Making The Headlines

Businesses Shun Business Schools For 'Corporate Universities'

Corporate universities are on the rise as businesses develop their own courses in-house, and spurn the executive education courses coveted by business schools.

Written by Seb Murray | Making The Headlines | Tuesday 29th July 2014 17:14:00 GMT


© tashatuvango - Fotolia.com

© tashatuvango - Fotolia.com

Unipart Group is not just a business; it is a business school – a corporate one.

Nearly 30 years ago the company’s management team realized that they needed to gain a competitive edge in their market to stay afloat. That would only happen by improving both the capabilities and attitudes of its employees.

The corporation looked at outside management training – executive education often sold by business schools – but they were unimpressed with the external offering. “You can buy it at a university [or] a private provider, and people could go away to country houses and spend a week learning,” says Frank Nigriello, Unipart Group’s director of corporate affairs.

“You get a lot of information in a short space of time, and come back with it – but only ever use 10%.”

So, rather than fork out for expensive private courses, UK-based Unipart invested £2.5 million in setting up an internal development operation, the Unipart U.

“It proved so powerful that the leadership team recognised in a small space of time that the learning and development of people would give them a competitive edge,” says Frank.

The company, which evolved from British Leyland about 20 years ago, operates manufacturing, logistics and consulting arms. Unipart has 10,000 employees globally. Last year the company posted turnover of more than £1 billion, up by £45 million from a year earlier. Total operating profit was £26 million.

Corporate universities are nothing new, but their popularity among businesses has increased over the past few years. Many companies like Unipart are ditching business schools and developing their own in-house training schemes.

“Companies are faced with the performance outcomes of… financing, bureaucracy, conservation and, somewhat paradoxically, innovation obligations,” says Annick Renaud-Coulon, chairman of the Global Council of Corporate Universities, a private network for corporate universities.

The GlobalCCU has member companies from 50 different countries, and the figures are increasing “each week”.

“What businesses expect from their corporate university is to optimize their overall performances in human, economic, communication, financial, social, environmental and technological dimensions,” she adds.

Business schools are masters of the short-course programs tailored to individual companies. But they cannot work on the culture or the identity of an organization, says Annick. She adds: “In reality it is very difficult to address some specific, and sometimes confidential, topics and issues when you do not belong to an organization.”

There are similarities to the learning and development function of a human resources department, but corporate business schools have distinct practical differences.

“The classes are taught not by professors but by managers and employees who are experts,” Frank says. “It’s about active learning and engaging adults in learning, in a way that isn’t chalk and talk,” he adds.

Unipart has rolled out hundreds of courses over the years, says Frank, based on the philosophy that people learn in the morning and do in the afternoon. “We set a goal to learn at ten and do at 11.”

Unipart’s courses are focused on short, bite-sized learning. In 1996 the company introduced e-learning – Unipart U online, which has cost “millions”. “It’s like a giant online encyclopaedia, with video, online games and different types of learning,” Frank says.

It looks costly on paper. But the platform uses simple technology, says Frank. “We can deliver relatively simple, high quality and thought-out, complex learning.” The Unipart U has programs which lead to national vocational qualifications, and provides assistance for more senior staff.

Many corporate universities work with traditional business schools. They are not generally able to manage all their learning needs themselves, says Annick. “Some of them co-create customized accredited degree programs with education systems.”

She adds: “Working together provides the capacity to aid companies and organizations better meet the challenges they currently face.”

However, many firms go it alone. Developing an executive education course at a business school can be costly. “With such a budget it is possible for a corporate university to develop learning activities for many people,” Annick says.

But many companies value the fresh perspectives that schools bring to the table. The view from the outside is often advantageous.

Unipart dismisses this notion. “We have a principle within our company, which is learn from the best in the world but don’t copy,” says Frank. He believes the company can learn from its customers organically. Unipart’s clients include Honda and Toyota, Frank says.

Still, delivering an accredited program internally is attractive to managers. “The value can be attractive for employees when it is essential for taking on new responsibilities, or when it is delivered by a big multinational company, as the accreditation can be put on a CV,” says Annick.

The benefit to businesses is clear: better-trained talent. “If companies create a corporate university, it is not because it is fashionable, but because they expect a return on investment,” Annick adds.

Businesses are able to implement specific strategies, and train their managers on niche topics related to their fields in a short space of time.

Firms are often faced with opportunities that cannot be grasped, due to daily plans, business commitments and bureaucracy. Annick says: “The strength of corporate universities is being able to intervene at impromptu moments and on impromptu subjects.”

Unipart may have spent millions, but they have seen a “phenomenal return” on their investment, Frank says. It is all about the development of leaders. “That has come in the careers of people who have come into the group at an entry level and developed into senior managers with great skill and ability.”

“That’s the payback – having great people, and that differentiates you from everyone else in the market,” he adds.

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