Rethinking Corporate Universities

Thomas Sattelberger

Thomas Sattelberger has worked on the Boards of Directors of Lufthansa German Airlines and Continental AG since 1999 and from 2007 to 2012 Deutsche Telekom AG. He founded the Lufthansa School of Business as the first corporate university in the German-speaking world in 1997, and between 2005 and 2007 more than a dozen Continental AG universities in countries ranging from the Philippines to Romania. In 2010 he started Deutsche Telekom’s Telekom School of Transformation Project.

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Thomas Sattelberger argues that corporate universities must evolve from being socialisation and knowledge transfer machines to helping their parent companies undertake effective transformation.

Until 20 years ago the big companies of the old “Deutschland AG” dominated the image of Germany. Whether Daimler, Siemens, Dresdner Bank, Hoechst, BASF, Thyssen, BMW or Bosch, successful German companies had a long tradition of large research budgets, stable business models, long-term customer relationships and a reliable legal framework in which to operate.

They also had social mechanisms in place in order to assure the stability of their own culture. These were not just social agreements with “co-managing” unions but also ties of loyalty, even obedience, within their management teams.

The past two decades have called all this into question. Globalisation – not only in Germany but also in all so-called old economies – has led to a “re-measurement of the world”.

Industrial behemoths are dying faster than ever, swallowed up or languishing in bureaucracy. Digitisation has made value-creation processes intangible; innovations are increasingly dealt with through the backdoor; garage start-ups are growing into giants.

The large corporations of Deutschland AG, which carry with them the baggage of their history, have been travelling in dangerous waters. Compared to the many small speedboats and international giant liners they often look like Roman galleys.

Of the eight companies mentioned above, one has died, one survives only through state aid, two have had life-threatening crises and two have deteriorated significantly under global competition.

“Ambidexterity”: nurturing core business and innovation

Long-established large companies are usually characterised by different polarities: old and new businesses; established sales areas and emerging markets; efficiency programmes and innovation initiatives; centralised bureaucracy and peripheral dynamics of change; administrators and entrepreneurs; a dominant number culture and an experimental ethos.

This was popularised by Robert Duncan and James March as the concept of “organisational ambidexterity”. A company must be able to cope with two opposing issues equally well if it is to handle disruptive change.

To seize the opportunities of the present and systematically exploit the potential of the future demands two parallel organisational structures or mental maps, one for the full exploitation of the current business, the other for researching new business ideas.

For the full article, please read the PDF or listen to the Podcast and find out about: Signals and triggers of transformation; Corporate Universities 2,0; Laboratories for transformation; Corporate empathy and social responsiveness.

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