Caterpillar: Building Best Practices in E-Learning

Caterpillar Inc. is a Fortune 100 company with 67,000 employees working in nearly 250 facilities around the globe. A technology leader and the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial

Caterpillar is led by Chairman and CEO Glen Barton, who oversees five group presidents. These group presidents in turn supervise 25 vice presidents who are focused around facilities, geographical regions, marketing regions and four service centers. The company moved toward this decentralized structure in the early 1990s to get closer to customers and become more responsive to their needs. The company was divided into various business units that were very specific in focus, thereby helping the organization grow and evolve. While this development was positive for the company, the business units became increasingly autonomous, going their own way in terms of defining standards for leadership, performance management and the like. As a result, Caterpillar suffered a loss of consistency and efficiency across the organization. It was in this environment that Caterpillar’s in-house learning and development entity, Caterpillar University, was born in 2001.

“Caterpillar University was conceived as a global center of expertise, responsible for identifying and meeting common learning needs,” said Caterpillar University President David Vance. “The University is dedicated to the ‘business of learning.’ Its mission is threefold: to improve performance, to help the company be successful and to encourage a renewal of the organizational synergy that was lost during decentralization.” The aim of Caterpillar University, continued Vance, is to address these issues and make sure that the company is getting maximum return on its learning dollars.

In executing its mission, Caterpillar University relies heavily on e-learning offerings, including many from Harvard Business School Publishing. Charged with addressing a wide range of issues—Six Sigma, change management, performance management, assembly training, ergonomics, safety, engineering, accounting, marketing and leadership—the University frequently finds e-learning is the training method of choice, for a variety of reasons:

  • The efficiency and effectiveness of the medium is very appealing: “E-learning allows for self-paced learning. Users can repeat exercises if needed, return to review specific topics and cover content in a time frame that is comfortable for them,” noted Vance.
  • E-learning is more cost-effective than traditional classroom-based learning.
  • Caterpillar has a number of global initiatives that it must roll out, and training via e-learning makes that practical and consistent. It’s much easier to offer employees courses electronically, through their own computers, than to force them to travel from around the world to a classroom. And with e-learning, the company is assured that employees are receiving the same content and instruction.

E-learning is also very valuable in that it allows the University to provide a customized learning experience. Employees can test out of or skip modules covering materials they’ve already mastered, proceed through a course at their own pace and do their learning whenever and wherever it’s most convenient—many times in their own homes.

Yet efficiency and flexibility are only part of the equation. Vance is also concerned with implementation: Are people able to launch a given program easily on the learning management system (LMS) platform? Does that program run without bugs? Is it robust? Then, as people begin to use the program, do they find it engaging and easy to navigate? “In our eyes,” said Vance, “a successful implementation is one that, when we’re done, results in the user saying, ‘The program was engaging and easy to use, I learned a lot, and I know how I’m going to change my behavior on the job as a result of my learning.’ Our goal is to make people more effective in their work.” He added, “It isn’t enough that an employee feels good about e-learning or views its availability as a sign that the company cares about him or her enough to invest in learning opportunities. The learning has got to be something that makes a difference to our workforce and helps to improve corporate performance.”

The content for Caterpillar University is dictated by the colleges, which gather input from advisory boards and learning managers in the business units. Additionally, there are corporate initiatives that require educational support, legal requirements that demand learning, etc. Caterpillar University launched its learning initiatives with an e-learning library of soft-skill courses that employees could use. As the University has grown, the colleges have begun to formulate specific learning requirements and select their own programs from the e-learning vendors that best meet their needs. For example, Caterpillar’s College of Leadership chose Harvard Business School Publishing’s online reference tool, Harvard ManageMentor, and several of HBSP’s leadership and management development programs: “Coaching for Results,” “Influencing and Motivating Others,” “What Is a Leader?” and “Managing Direct Reports.” This selection was based on evaluation by a global team that determined that the content best supported the Caterpillar leadership competencies and Caterpillar’s global strategies by offering the products 24 hours a day, around the world, in multiple languages. The programs also met the key requirement of compatibility with internal Caterpillar technology.

Moving forward, said Vance, the University will look to business-unit strategic learning plans to identify learning needs. These needs will be submitted to the colleges, which will then decide which needs may be met by e-learning, which require facilitated classroom learning and which require a blended approach.

There is still much work to be done by the University, Vance said. Many employees have yet to use e-learning—this year marks the first that e-learning has been a strategic focus within the company. As fate would have it, Vance explained, last year saw the company in severe cost-reduction mode, which fortuitously played into the strategy of focusing on e-learning. People didn’t have the budgets to travel or pay classroom fees, so e-learning became a more attractive alternative. Caterpillar University leveraged the situation by securing corporate funding that enabled it to offer e-learning to the business units at no additional cost, and as a result the company saw e-learning usage increase by more than 500 percent.

Over the past 18 months, Caterpillar University has utilized a number of Harvard Business School Publishing programs. Nearly 390 employees have used HBSP’s Leadership programs. Employees also have access to Harvard ManageMentor in English, Chinese, French, German, Japanese and Portuguese.

Response to the programs has been overwhelmingly positive. One user noted, “By using the ‘What is a Leader?’ I was able to re-affirm that I am thinking of my own skills properly. It was a very useful tool for getting feedback from what I am seeing in myself.” Another said, “I’m using this great Harvard tool to help facilitate teams.” And a third responded, “I’ve applied the key points to my coaching and development of subordinates. These classes will be one of the supplemental development courses used with our new supervisors.”

In addition to this specific course feedback, the University polled approximately 1,600 e-learning users on such questions as whether the programs met their expectations, whether they encountered any infrastructure issues, what they thought of the University’s graphic component, whether the programs were directly applicable in their jobs and whether they would recommend e-learning courses to other employees. “We’ve gotten a lot of very positive feedback,” said Vance. “For instance, 82 percent said that e-learning has helped them in their job, and 94 percent said that they would recommend e-learning.”

Finally, the University analyzed ROI for learning in 2002, which included e-learning, and found that, on average, the company saved $87 per person for every e-learning course taken. “We expect to have at least 40,000 lessons taken this year overall,” said Vance, “so we’re looking at significant corporate savings as a result of this initiative.”

As Caterpillar University continues to develop, the staff has grown increasingly smarter up front, noted Vance. “Initially we didn’t realize how many ways a problem could develop,” he said. Now the University puts its e-learning offerings through a rigorous testing process in order to anticipate to the greatest degree possible where the end-user might encounter problems. “The better the job the University does at anticipating problems and setting expectations for people’s encounters with e-learning,” said Vance, “the more positive the outcome for everyone, including the bottom-line impact for the enterprise.”

Looking down the road a bit, Vance happily concedes that there’s no shortage of opportunities for Caterpillar University to enhance e-learning throughout the organization. One of the staff’s most immediate goals is to increase usage dramatically in locations where it is currently lagging.

The University is also preparing to extend e-learning opportunities to its dealer employees, who number around 90,000. “These individuals are eager to take advantage of our e-learning offerings,” said Vance. “This gives us a tremendous opportunity to help them be more successful in their business, which in turn makes Caterpillar more successful.” The University plans to begin deploying to North American dealers later this year.

Yet another plan calls for the introduction of more streaming video, incorporated into a blended-learning offering. “E-learning has been a very exciting venture here at Caterpillar,” said Vance. “E-learning within the company is up significantly, and classroom learning is down significantly, so the change is happening.”

Jean-Francois (JF) Goldstyn is senior manager of implementation services at Harvard Business School Publishing. JF has helped more than 100 organizations with their e-learning efforts. E-mail JF at

January 2004 Table of Contents