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- 1. Learning at the speed of business What digital means for the next generation of corporate academies. by Richard Benson-Armer, Arne Gast, and Nick van Dam Corporate universities areenteringtheirsecondcentury,justasthe businessesthatrelyonthemaretransformingthemselvesforthedigital age.WhenpioneerssuchasGeneralMotorsandGeneralElectricbegan offeringstandardizedin-housetrainingprograms,about100yearsago,they focusedonimpartinglower-level,day-to-dayskills.Backthen,itmayhave seemedfancifultoimaginethefull-fledgedacademiesthatwouldemerge inlaterdecades.Butemergetheydid:GE’sCrotonvilleleadershipcenter,in 1956;McDonald’sHamburgerUniversity,in1961;andtoday’struelearning institutionsforglobalcorporationssuchasApple,Boeing,andDanone. Nowanewphaseisunfoldingattheseorganizations,whichmustgrapple withtoolsandplatformsthatfacilitateknowledgesharingandemployee interactionsonanalmostlimitlessscale,challenging—andsometimes appearingtosweepaway—theoldbrick-and-mortarmodel(exhibit). WHERE THE FINDINGS LEAD In2014,wequeriedsome1,500globalexecutivesaboutcapability building.Lastyear,wesharpenedourfocus,surveyingapproximately 120seniorlearning-and-development(L&D)officerstogainamorein-depth understandingofthepresentstateandprobabletrajectoryofcorporate May 2016
- 2. 2 academies.1 Wealsoconductedmultiplebenchmarkingvisitsatbest-in-class organizationsandinterviewedmorethanadozenchieflearningofficers (CLOs)withexperienceatsomeofthelargest,mostsuccessfulcompanies aroundtheworld.Ourfindingsderive,moreover,frominsightswe’vegleaned throughpracticalexperiencewithcorporateacademiesglobally.That includesMcKinseyAcademy,thisfirm’sdigitaloffering,whichservesnot onlyourconsultantsbutalsoourclients,tohelpdevelopleadersandbuild functionalcapabilities. Thegreatmajorityofourrespondentsexpectcorporatelearningtochange significantlywithinthenextthreeyears—boththecapabilitiesimparted andthenewagilityrequiredtomatchthefasterpaceofbusiness.Mostalso acknowledgethatthesedevelopmentswillprobablyhaveamaterialcost: overthatperiod,morethan60percentoftherespondents’companiesplanto increasetheirlearning-and-developmentspendingand66percenttoincrease thenumberofformal-learninghoursperemployee. What’sworryingisthelevelofdissatisfactionwiththestatusquo.Only 57percentoftherespondentsbelievethattheiracademiesare“veryorfully aligned”withcorporatepriorities.Evenfewer(52percent)reportedthatthese institutionsenabletheircompaniestomeetstrategicobjectives.About 40percentofCLOssaythattheirinitiativesareeither“ineffective”or“neither effectivenorineffective”inassessingthecapabilitiesandgapsofemployees. Theseshortcomingsaremostpronouncedamongmidlevelmanagersand seniorleaders—reflecting,inourexperience,howdifficultitistoinstillnew attitudes,particularlyatthehigherlevelsofacompany. Manyrespondentsalsothinkthattheseorganizationsdon’tsufficiently deploythefullarrayoflearningtools,methods,andapproachesnow available.Theyreportthatclassroomtraining,experientiallearning,andthe on-the-jobapplicationofskillswereinregularuse.Butlessthanhalfofthe organizationsavailthemselvesofpeerandself-directedlearning,educational initiativesthattakeparticipantsoutsidetheircomfortzones,orrisk-free learningenvironments.Aboutone-thirdoftherespondentsreportedthat theirorganizationslacksystemstosharelearningamongemployees.And thesurveyedCLOsoverwhelminglythinkthattheirorganizations’digital capabilitiesaretoolow. 1 The respondents’ organizations spend roughly 4 percent of their payroll budgets to build capabilities and invest about 34 hours per employee a year in formal learning. Research, both by us and by others, suggests that the ratio of learning expenditures to payroll is generally inversely proportional to an organization’s size. The Association for Talent Development (ATD), for example, reported that small organizations invest about 5.4 percent of payroll on learning, midsize organizations 3.0 percent, and large organizations 1.7 percent. See State of the Industry, Association for Talent Development, 2015, www.td.org.
- 3. 3 THE DIGITAL LEARNING OPPORTUNITY Digitizationoffersahugeopportunitytotransformlearningandaddress someofitscurrentdeficiencies,thoughitbearsnotingthatdigitallearning toolsarenotnew.Whatisnew—anddisruptivelyso—isthefactthatthe contentoflearningismovingtothecloud,becomingaccessibleacross multipledevicesandteachingenvironmentsandoftenbeinggenerated, shared,andcontinuallyupdatedbyusersthemselves. Unsurprisingly,ourresearchindicatesthatyoungeremployees—millennials andpostmillennials,orGenerationZ—feelthegreatestlevelofcomfortwith digitization.AtChinaFortuneLandDevelopmentCompany(CFLD),Han Qing,theheadofCFLDUniversity,explainsthat“deployingdigitallearning andusingtechnologyispartofourstrategybecausetherearemoreandmore youngpeoplejoiningtheworkforce.TheyareusedtomobilephonesandPCs. Andtheydemandmoredigitallearning.” Integratedcloud-basedplatformsenablemorethanjustnewcomputer programsorniftysmartphoneapps.Sophisticatedorganizationsarenow expandingtheiruseofcloud-basedlearningtorunsuchpersonalized applicationsasMOOCs(massiveopenonlinecourses),SPOCs(smallprivate onlinecourses),instructionalvideos,learninggames,e-coaching,virtual classrooms,onlineperformancesupport,andonlinesimulations. Exhibit Analytics for learning to enhance performance and measure impact Workplace learning that is core to a company’s culture The corporate academy of the future Mobile platforms for learning at your fingertips In-person classroom experiences that are high impact and immersive The next generation of corporate academies supports learning at the speed of business. Physical separation from the “daily grind” to develop new skills and behavior Cloud-based learning that is mobile and multiplatform Use of big data and predictive analytics to improve learning continually A culture of social learning, real-time feedback, sharing, and networking Web 2016 Corporate academies Exhibit 1 of 1
- 5. 5 Theimpactoftoday’sbestsystemsandtoolscanbejustasprofoundas Amazon’s,eveniftheresultsaren’talwayspreciselymeasurable.Asan executiveatoneleadingglobalcompanynoted,investinginmodernlearning- and-developmentplatformsissofundamentalthatittranscendssimple metrics—akintobuildingahouseandthentryingtomeasuretheROIof theplumbing.Despitetheabilityofdigitalplatformstomakethecollection, analysis,andscoringofdatamoresophisticated,thefullmeasureofimpact can’tbecapturedtothedecimal. THE ENDURING CASE FOR (AT LEAST SOME) BRICKS AND MORTAR Similarly,forallofthenotableadvancesthatdigitizationpromises, comprehensivelearningcannotbebasedonthecloudalone.Companies stillhavecompellingreasonstolocatesignificantelementsofcorporate learningintangible,specializededucationalfacilities—increasingly,with ergonomicallydesignedfurniture,plentyoflight,andinteriordesigngeared specificallytolearning.Inourexperience,anysuccessfuleducational programallowsemployeestounplugandenjoyarespitefromanalways-on, 24/7tempo. Theimportanceofthisphysicalseparationfromthedailygrindshouldnotbe underestimated.Ifemployeeshavenoopportunitytostepawayfromtheir workingenvironments,thesameoldbehavior,forgoodandill,isconstantly reinforced,andthechanceformorereflective,committedlearningis lost.HarvardprofessorRonaldHeifetzcallsthisa“balconymoment”:the imperativeforleaderstoleavethe“dancefloor”periodicallyandreflectonthe patternsandmovementbelow. Dedicatedlearningfacilitiesalsobefitthegravitasofaprofessionalfunction. Howevervirtualbusinessmaynowseem,westillbelongtoaphysicalworld; evenAmazonrecentlyestablisheditsownphysicalbookstores.It’sworth noting,aswell,thatmillennialsbenefitfromhigh-touchlearningnoless thanworkersfrompreviousgenerationsdo.Youngeremployeesmayspend moretimeonlineandbemorecomfortablewithmobileapplications.Butthey shouldnotbeforced—and,inourexperience,don’tdesire—toengagesolely withdigitallearningtools. Indeed,corporateacademiesprovideanunparalleledopportunityfor employeestoshareexperienceswithfellowparticipantsandtoconnectwith companyleaders.Manybest-practicecorporateacademiesdeploytheirtop executivesasvisitingfaculty;GE,forinstance,haslonguseditsmostsenior leadersinmanylearningprograms.AmajorAsianoilandgascompanywe knowincludesthenumberofdaysseniorexecutivesspendinsuchteaching
- 6. 6 capacitiesintheirperformanceevaluations.Thevalueofthisinteraction isparticularlyhighforcompaniesthatoperateacrossbusinessesand geographies. Thatsaid,learningisanexpertise,nolessthandisciplinessuchas marketingorfinance.It’sthereforecriticaltomaintainacorelearning- and-developmentteamwithprofessionalsinthatfield.We’veobservedthat toomanyLDorganizationsareledbyemployeesfromothercompany functionswho“graduate”tomanagingLDafewyearsshortofretirement. Companiesthatareseriousaboutmodernizingtheirskill-buildingeffortsas digitizationtransformscorporatelearningmustattractanddevelopleaders withdeepexperienceinthisuniquefunction.Someglobalorganizations areevensendingseniorpersonneltoanewexecutivedoctoralprogram, launchedbytheUniversityofPennsylvania,designedspecificallytoprepare CLOsandotherseniorexecutivesforsuccessaseducationalandtalent- developmentleaders. TYING IT ALL TOGETHER Ultimately,webelieve,thefutureofcorporateacademiesliesinblended learning,whichcombinesclassroomforums,in-fieldapplications,personal andresults-orientedfeedback,andonlineengagement.Thereisnomagic numberforallocatingtimebetweendigitalandin-personlearning;different industries,anddifferentcompanieswithinthem,mustdeterminethe mixthatmakesthemostsensefortheircircumstancesandcapability- developmentpriorities.Connectivityallowsorganizationstomeetmanyof themostimportantlearningobjectives:avoidingdisruptionsinday-to-day business,deliveringcontentconsistently(asopposedtoin-persontraining withdifferentfacilitators),andsustaininglearningforemployees(who reviewthecontentaftertheendofeachlessonandthenupdateandshare theirnewknowledgeinrealtime). It’scritical,too,foranorganizationtoexpressitscommitmentfromthe veryhighestlevels.Justasthedigitalandphysicalelementsoflearning mustfittogetherinarationalway,LDshouldcollaboratewiththeC-suite toensuregeneralagreementoneducationalprioritiesandtherequired funding.“IfLDisnotastrategicpartnerfortheimportantinitiativesofthe company,”notedtheCLOofoneEuropeantelecomweinterviewed,“you’re justworkingreactivelywiththeotherbusinesses.Inourcompany,thereis astrongalignmentbetweenlearningandouroverallbusinessstrategy.But that’sbecauseofastrongpushfromtheCEO.” Farsightedcorporateleadersunderstandthevalueproposition.When criticaltrainingprogramsbecamemandatory,aleadingfinancialinstitution
- 7. 7 wearefamiliarwithboosteditslevelofengagementandmoraleandhalved itsabsenteerateforkeypositions.Acrossmanydimensions,theeffectsof corporatelearning—especiallyinthedigitalage—willfindtheirwaytothe bottomline. Corporateacademiesarepoisedforchangeontheorderofmagnitude experiencedacenturyago,whentheydevelopedfromlow-levelworkshops intomatureinstitutions.Thedisruptionnowunderwayisremarkable, representingatransformationevenwhencomparedtowhathadbeen standardpracticesattheendofthe20thcentury,whenthefocuswaslargely onclassroom-basedlearning.Achievingthenextlevelofchange—akinto therevolutionthatAmazonbroughttoretailing—willrequireanimble balancebetweendigitalandphysicalplatforms,culturalmessagingand technicalcontent,andreal-timeandactivelysharedlearning.Thesudden emergenceofamoredigitallyengagedgenerationandthestepped-uppace oftechnologicalchangesuggestthattimeisoftheessence.Successfully navigatingthecomingtransformationwillrequirenotjustashiftintools andapproachesbutalsoanagile,engagedorganization. Copyright © 2016 McKinsey Company. All rights reserved. Richard Benson-Armer is a director in McKinsey’s Stamford office, and Arne Gast is a principal in the Kuala Lumpur office. Nick van Dam, a principal in the Amsterdam office, is McKinsey’s global chief learning officer. The authors wish to thank Jacqueline Brassey, Andy Moffit, Nicolai Nielsen, and Silke- Susann Otto for their contributions to this article.