The Value of The Value of Partnerships: Partnerships: Corporations and Corporations and Higher EducationHigher Education

Is there a middle ground for strategic partnerships?Is there a middle ground for strategic partnerships?

Karen Vignare, Sr. Research Karen Vignare, Sr. Research

Analyst, Rochester Institute of Technology, Analyst, Rochester Institute of Technology, kxvrpt@rit.edukxvrpt@rit.edu

(original paper, co-published with Chris Geith)(original paper, co-published with Chris Geith)

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OverviewOverview

Defining strategic partnershipsDefining strategic partnerships Training and Education Trends Training and Education Trends Focus on Corporate ReturnsFocus on Corporate Returns Three levels of partnershipThree levels of partnership

– AccessAccess– CustomizationCustomization– Organizational performanceOrganizational performance

Challenges for Level IIIChallenges for Level III

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Past Partnership ValuePast Partnership Value

Historical context: teaching and learning Historical context: teaching and learning not a skill of corporationsnot a skill of corporations

Corporations validate higher education Corporations validate higher education through employmentthrough employment

Higher Education able to charge premium Higher Education able to charge premium pricing to corporations for servicespricing to corporations for services

Pervasive and deep relationships still existPervasive and deep relationships still exist

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PartnershipPartnership

Strategic partnerships are recognized as Strategic partnerships are recognized as ones that will last beyond a saleones that will last beyond a sale

Require customizationRequire customization Require performance standards on both Require performance standards on both

sidessides Recognize value from partnership not just Recognize value from partnership not just

as a transactionas a transaction

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Changing Values of Changing Values of Partnerships?Partnerships?

More companies investing in learning More companies investing in learning infrastructureinfrastructure

Questioning lack of change at higher Questioning lack of change at higher educationeducation

Corporations questions current economic Corporations questions current economic value of higher ed gradsvalue of higher ed grads

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Corporations & Higher Corporations & Higher Education Partnership Facts Education Partnership Facts

Spend $56.8 billion on Spend $56.8 billion on education & trainingeducation & training

Estimated 1600 corporate Estimated 1600 corporate universitiesuniversities

Utilization of higher Utilization of higher education dropping education dropping especially for two-year especially for two-year requirementsrequirements

Sources: Sources:

Training Magazine 1, Corporate Training Magazine 1, Corporate University Exchange 2, ASTD 3.University Exchange 2, ASTD 3.

74% have jointly developed 74% have jointly developed programsprograms

85% have non-credit courses 85% have non-credit courses for corporationsfor corporations

77% offer credit courses for 77% offer credit courses for employeesemployees

Source: Source:

NASULGCNASULGC

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Signs of ChangeSigns of Change

Knowledge economy requires a constantly Knowledge economy requires a constantly re-educated employeere-educated employee

Technology infrastructure and environment Technology infrastructure and environment ripe for providing unlimited access and ripe for providing unlimited access and immediate awarenessimmediate awareness

ROI of organized and integrated corporate ROI of organized and integrated corporate education/training must show positive education/training must show positive returnreturn

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E-learning in Higher E-learning in Higher EducationEducation

50%-80% offer internet based courses 50%-80% offer internet based courses Less than 5% of faculty teach onlineLess than 5% of faculty teach online Stats close to 2.5 million enrollments by 2000: Stats close to 2.5 million enrollments by 2000:

1997 official stat was 1.4 million enrollments in 1997 official stat was 1.4 million enrollments in credit coursescredit courses

Close to 2 million students taking courses, out Close to 2 million students taking courses, out of 15 millionof 15 million

Sources: Sources: Businessweek 1, 3a, 4a; Primary Data, 1; NCES 2, 3b, U.S. Dept. of Education 4b.Businessweek 1, 3a, 4a; Primary Data, 1; NCES 2, 3b, U.S. Dept. of Education 4b.

Adapted From: Bloom, B.S. The Two-Sigma Problem: The Search for Methods of Group Instruction as Effective as One-to-One Tutoring. Educational Researcher. 13,4-16 (1984)

# S

tud

ents

Learning Improvements

2

1

ClassroomStudents

ClassroomStudents

CurrentTechnology

CurrentTechnology

Next-Generation Technology

Next-Generation Technology

Average tutored student’s achievement is better than 98% of classroom students

The Learning Technology PotentialThe Learning Technology Potential

Source: ADL Co-Lab Presentation, 2001Source: ADL Co-Lab Presentation, 2001

0.390.50

0.84

1.05

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Computer-BasedInstruction

(233 Studies)

InteractiveMultimediaInstruction(47 Studies)

"Intelligent"Tutoring Systems

(11 Studies)

Recent IntelligentTutoring Systems

(5 Studies)

*Measured in Standard Deviations*Measured in Standard Deviations

Improvement due to Technology-Based Instruction*

Source: ADL Co-Lab Presentation, 2001Source: ADL Co-Lab Presentation, 2001

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E-Learning Corporate E-Learning Corporate MarketplaceMarketplace

Estimates 2000: $1.4 to $2.3 billion spending Estimates 2000: $1.4 to $2.3 billion spending 2005: $4 , $11, $18 (growth 10% to 50%)2005: $4 , $11, $18 (growth 10% to 50%) Content leaders: IT skills & certifications & soft Content leaders: IT skills & certifications & soft

skills for businessskills for business Software vendors: LCMS & CoursewareSoftware vendors: LCMS & Courseware Infrastructure companies: Cisco, IBM and othersInfrastructure companies: Cisco, IBM and others

Source: Training Magazine 1, 3-5; Multiple Sources 2.Source: Training Magazine 1, 3-5; Multiple Sources 2.

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How Widespread is How Widespread is Corporate E-Learning?Corporate E-Learning?

Number of employees using e-learningNumber of employees using e-learning– 55% say between 0 – 25%55% say between 0 – 25%– 33% say between 25% - 50%33% say between 25% - 50%– 12% say between 50% to 100%12% say between 50% to 100%

20 million Americans say they are enrolled in 20 million Americans say they are enrolled in elearningelearning

Training dollars devoted to elearning: Training dollars devoted to elearning: averages range 10% to 15%averages range 10% to 15%

Source: Online Learning MagazineSource: Online Learning Magazine

Percent of Training Dollars Percent of Training Dollars Spent on E-learningSpent on E-learning

01020304050607080

0 - 25% 25 - 50% 50 - 75% 75 - 100%

Source: Monash survey, 2001Source: Monash survey, 2001

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So Where are We Today?So Where are We Today?

Level I:Level I: Access to Courses and ProgramsAccess to Courses and Programs

Level II:Level II: Custom Business SolutionsCustom Business Solutions

Level III:Level III: Strategic Alliances for Organizational Strategic Alliances for Organizational

PerformancePerformance

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Level I:Level I: Access Access

Not a true partnershipNot a true partnership Vendor supplier relationship existsVendor supplier relationship exists Volume discounting may existVolume discounting may exist Corporation validates learning through Corporation validates learning through

rewardsrewards Learning is generally self-initiated by Learning is generally self-initiated by

employeeemployee

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Level I:Level I: Access Access

Employees encouraged to take college Employees encouraged to take college coursescourses

Second only to conference attendanceSecond only to conference attendance Accessing higher ed through: Accessing higher ed through:

– courses, degree programs, post courses, degree programs, post baccalaureate certificates and industry baccalaureate certificates and industry certifications certifications

– corporate contract pricing, on-site and corporate contract pricing, on-site and online delivery, and special scheduling online delivery, and special scheduling

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Doors are OpenDoors are Open

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Level I:Level I: Access Access

Corporations pay in full (maybe at Corporations pay in full (maybe at discounted rate but require no financial aid)discounted rate but require no financial aid)

Employees are retained for longer periods Employees are retained for longer periods of timeof time

Employees benefit economically after Employees benefit economically after completingcompleting

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Individual Individual Gain from Gain from EducationEducation

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Level II:Level II: Custom Business Custom Business SolutionsSolutions

Designed to tackle unique business problemsDesigned to tackle unique business problems Requires agreed upon outcomesRequires agreed upon outcomes Colleges need to use jargon of business for Colleges need to use jargon of business for

contractscontracts Requires customization (mass customization Requires customization (mass customization

concept) from collegesconcept) from colleges

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Communication of Communication of OutcomesOutcomes

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Level II:Level II: Custom Business Custom Business SolutionsSolutions

Customized MBA programs most popularCustomized MBA programs most popular– Motivate teams, cohorts and leadersMotivate teams, cohorts and leaders

Partnership examples: Partnership examples: – Babson & IntelBabson & Intel– RPI, Tec de Monterrey & GMRPI, Tec de Monterrey & GM– RIT & Xerox, Ford, Bausch & LombRIT & Xerox, Ford, Bausch & Lomb

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Level II:Level II: Custom Business Custom Business SolutionsSolutions

Colleges charge higher rates for these Colleges charge higher rates for these programsprograms

Require more work—faculty need to Require more work—faculty need to customize experience customize experience

Corporations look for ways to measure Corporations look for ways to measure impactimpact– Kirkpatrick and PhillipsKirkpatrick and Phillips

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Level II:Level II: Custom Business Custom Business SolutionsSolutions

Kirkpatrick’s Level 4 Evaluation ModelKirkpatrick’s Level 4 Evaluation Model– Level 1--Overall SatisfactionLevel 1--Overall Satisfaction– Level 2--Course GradesLevel 2--Course Grades– Level 3--Application of knowledge to Level 3--Application of knowledge to

BusinessBusiness– Level 4—Impact on businessLevel 4—Impact on business

Phillip’s Level 5 Return-On-Investment Phillip’s Level 5 Return-On-Investment ModelModel

Source: Grace Figuera, Banner Health Care, April 2002

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27

UnivUniv

NameName

CostCost

TuitionTuition

Cr.hrCr.hr

Flex Flex

SchedSched

AccredAccred..

Vol.Vol.

DiscDisc

On-siteOn-site

InstructInstruct

Dist EdDist Ed

OfferedOffered

Cohort Cohort numbernumber

Per Per prgmprgm

A A UnivUniv

B B UnivUniv

C C UnivUniv

D. D. UnivUniv

Banner Health Care Higher Education Proposal Matrix

Source: Grace Figuera, Banner Health Care, April 2002

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28

Banner Health Care Results:Banner Health Care Results:

Level 3 Application of knowledge using behavior Level 3 Application of knowledge using behavior change on the jobchange on the job

Indicator to be measured by testimonials and periodic Indicator to be measured by testimonials and periodic surveys to managers and participants; andsurveys to managers and participants; and

Data collected to determine degree of job applicability to Data collected to determine degree of job applicability to compare promotions and job performancecompare promotions and job performance

Level 4 Impact on businessLevel 4 Impact on business– Measured through retention and recruitment costsMeasured through retention and recruitment costs

Attrition for the program is 13%. Retention is 87%;Attrition for the program is 13%. Retention is 87%; Costs avoided over $1.5millionCosts avoided over $1.5million

Grace Figuera, Banner Health Care, April 2002

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Phillip’s Evaluation ModelPhillip’s Evaluation Model

Level 5 Return-On-InvestmentLevel 5 Return-On-Investment– Compares the financial value of the benefit Compares the financial value of the benefit

received with the financial value of the received with the financial value of the investment incurred.investment incurred.

Current ROI is est. at 290% (divide benefits/cost Current ROI is est. at 290% (divide benefits/cost avoided by costs incurred. avoided by costs incurred.

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Corporate Corporate Needs/ExpectationsNeeds/Expectations

““We are seeing a shift from Tuition Assistance We are seeing a shift from Tuition Assistance Programs as an employee benefit to a strategic Programs as an employee benefit to a strategic investment in a limited number of high potential investment in a limited number of high potential candidates” candidates”

Manager, University Programs Group, Manager, University Programs Group,

Fortune 500 CorporationFortune 500 Corporation

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Level III:Level III: Strategic Alliances for Strategic Alliances for Organizational PerformanceOrganizational Performance

Corporations want strategic returnsCorporations want strategic returns Corporations want individual competency Corporations want individual competency

and performanceand performance Vendors show clear gains in certification Vendors show clear gains in certification

market market Higher Education wants student Higher Education wants student

placements, revenue, engagementplacements, revenue, engagement

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Infrastructure systems can tie content, Infrastructure systems can tie content, individual performance, and business individual performance, and business requirementsrequirements

Few companies at this stageFew companies at this stage Few universities recognize how to create Few universities recognize how to create

content for this level of individualizationcontent for this level of individualization Corporations expect lower costsCorporations expect lower costs

Level III:Level III: Strategic Alliances for Strategic Alliances for Organizational PerformanceOrganizational Performance

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Level III:Level III: Corporate Challenges Corporate Challenges

Training function not mainstreamTraining function not mainstream Cost of Infrastructure—systems, people, Cost of Infrastructure—systems, people,

content (and redoing work)content (and redoing work) Lack of learner-centric designLack of learner-centric design Lack of problem definition Lack of problem definition

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Where Corporations Need Where Corporations Need HelpHelp

A “Dean Function” to guide corporate learning A “Dean Function” to guide corporate learning Coherent, strategically aligned CurriculaCoherent, strategically aligned Curricula Learning/Training ROILearning/Training ROI Tie from Business/Strategy needs of the business Tie from Business/Strategy needs of the business

to identification of highest value Trainingto identification of highest value TrainingJeremy SeligmanJeremy Seligman

Manager, IT Competency and LearningManager, IT Competency and LearningFord Motor CompanyFord Motor Company

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Level III:Level III: University Challenges University Challenges

Lack of faculty endorsementLack of faculty endorsement Economic model is craft basedEconomic model is craft based Lack of StandardsLack of Standards Regulatory issuesRegulatory issues Lack of learner-centric designLack of learner-centric design

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Level III:Level III: 4 Steps for Universities 4 Steps for Universities

Get up to speed on standards—SCORMGet up to speed on standards—SCORM Tie learning to business outcomesTie learning to business outcomes Recognize regulatory issues—Department of Recognize regulatory issues—Department of

EducationEducation Support individualization in learning and Support individualization in learning and

servicesservices

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What’s at StakeWhat’s at Stake

Corporations questioning value of higher Corporations questioning value of higher education after employmenteducation after employment

Missed opportunities to improve learningMissed opportunities to improve learning World wide education needsWorld wide education needs Opportunity for for-profit universities Opportunity for for-profit universities

willing to invest in Level III systemswilling to invest in Level III systems

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