IBM gets its arms around education. (includes related article on how IBM uses technology to reduce cost of education)

IBM Gets Its Arms Around Education

In 1984, IBM decided it needed to get its arms around education. That embrace fell to Jack Bowsher, director of education for external programs, whose two-year study revealed that IBM was spending $900 million a year on education without an overall management system. That discovery led to a major restructuring of education, tied training directly to jobs, and streamlined delivery with big doses of instructional design and advanced technology.

Education at IBM is on the move. It has jumped to the top of the company, joining other key business functions, such as manufacturing and finance, that report directly to the top-ranking management committee. It is also heading rapidly out of the classroom into the world of advanced technology.

Those two changes--a central role for education at a high corporate level and more technology for delivering it--are good predictors of what could happen in other large companies interested in getting high quality from their big-ticket training expenses.

Ursula Fairbairn, who holds the top corporate education job at IBM, says, "We restructured education for three reasons: to ensure the company's growth, to improve the quality of education, and to contain costs."

The importance of education to IBM shows up clearly in some simple numbers. On any given day, 18,000 of its 390,000 employees take part in some kind of formal education event--in a classroom, through self-study, or via computer-based training. IBMers around the world complete a staggering 5 million student days per year, giving each one an average of about 12 days. The yearly education budget of $900 million includes the costs of the people, equipment, and facilities needed to deliver the training but does not include the salaries of the people being trained.

Why so much education?

IBM uses education for five major reasons: growth, change, customer productivity, employee productivity, and human resource management.

"Almost any program brought to the management committee could contain an education component, especially if it involves growth or change," explains Fairbairn. "We believe that if IBM is going to succeed, our people have to know more and be able to do more than the competition, and so we educate them accordingly.

"We also use education to support IBM's full employment practice. When people are freed up, perhaps by technology or by a reorganization, we train them for other jobs instead of laying them off. Retraining and redeployment are a way of life for us."

The route to restructuring

In 1983, following the publication of A Nation at Risk, the report that challenged U.S. education to improve, many IBM executives were asked to serve on government task forces on education. The retired CEO was a member of one of those groups, the Hunt Commission. Looking closely at public education sparked his curiosity about education inside IBM.

A retired vice president was asked to look at internal education and make some recommendations. The first was that there …