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 / Autumn 2009 / Issue 56(originally published by Booz & Company)


Rising to the Corporate Education Challenge

In the near term, these problems will affect only a few labor-intensive industries, such as agriculture, mining, transportation, and utilities. But over time, all industries will face the challenges of an aging workforce: transferring retiring workers’ knowledge to newcomers, developing executive talent, closing skill gaps, and retaining high-potential people. One leading retailer has aimed its learning programs at existing talent, a break from the past, when its development efforts were concentrated on recruiting new employees. By instituting a comprehensive executive coaching program — including individualized development plans and periodic checkups — the retailer reduced executive turnover to 14 percent in 2008 from 26 percent in 2006.

Develop a plan for better use of general education programs. Most large companies offer tuition assistance to help workers fund their education or take courses for personal enrichment. Unfortunately, many companies treat these programs as recruitment or retention benefits, not as a learning tool. This is a wasteful approach. To make sure that these funding programs support corporate learning and career development, companies should track expenditures, counsel employees on the education they should pursue, and make advancement contingent on the completion of degrees or coursework that the company sees as strategic.

• Get senior leadership actively involved. In many companies today, top executives are involved in generating business and functional strategies, but then delegate implementation to support functions or middle management. As a result, there is little institutional awareness at the senior level of the impact of corporate learning. Programs don’t receive the resources they need to be effective, and without executive involvement, accountability for the programs can also become highly fragmented.

It isn’t feasible for a senior executive team to get involved in every aspect of the corporate education curriculum. But top leaders can participate in the development of learning programs and the tracking of results. At one food manufacturer, the senior leadership signaled its commitment by funding a corporate university; this also helped recruit people to its rural headquarters location.

Build Broad Capabilities

Which skills and organizational models must the company pursue?

Create a balance between local and global learning efforts. At large companies, tension often exists between specialized, local learning campaigns that serve the needs of business units and standardized, central resources designed to achieve organizational knowledge transfer and scale. Several companies have successfully addressed this tension through a federated model, in which centralized learning resources coordinate individual efforts and focus on methodologies, tools, metrics, and learning frameworks. Local learning managers then adapt these resources to address their specific business needs. In some cases, local managers may be allowed to develop their own training materials, but they must be certain that similar content has not already been created in the organization and they must make their materials available for company-wide distribution.

Retain strategically important training in-house, and outsource more “generic” learning. Companies often gravitate to one of two unfortunate extremes when they create content for learning initiatives. At one extreme, they make the mistake of developing original content when perfectly good off-the-shelf modules are available. At the other extreme, companies outsource the development of all their learning content. In so doing, they miss opportunities to generate intellectual capital that could be used to create a competitive advantage, and they run the risk that their most valuable coursework will be resold to others.

The best approach strikes a balance: Those in charge of corporate education should create content that relates to core company competencies and outsource content creation (or buy off-the-shelf modules) for learning needs that are more generic, such as understanding a company’s rules of behavior or performance assessment program.

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