By Nick van Dam and Silke-Susann Otto
Corporate academies or universities are entering their second century just as the businesses that created them are transforming themselves for the digital age. When pioneers such as General Electric began offering in-house training programs about 100 years ago, they focused on lower-level skills. Full-fledged academies emerged much later: GE’s Crotonville leadership center in 1956; McDonald’s Hamburger University in 1961; and learning institutions for corporations such as Apple, Boeing and Danone in the 2000s. Now, a new phase is unfolding.
In 2014, we queried some 1,500 global executives about capability building. Last year, for a deeper understanding of the present and future of corporate academies, we surveyed approximately 120 senior learning-and-development officers. We also visited best-in-class organizations and interviewed more than a dozen chief learning officers at some of the world’s largest, most successful companies. In addition, we’ve gleaned insights through experience with corporate universities, including McKinsey Academy, our firm’s digital offering, which serves consultants and clients alike.
Most respondents expect corporate learning — both the capabilities imparted and the agility required — to change significantly in the next three years. More than 60 percent of the respondents’ companies plan to increase L&D spending and 66 percent to increase the number of formal-learning hours per employee. What’s worrying is the current level of dissatisfaction. Only 57 percent of the respondents think their academies are very or fully aligned with corporate priorities. Just 52 percent feel that such institutions help their companies meet strategic objectives. About 40 percent of CLOs say their initiatives are either ineffective or neither effective nor ineffective in assessing the capabilities and gaps of employees.
Three performance indicators show how well a learning strategy has been executed: alignment with and measurable impact on the business (business excellence), the effectiveness of L&D interventions (learning excellence), and the efficiency of L&D initiatives (operational excellence). Digitization offers a huge opportunity to transform corporate learning and address its deficiencies. Digital learning tools aren’t new. What’s new is the movement of learning to the cloud, where it’s accessible across devices and where teaching environments are often generated, shared and updated by users.
Sophisticated organizations are expanding their use of cloud-based learning to run personalized applications such as MOOCs (massive open online courses), SPOCs (small private online courses), instructional videos, learning games, e-coaching, virtual classrooms, and online performance support and simulations. One global Asian manufacturer offers a digital 3-D learning environment at its virtual model factory, where employees “see” and “feel” equipment deployed at its plants. Global food company Danone successfully rolled out its cloud-based Danone Campus 2.0 in 2014. Easily accessible and continually updated, employees can actively promote their own development through a digital, user-friendly space where they can share best practices, highlight new internal and external knowledge, and foster collaboration. Learning essentially blends in with daily routines.
Unleashing the power of collective intelligence is critical. In large global companies, L&D can’t own detailed knowledge about the skills a diverse workforce needs, but employees can be empowered to share knowledge and take ownership for personal growth and development. We expect L&D practitioners to become less the authors of what’s taught in digital formats and more the facilitators and curators ensuring that companies can disperse employee-generated content seamlessly.
When learning is automated, consistency improves and C-suite messages go straight to the front line. Yet companies have compelling reasons to locate significant elements of corporate learning in specialized, physical facilities, which help employees to unplug and enjoy a respite from the 24/7 tempo. Millennials benefit from this high-touch learning as much as older workers. Corporate academies give all employees opportunities to share experiences with fellow participants and connect with leaders, some of whom may serve as visiting faculty.
Effective learning, however, calls for deep expertise in its design and delivery and in all processes and systems that support it and integrate it with the business. It’s critical to maintain a core L&D team of specialized, world-class professionals led by a CLO who is a true sparring partner for business leaders and the C-suite, and who ensures that excellence in learning helps a company achieve its essential business priorities.
Digitization is certain, but the future of corporate academies lies in blended learning, which combines classroom forums, in-field applications, personal, results-oriented feedback and online engagement. There’s no magic number for allocating time between digital and in-person learning. What’s certain is that organizations must express commitment from the highest levels, so L&D should collaborate with the C-suite to set educational priorities and funding. Farsighted corporate leaders understand the value proposition: the effects of learning go to the bottom line.
Corporate academies are poised for change on the order of magnitude experienced a century ago. Moving to the next level will require a nimble balance between digital and physical platforms, cultural messaging and technical content, and real-time and actively shared learning. And remember, successfully navigating the coming transformation will require not just a shift in tools and approaches but also an agile, engaged organization.
Nick van Dam is a partner and global chief learning officer at McKinsey & Company. He is also a professor of learning and development at Nyenrode Business University. Silke-Susann Otto is a client service senior manager at McKinsey, focused on building the company’s presence in Myanmar. Comment below, or email firstname.lastname@example.org.