internal employees. As CUs embraced the retail model, revenue, sales pipelines, class-take rates, and satisfaction scores became more important than performance improvement. “Want to keep your job?” they would overtly and covertly tell their program teams, “sell more enrollments!” And the emerging LMSs were more than capable of keeping track of all this. You get what you measure. If and when those seats didn’t sell, naturally, the CU became an easier cost-cutting target.

6. Failure to truly understand and adapt to technology

Some corporate universities dismissed the rise of learning technology as a passing fad. Others insisted it would never work or it wasn’t for them. On the opposite end, a few went into technology so fast and so hard, without thinking, that costs exploded and few courses actually were produced. They did, however, manage to accumulate closets full of yesterday’s gadgets (junk). Those CUs that embraced learning technology carefully, as an enabler of well-designed learning and development, and not the savior of poor training programs, did much better. They saw technology as part of their expanding toolkit and not as either the holy grail of training or something to fear.

7. Dismissing learning in the workflow

Many corporate universities were slow to recognize the shift from learning in the classroom to learning in the workflow (learning integrated into the work itself). Some still are. Sounds nice, but not their job. It was different in the field. As front-line managers and executives sought to make their teams more nimble and efficient, they understood the need to equip them on the job with the tools they needed to perform better. To be sure, they probably took advantage of some training programs, but they increasingly put more emphasis on field-based coaching and collaboration, performance support, and online knowledge systems and productivity tools. And they often did it on their own, sometimes out of frustration with the CU’s slow response. The CU’s lack of agility in this area isolated some of them, and many never really saw this shift coming.

It doesn’t have to be this way                     

Good corporate universities can avoid these problems, and, if an issue or two should show up, those with “open eyes” can correct their course and become more impactful, instead of disappearing or becoming irrelevant. But the longer a CU fails to make necessary mid-course corrections, the harder it will be to land safely.

There is a lot of merit and promise in the CU idea. But downsizing and cost cutting (not within the CUs’ control), and a heavy dose of hubris and complacency (certainly within), have been the undoing of many. While hindsight is always 20/20, and pioneering CUs should be given credit for the innovations they drove, tomorrow’s CUs must be as nimble and responsive as the businesses they serve, perhaps more so. Corporate university reinvention is very much needed. New models are called for. The corporate university can’t just help foster change; it must, in the oft-quoted words of Gandhi, “be the change.”

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Hindsight is not always 20/20 since in most cases, it is viewed with the mentality that created it. There are serious academics that pierce the envelope and move the insight and understanding ball forward, measuring their views and insights against practical world. This group is useful and important. Then there are la la land academics who think that their pedigree is inherent in their degrees. As the saying goes in the business world, "when dealing with PhD's, it what they can do for you, and what they can do to you." I have experienced both sides of the saying. Most academics create value, many, however, create noise. They should be terminated.
I guess I was referring mostly to academic institutions rather than CUs, which you referred to in your article. Thanks for the read.
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