CASE STUDY: Deloitte University: A Career-Long Investment in Leadership Excellence

Deloitte University: A Career-Long Investment in Leadership Excellence

By Diana O’Brien, principal, Deloitte Consulting LLP & Deloitte University managing principal and Bill Pelster, managing principal, Talent Development, Deloitte LLP

The Learning Imperative

Deloitte’s most tangible product is the skills of its more than 54,000 people across four disciplines – tax, audit, financial advisory and consulting. Clients increasingly call on Deloitte professionals not only to provide a high level of service in their own specific discipline, but also to advise across the spectrum of business needs and issues. This makes it vital that Deloitte professionals be continuous learners across the full range of technical, industry, professional, and leadership capabilities in order to stay on the leading edge.

Beyond the need to continue to provide top notch client service, Deloitte sees its commitment to talent development as fundamental to the organization’s long-term competitive advantage. In an uncertain economy, it is critical that Deloitte attracts and hires the right people. And the need is more urgent than ever. According to the Employment Policy Foundation, by 2025 there is expected to be a 35 million person gap between the supply and demand of knowledge workers in the U.S. economy.

Deloitte’s solution to closing this gap and developing the leaders of tomorrow? Deloitte University – a $300 million investment to build a brick-and-mortar facility with the mission to enhance leadership as a core competency at all levels, inside and outside the walls of Deloitte, and to inspire new thinking that helps clients face off against their challenges.

The Vision for Leadership Excellence

The doors of Deloitte University opened in 2011, but the vision was born in 2005, under the leadership of then-U.S. CEO Barry Salzberg, who currently serves as the global CEO of Deloitte Touche Tohmatsu Limited. At the time, a number of shifts were taking place both inside and outside of the organization.

For one, Deloitte’s workforce demographics were changing significantly. In 2005 Deloitte’s population was approximately 43,000 employees – with continued growth, it has since reached over 54,000 employees with many of them coming to the company directly upon graduating from undergrad institutions. More than 60 percent are under the age of 35. In addition, clients were adjusting to an increasingly globalized economy with a constant stream of new and emerging technologies, including mobile devices and social media platforms, which were changing the way business is done.

These were trends that Deloitte saw coming – and the leadership team knew that Generation Y had very specific values and expectations for their career development. For these reasons, Deloitte’s talent and learning teams began orchestrating a wholly new approach to attracting top talent, cultivating leadership from within, and keeping up with the changing business landscape to provide better solutions for clients’ most complex business needs.

To do this, Deloitte first undertook a survey of its workforce. What they found was surprising –six focus groups and over 900 survey responses from Gen Y learners revealed that not only was a commitment to learning and development important to recruiting this demographic, but that live off-site learning is considered “critical” for them as well. Most of Deloitte’s professionals work on-site at client businesses around the nation, working virtually with other team members. A physical facility would provide greater opportunity for face-to-face networking with peers, and more importantly, senior leaders.

After evaluating internal interests, Deloitte leaders then looked at the  kinds of knowledge and skills Deloitte’s well-rounded professionals would need to excel, and found that overwhelmingly, many skills required real-world simulations that couldn’t be maximized through virtual teams. For example, while updates to the tax code and certain regulatory training, such as workplace skills, can be achieved through virtual learning, complex and advanced-level skills require more collaborative, simulated scenarios that only a physical facility could provide.

There was another reason a physical facility appealed to Deloitte – the opportunity to design a place that reflected and reinforced the organization’s values and brand. As a strategic step in building the professional services organization of the future, it would further distinguish Deloitte’s brand in the marketplace for attracting and developing top talent and enabling that talent to address clients’ most complex business challenges.

Making the Case

To make this vision a reality, Salzberg had to get the approval of Deloitte’s almost 3,000 partners and principals. To a large degree, the question came down to cost. A $300 million investment in a physical facility when virtual options were much cheaper would require a strong business case –  and partners had many questions, from what the facility would look like, how many there would be and how it would differ from the current learning model.

Salzberg knew he had to get specific. His team visited similar institutions to learn best practices and understand the challenges ahead. Originally, the decision to build this facility was purely about ROI around the external venue spend that was generated by our learning programs – The team felt that they could build a facility and deliver training at a lower cost point than constantly contracting for external venues. However, over time, that original vision morphed into the idea that Deloitte University could and should be the heart of our corporate culture. Salzberg and his team realized that the opportunity they had in front of them was to combine the ideas of corporate culture with the opportunity to create business leaders at all levels of the organization.  That is how Deloitte University ended up being branded the Leadership Center.

Salzberg’s team envisioned a multi-acre site that would have accommodations on the ground, along with amenities and restaurants, which would bring together team members from all of Deloitte’s disciplines, levels, and U.S. regions in simulated real-world business scenarios as a means to increase collaboration and teamwork.

The next step was to choose a location. Multiple sites were scouted before deciding on Westlake, Texas, a neighboring town of Dallas. Centrally located between the two coasts, Westlake is not only accessible, but also provides a temperate climate; a perfect combination for a year-round learning hub.

To ensure Deloitte University would be a new kind of learning that reflected the range of services and expertise offered by Deloitte professionals, the organization’s leadership proposed a governance structure with representatives from each of Deloitte’s core practices and direct lines of communication to the learning officers from each team.

After in-depth discussions, the Deloitte partnership was fully on board and committed to the project, from the Board of Directors on down.

Construction began on the 107-acre plot of land in 2009. In keeping with Deloitte’s commitment to environmental sustainability and managing long-term costs, both energy and water efficiencies were top of mind during the facility’s construction. For example, approximately 50 percent of construction waste was recycled, and 90 percent of the architectural space has views of natural light, reducing the use of interior lighting.

The official opening ceremony was held in October 2011. Today, Deloitte University boasts 800 guest rooms at 300 square feet each, 35 classrooms, 36 team rooms, a 12,000 square-foot fitness center, a two-mile running/walking trail, an amphitheater that seats 176 people, a grand ballroom, full-service dining halls and a social venue called The Barn.

A New Kind of Learning

Deloitte’s leadership knew that building Deloitte University was only half the process. To maximize its potential, the firm needed to adopt an entirely new approach to talent development.

At the same time the facility was being built, Deloitte leaders, including CEO Barry Salzberg and Chief Talent Officer Bill Pelster, worked to create a new kind of learning curriculum to be delivered at Deloitte University – a curriculum that was leading-edge, simulation-based, and collaborative. In June 2011, Deloitte leadership increased the amount of learning across Deloitte to four million hours, up from three million hours conducted the year prior. Those additional one million hours now occur at Deloitte University.

Deloitte has always invested heavily in technical and professional training, but Deloitte University has increased its capabilities to provide industry and leadership training. Most of the programs offered at Deloitte University are complex, multi-day simulations built around small team interactions with a 1 to 5 facilitator- to- student ratio. 

The formal, traditional lecture would have no place inside a Deloitte University classroom. Deloitte University classrooms have no “front” and there’s usually not a podium in sight. Instead they employ modular furniture arranged in a number of configurations to facilitate dialogue and role-playing. Four classrooms are specifically designed as “TeleClassrooms” and are linked to other similar rooms, newly constructed, in all major offices across the country, enabling teams to come together across distances to solve problems and learn together. This network of TeleClassrooms reaches 90 percent of learners across the Deloitte U.S. organization.

Learning programs are designed to replicate the real-life situation as closely as possible. For example, while learners engage in competitive team-based business simulations, facilitators will throw them the kind of curveballs they might expect on a real project – for instance, mid-way through an exercise, a learner might receive an email with information that completely changes the scenario, teaching them to make quick decisions. Faculty members also act as ‘cast members’ and engage in one-on-one simulated conversations to give learners practice handling difficult conversations. By challenging learners in a safe environment, partners, principals, and directors can guide learners to new skills that apply to their day-to-day situations with clients.

Ninety percent of the courses are taught by senior Deloitte professionals—the very people who live Deloitte values and serve its clients each day. In other cases, outside instructors are brought in from a pool of facilitators, including retired Deloitte partners, principals and directors, leading industry pundits, clients CEOs, and other external experts.

In its first three months of operation, DU delivered 154 programs to 8602 learners who completed 219,320 learning hours.  By the end of its first year, it is expected that more than 30,000 learners across all levels of Deloitte will attend DU. Deloitte professionals can expect to visit the center an average of every 2-3 years. 

But even when not in Westlake, personnel will benefit from the enriched culture and collaboration that Deloitte University has catalyzed across the organization. Deloitte University is designed to allow people to network across their normal organizational boundaries.  Additionally, key promotion milestone training is cross-functional, allowing team members to work on complex problems that span traditional organizational boundaries.  For example, there are simulations that allow tax, consulting and advisory professionals to work together. In the past year, nearly 4,000 promotes at Deloitte attended cross-functional training at DU and other Deloitte learning venues. This team-building and networking will strengthen the collaboration of team members working together from different sites to solve complex client issues.

The Return on Learning

Leaders understood early on that Deloitte University would not be a cost-saving measure. For one, an increase in live learning means a natural increase in travel. Instead, the $300 million investment will be evaluated in terms of whether Deloitte has successfully moved the bar on learning and better prepared its professionals to serve clients with distinction. Rigorous models are in place to evaluate results of the learning across multiple dimensions—focusing on curriculum, faculty quality, and, of course, business outcomes.  

To track outcomes, Deloitte has instituted a number of measurement strategies, including surveys, focus groups, interviews with learners, and social media forums to help ensure professionals are satisfied with their learning, and more importantly, are applying the skills they’ve gained on the job. Deloitte conducts learning assessments on key programs and has seen a significant jump in responses around how and when what individuals have learned at Deloitte University is being applied back on the job. Depending on the assessment model, there is a follow-up survey on select programs 90 days post-training, which will go to either the individual or their respective manager. 

With the official opening in October 2011, the testimonials from feedback surveys thus far are entirely positive, with the focus areas of leadership development, culture, networking/social events and overall experience all rated as “excellent.” The most recent feedback survey conducted found an average rating of 4.8 out of 5 on the overall experience. In addition to this, in one of the recent focus groups conducted participants said that after attending Deloitte University they now have a more positive perception of Deloitte due to the firm’s investment in its people and learning.

Overall, the investment in the facility and the 25 percent increase in annual training have allowed Deloitte to differentiate itself in the market for talent. The Kirkpatrick level one analysis has jumped from an average of 4.2 to 4.8. Additionally, Deloitte University’s strategy is directly linked to Deloitte’s business strategy to create the world class business leaders. This summer, for the first time, it will roll out Industry mastery level programs for all 20 of our industry sectors. This will significantly increase the core skills of all of Deloitte professionals.

But the true measure of Deloitte University’s success is still a few years from being fully realized. By 2015, the leadership should be able to see what the investment looks like in leadership capabilities across the organization, with the expectation that Deloitte University will have already begun to develop a succession of strong leaders.

Beyond Deloitte

Ultimately, the mission of Deloitte University is to enhance the skills and competencies of all Deloitte employees in order to prepare them to be world-class leaders, no matter if they finish their careers at Deloitte, or eventually join other organizations. The experiences and skills they gain at the Leadership Center will contribute to the kind of professionals they become and the decisions they make, which has the potential to impact the future of business practices.

But in the short-term, as long as clients and stakeholders, such as regulators, can see the impact in their own business and the way Deloitte conducts business, Deloitte University will be considered a great success.