The Rise of Corporate Universities

the rise of corporate universitiesAs more and more companies are recognizing the benefits of investing in ongoing professional development, there has been a surge in the creation of corporate universities (or academies as they’re more commonly known in Europe and Asia). While the definition of what makes for a corporate university can be a bit fuzzy, the Boston Consulting Group found that the number of these universities doubled from 1000 to 2000 between 1997 and 2007, and then doubled again between 2007 and 2011 to 4000. What that means in terms of spending on corporate training is profound, with a 2012 estimate of around $400 billion for G20 countries.

Corporate universities are not a new concept, however. It’s generally accepted that General Motors created the first corporate university back in 1956. MacDonald’s created its own “Hamburger University” in 1961 and since its inception over a quarter-million employees have been trained at one of its seven campuses. The effects of these in-house training efforts have had a really positive ROI, too, with the Boston Consulting Group reporting in 2012 that these “people companies” returned greater shareholder profits than the industry averages in eight out of ten years. Moreover, revenue growth and profit margins were higher by 3.5 and 2.1 times, respectively.

Corporate universities serve a number of different purposes, including many of the following – which naturally overlap.


Increase Growth

As mentioned above, there is evidence showing that investing in corporate training can lead to increased financial performance for companies. Perhaps unsurprisingly, better trained employees perform at higher levels than competitors.


Accelerate Strategic Change & Align with Changing Environment

It sounds cliché, but it’s true – the world is changing at an ever-increasing rate. Keeping up with the inevitable changes can be difficult, especially when you’re talking about an enterprise company with thousands of employees. Often the bigger the company, the more difficult it is to change strategies, as it’s like turning an aircraft carrier – torturously slow. Corporate universities can be a great tool for getting change to take root and for keeping employees up to speed on the current business environment.


Build Skills & Address Skills/Employability Gap

Receiving a freshly minted bachelor’s degree does not really mean that someone is prepared to take on the job responsibilities in all entry-level roles. Getting new employees up-to-speed quickly and with an eye to a company’s particular processes and industry is a critical role of corporate universities. Moreover, hard-skills related to technology are another area that these academies tackle. Technology is moving at such a rapid pace that traditional educational institutions are often years behind with their curriculum. Increasing demands in cutting edge fields like big data, artificial intelligence, and augmented reality can require a full-time educational team to train technical employees.


Facilitate and Encourage Cross-pollination and Knowledge Exchange

In an organization with hundreds to thousands of employees, knowledge sharing can be quite limited. There are often silos within organizations preventing the exchange of ideas and cross-pollination that can come when different functional groups come together. By blending student cohorts at corporate universities, companies can help generate some of this valuable interchange of ideas, plus increase employee bonds across even the largest of companies. This all spells more cooperation and innovation in the future.


Promote Adaptability & Cross-cultural Understanding

You’d be hard pressed to find any medium to enterprise-sized companies without international dealings of some sort, or without foreign offices and multi-cultural staff. Corporate universities can be a tremendous force for promoting cross-cultural understanding. Moreover, they can help imbue employees with a better ability to adapt to a wide range of environments – something that is critical in the increasingly borderless global economy.


Leadership Skills

Like legendary coach Vince Lombardi said, “Leaders are made, they are not born.” Companies often use their corporate universities to grow their employees’ leadership skills and groom people for management positions. As we know from our various leadership training programs, huge leaps forward can be made through proper coaching and instruction, plus exposure to experiential learning programs.


Enhance Employee Engagement and Recruitment through Learning

Keeping employees engaged is hugely beneficial to organizations. It can increase productivity, decrease turnover, and give employees a sense of purpose. All these things create a more positive work environment and eventually benefit the bottom line. Certain organizations not just increase engagement, but also create more allure through their corporate universities which helps attract the best and brightest. With powerhouse institutions like Apple University and General Motors Institute providing cutting edge training, it’s not hard to see how these organizations are beginning to rival more traditional post-grad universities. Plus, if a company can keep employees from studying at a top-tier school through their own free training, they lessen the likelihood of losing a top-performer.


Establish Corporate Culture and Values

Lastly, these organizational education centers act as a device for disseminating and reinforcing corporate culture, norms, and values – and even teach a bit of company history. They enable companies to mold the type of employees they’d like through more effective on-boarding while making sure everyone understands the values that will keep everyone in alignment. Moreover, if the corporate culture needs to shift, the corporate university is there to make sure that the shift maintains momentum and gets buy-in.


For more inspiration on why companies are investing in corporate universities, check out this article eLearningMind which lists some of the more famous institutions like Zappos Insights and Pixar University. And just like this article from the Society of Human Resource Management (SHRM) says, just because you don’t have tens of thousands of employees, doesn’t mean you can’t invest in this type of corporate training. Companies like ours have a myriad of activities and highly trained facilitators to support a wide variety of learning programs. Moreover, we can help shore up training programs at these major corporate universities as well with our fun and engaging experiential learning-focused events.

Doug Ramsay

Doug handles the marketing and web presence for Adventure Associates. If he's not geeking-out with the latest, greatest web marketing tools, then you'll find him swirling and sipping his way through wine country.

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