Jeanne Meister is president of Corporate University Xchange, Inc., a research and consulting firm that launches corporate universities within Fortune 1000 companies as well as small and medium-sized companies. Corporate University Exchange conducts advanced research on the relationship between business strategy and learning and is a prominent authority on that topic.

James L. Morrison (JLM): Jeanne, what is a corporate university?

Jeanne Meister (JM): As we think of it, a corporate university is a portal within a company through which all education takes place. It is an organization's strategic hub for educating employees, customers, and suppliers. Corporate universities link an organization's strategies to the learning goals of its audiences.

JLM: How does a corporate university differ from a corporate training department?

JM: Training departments tend to be reactionary, fragmented, and decentralized, designed to serve a wide audience with an array of open enrollment programs. A corporate university, on the other hand, pulls together all learning in an organization by managing education as a business project. It has one head—either a dean or a chief learning officer—and clear goals, objectives, and long-term strategic plans. It works with both outside universities and training vendors to get the best deals (i.e., contracts on design and/or delivery of training services and other learning programs) on behalf of all of the employees in the organization. A corporate university also shapes corporate culture by fostering leadership, creative thinking, and problem-solving.

A corporate university provides strategically relevant learning solutions for each job family within a corporation. Strategic is the key word here. A strategic learning organization functions as the umbrella for a company’s total education requirements—for all employees and the entire value chain, including customers and suppliers. In a corporate university, employees build individual and organizational competencies, thereby improving the company's overall performance.

JLM: Do corporate universities give degrees?

JM: In many cases, they award joint degrees with traditional universities. They are not themselves accredited. For example, the Bank of Montreal offers an MBA degree through a joint program with Dalhousie University. Bell Atlantic Learning Center also offers joint degrees with a consortium of 23 universities in New England. Corporate universities do not want their primary function to be granting degrees; they want to partner with universities to provide customized programs for major job families, usually within their organizations. These customized programs may lead to new degrees based on the training needs of the corporation.

The corporate university concept, as we see it and "preach" it, is not intended to replace the rigor of a traditional education. Obviously a traditional university can do certain things that a corporate university can never hope to achieve, even in the increasingly market-driven arena of business education. For example, traditional universities foster a broad, integrated frame of reference that draws from a wide, multidisciplinary spectrum; corporate universities, unlike regular universities, are not appropriate for—or even capable of—developing the so-called "Renaissance man" (or person). But a corporate university can be the ideal means for companies to provide employees with practical business knowledge, managerial competence, and task-oriented education, all designed to make an organization more competitive.

JLM: Could you give us some idea of the breadth and scope and future of corporate universities?

JM: Our database lists more than 1,600 organizations titled "corporate universities," "corporate colleges," or "institutes for learning." We expect this number to rise to more than 2,000 in the next few years. We believe that by the year 2010 or so, corporate universities will outnumber traditional universities. As you may be aware, traditional universities are closing at the same time that corporate universities are growing. In the past 13 years, more than 100 universities have closed their doors; we believe that there is a huge market opportunity for other universities—and not just those in danger of closing—to partner with corporations.

JLM: How could a corporate university partner with a traditional university?

JM: In some cases, a traditional university can simply offer programs on the site of the corporate university. About half of the 1,600 corporations in our database have physical campuses for their corporate universities. They want to bring university programs within their walls, just as they have brought banks, ATMs, and even laundry services on the premises so that their employees never have to leave. These corporate universities want not only courses, but also student services, registration offices, libraries, and bookstore facilities inside the corporate walls. Some even want to partner with traditional universities to create whole new degree programs. For example, American Express and Rio Salado Community College have joined to create an associate’s degree in customer service. I see opportunities to start small and build in many directions.

JLM: What are the forces driving the development of corporate universities?

JM: One force is the obsolescence of knowledge. Jobs now require rapidly changing skill sets, so corporations are realizing that even a Phi Beta Kappa graduate needs a lot of training after being hired. Corporations often want new degree programs or curricula for engineers or manufacturing people, and they become frustrated when universities cannot create these programs quickly. They have begun to take these matters into their own hands by partnering with universities, training vendors, or even publishers, who are becoming more directly involved with education.

JLM: At a recent conference, I heard you use the expression "Dell or be Delled." You said that this phrase is a wake-up call for American higher education. What did you mean?

JM: I was referring to a recent article on that topic that appeared in the Wall Street Journal last year. Dell has been enormously successful in bypassing retailers and going directly to consumers with their product, providing excellent customer service. I think the same thing is true for higher education. Companies are going to bypass universities that don’t provide what they want, and they are going to go directly to publishers for training materials. This has already started with Harcourt University and Dow Jones University. So higher education has the potential of being "Delled" when corporations go directly to the source of the content that they want taught.

JLM: So corporations will become competitors with traditional universities?

JM: Yes. Some corporations are spending a lot of money on higher education. Among the organizations we work with, the average budget for the corporate university is $20 million. In some organizations, this budget reaches $600 million. What is the budget of a four-year land-grant university?

JLM: What is the funding model of the corporate university?

JM: The funding model of the corporate university is changing. It used to be that corporations would write a check and say, "Here’s the money for the training program." Now, funding training is so expensive that, rather than writing a $10 million check, companies expect corporate universities to be nearly self-funded or even to provide revenue for the parent organization. Corporations now want to set up training programs like a traditional university and charge tuition to their internal business clients. Those clients might be the heads of sales or the heads of manufacturing within the companies. But companies also want to take the materials that they have copyrighted and market them to the customers and suppliers in their networks. They can make money licensing those materials to outsiders for a fee. So the funding model is changing from a cost-center to a fee-for-services, self-funded model.

JLM: And by implication, when a corporate university develops specific content dealing with services, finance, engineering, or human relations, it could then market that content even beyond its own suppliers?

JM: Yes. If a company spends $10 million on education, that same company may be spending $200 million on advertising in order to build its brand in the marketplace. So companies want to leverage their strong brand positioning and sell education.

JLM: Many traditional colleges and universities are developing online learning and online courses. Are corporate universities doing the same thing?

JM: Definitely. Our survey of 120 corporate universities reveals that, in the next three years, almost 60% of their coursework will be delivered through the corporate intranet. Employees will register and take modules online and alert their managers to these activities. Both groups can thereby assess skills, compare skills with those required for a given position, and then choose materials to help close any gaps. The corporate intranet will provide training via courseware, videos, and/or audiotapes.

JLM: Thank you, Jeanne, for giving us your perspective of corporate education and the implications of this phenomenon for higher education.

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