by Kellye Whitney
August 1, 2005
With some 80,000 employees around the world, and nearly half of its workforce outside of the United States, Caterpillar Inc. has a hand in construction, mining, energy and forestry industries. The company spends a significant portion of its annual learning budget working to ensure that the learning it provides is relevant and appropriate.
“We’re doing this to improve performance,” said David Vance, president, Caterpillar University. “It’s about the difference we can make in bottom-line results. That’s why one of our focuses has been getting the strategic alignment to business needs and our critical success factors. Rather than doing learning for learning’s sake or learning for personal development, we want to ensure that the roughly $100 million dollars we spend as an enterprise on learning each year is really helping us achieve our most critical business results.”
Until Caterpillar University’s inception in January 2001, virtually all learning was delivered in the classroom. “Starting three years ago, we began moving toward e-learning where that was appropriate,” Vance said. “There is a lot of learning that we need to do for compliance and knowledge-sharing through a one- or two-hour online e-learning course that people can take not only from work, but from home or the hotel when they’re traveling. People have less and less time available for learning these days even when it is the right learning. If you can take what might have otherwise been a three-day instructor-led class and get it down to two days by taking a lot of that material, which was really just going to be a download, and put that in e-learning and have them do it as a prerequisite up front, people are appreciative of that.”
Caterpillar also has an expansive knowledge-sharing system to aid learning via virtual collaboration, with more than 2,500 communities of practice that people around the world with shared interests can tap into. “People go there and post a question like, ‘I’m a new engineer in a location. I’ve never encountered this problem. Can anyone help me?’ Within 24 hours, they will usually have responses from around the world from people who suggest a solution or someone to talk to, and that saves us an incredible amount of time.”
Time savings also equal a far-reaching productivity boost, since the value chain extends to Caterpillar’s dealer network, as well as its employee base. Almost all dealerships are independent and locally owned, providing equipment, service and financing for customers in more than 200 countries. “Imagine you’re a customer,” Vance said. “You have a piece of our equipment, and there’s something you don’t understand on it, or you want to get better performance from it. You can actually go out into the knowledge network; perhaps there’s a community for your particular type of equipment. You can enter in your question or issue. You could include a picture if you have a question about a part, and not only will the dealer see that, but the factory people will see it, marketing people will see it, different locations will see it.”
Vance was Caterpillar’s chief economist, so metrics are an important topic of conversation at Caterpillar University, which uses five levels of evaluation to define learning benefits in dollars and to establish the return on learning investments, particularly for big, higher-cost projects. “We have a three-stage process where we take the time to try to forecast not only the costs, but the benefits before we begin a project,” Vance said. “We make sure that we fully understand them, and that helps us to manage the project better. Then we’re going to do a check-after pilot. After we’ve deployed it to a hundred or a thousand people, we do a check to see if we are indeed getting that return on learning. Then, at the end of the project, we do an in-depth one to see what the return was. These are examples of this Level 5, or return on investment, calculation.”
Pilot programs that don’t measure up to expectations offer additional learning opportunities, since Vance and his team can pick them apart to understand what went wrong and, if possible, fix and salvage the program. “Is it because we have the wrong target audience? Is there something wrong with the training? What is it that is leading us to not get the kind of return that we expected? We can fix it earlier so that by the end of the project, we have been able to deliver what we want,” Vance said. “Some of these are easier to do than others. The easier ones may be programs to increase quality and reduce warranty costs. The better the training you provide to people on the factory floor—the more we do for assembly, for instance—you expect to see those results, and we do, in lower warranty costs and greater efficiency in the production process. The reason you’re doing this is not to come up with a figure to two decimals—you do it to learn and improve.”
–Kellye Whitney, kellyew@clomedia.com