Caterpillar INC. (CAT), Essay Example

Caterpillar Inc. (CAT) is both “a large global manufacturer of heavy construction and mining equipment and a service provider to its products” as well as “a major financial services provider” (Turban et al., 2010, p. 295). It is also a champion of effective e-learning through its “synchronous online learning management system (LMS), and a knowledge network” (p. 295). And small wonder: with “over 100,000 employees and… 200 dealerships in 182 countries” CAT’s knowledge management needs are significant (p. 295).  A thriving company, CAT more than doubled in size “from 2003 to 2006”, and, with “new and improved products and services” on offer as well, soon found itself in need of an effective KMS to provide training and retraining to its employees (p. 295).

As Glynn (2008) explained, the company’s “global audience of more than 100,000 learners in 40 different countries requires a robust learning infrastructure,” an infrastructure based on “three major elements: governance, a learning technology infrastructure, and an alignment process” (p. 38). Firstly, Caterpillar’s governance structure is excellent: it allows the company to ensure “strategic connection with enterprise and division goals through a Board of Governors, the Engagement and Learning Council, advisory boards, and lead learning managers in each division” (p. 38). Clearly, Caterpillar takes knowledge management seriously: the governance is designed to make Caterpillar an effective knowledge-based, learning organization, one that is capable of using extant knowledge and assimilating new knowledge capably. The Board of Governors has a central role in all of this: the Board “provides direction and policies for the corporate learning function”, directing effective knowledge management from the top down (p. 38).

Of course, Caterpillar also needs to monitor how effectively employees and the organization as a whole are learning, and this is where the Engagement and Learning Council comes in: this body “provides input and direction for the corporate learning function and monitors results” (Glynn, 2008, p. 38). As Turban et al. (2010) explained, “Caterpillar created Caterpillar University (CAT U) to meet its training and learning needs” (p. 295). The college advisory boards “offer input and direction at the higher education level,” guiding and shaping this training and learning (Glynn, 2008, pp. 38, 40). Caterpillar University itself has “a strong role in fulfilling the organization’s business objectives” (p. 40). Finally, lead learning managers have an important role to play “at the business unit level”, where they provide “input and direction” for all learning and knowledge functions (p. 40). All of these groups work together, each offering “a specific function” toward the overall goal, namely, to make Caterpillar “a continual learning organization” (p. 40). As a result, Caterpillar’s learning is consistently aligned with the company’s enterprise goals: the learning has a purpose to perform, and it is oriented towards these goals (p. 40).

The Caterpillar University Board of Governors was established in 2002 to make policy and to oversee “the alignment of the corporation’s learning needs with the enterprise business strategy” (Glynn, 2008, p. 40). Every quarter, the board meets in order to “discuss enterprise-wide learning initiatives, such as leadership, safety, quality, performance management and the Caterpillar Production System” (p. 40). Clearly, effective governance and the maintenance of a strong learning technology infrastructure are inextricably linked, synthesized in the organizational performance of Caterpillar Inc. This is the foundation of effective knowledge management: the effective governance and use of information to enhance the organization’s capabilities, increasing efficiency by increasing the ability of users to access and implement much-needed information.

The second key pillar is a learning technology infrastructure. Cat U was founded in January of 2001 to serve as the “global product manager for learning” (Glynn, 2008, p. 40). Accordingly, Cat U has an important role to play in the company: it “works across the enterprise to ensure Caterpillar’s annual $100 million learning investment is linked to company strategy” (p. 40). Again, learning at Cat U, and Caterpillar Inc. in general, is goal-oriented and focused. Cat U’s responsibilities in its capacity as global project manager for learning include: “the enterprise learning strategy”; “the enterprise learning budget”; “the development of new learning and the redesign or retirement of existing learning” and “the policies, processes, and standards for learning the enterprise metrics and measurements” (p. 40). As Turban et al. (2010) explained, enabling learning “across an extended enterprise that includes employees, dealers, suppliers, and customers” is a formidable challenge (p. 295). Cat U’s solution is e-learning: its knowledge management system, the Caterpillar Knowledge Network, offers over “4,000 communities of practice organized around specific business-related topics” to Caterpillar’s “employees, dealers, suppliers, and customers” (p. 295). On the Caterpillar Knowledge Network’s communities of practice, all of these stakeholders can “exchange information, share files, ask questions, and contact subject-matter experts around the world” (p. 295). Moreover, the Caterpillar Knowledge Network is searchable, which gives users “access to information created everywhere, anytime, in every area of the organization” (p. 295).

In this vein, a key function of the Caterpillar Knowledge Network is actually to preserve and retain knowledge “of retiring executives and experts” (Turban et al., 2010, p. 295). This was an acute problem for Caterpillar Inc. by early 2000, when “nearly half of CAT’s senior leadership team and the general employee population were eligible to retire” (p. 295). The company’s Caterpillar Knowledge Network contains listings of “approximately 10,000 experts”, all of whom have “searchable ‘expert descriptions’”, enabling users “within Caterpillar and throughout the value chain” to search for them according to their area of expertise (p. 295). Moreover, the Caterpillar Knowledge Network provides users with searchable case studies and object lessons in learning from past experience: the “’lessons learned’” section captures these experiences “in a formal template” (p. 295). The Caterpillar Knowledge Network also provides a powerful platform for networking, one that gives users access to other users, including the aforementioned subject matter experts, worldwide (p. 295). As Turban et al. (2010) explained, this allows “a wheel-loader engineer in China… to quickly locate a transmission software expert in Europe” (p. 295). And with synchronous online learning, learning can take place in cyberspace, connecting users worldwide. The instructor is live, and they interact with “dispersed learners who are attending virtually” (p. 295). This measure has saved Caterpillar Inc. both time and money, simply by “allowing information to be distributed quickly” and by reducing travel costs as well (p. 295). As Turban et al. (2010) explained, “between January and October of 2007, more than 2,100 classes were conducted using synchronous online learning and more than 300,000 meetings were conducted using virtual collaboration” (p. 295).

The effects of the learning technology infrastructure on Caterpillar Inc.’s operations have been salutary: Glynn (2008) reported that Cat U “is the global business process owner for learning-related systems and processes” (p. 42). The university has integrated Caterpillar Inc. and its supply chain into “one universal virtual collaboration tool, synchronous online learning platform, learning management system (LMS), and knowledge network,” which has enabled the organization to reduce unnecessary expenditures of time, resources and effort (p. 42). Because the worldwide LMS uses a learner-centric user interface, the individual learner experiences the system “in a customized fashion”, making for a better and more effective, dynamic learning experience (p. 42). In fact, the learner-centric user interface “dynamically constructs the learner’s individual learning plan (ILP) on his desktop” (p. 42). Four fundamental sections comprise each ILP: the first is “enterprise required learning,” the second, “business unit required learning,” the third, “job-role specific learning,” and finally, the fourth is “discretionary learning” (p. 42). This ensures that every employee is equipped with the knowledge needed for her/his job.

The final key pillar of Caterpillar’s great learning infrastructure is alignment (Glynn, 2008, p. 43). The alignment process is seminal to ensuring that the company is able to meet “the needs of the customer and the business and that the learning is strategically appropriate and tied to the business objectives” (p. 43). The learning at Caterpillar Inc. is, as seen, very goal-oriented and job-specific: it must be tailored in accordance with the responsibilities of each job in question, and aligned with the overall goals of the organization. The challenge is to align “learning needs and strategies at the division and enterprise levels,” in order to enable the company to continue to grow in productivity and efficiency (p. 43). Employees who are better-qualified and more well-learned for their jobs can be expected to perform more effectively and experience higher job satisfaction. Overall, learning that is properly aligned with the company’s business strategy can be expected to have a positive effect on the company’s bottom line, “because with better enterprise performance comes better enterprise profitability” (p. 43). The cardinal idea here is that the performance of the business is in turn dependent upon human performance, which depends in turn on human knowledge, human capabilities, human skills (p. 43). Properly aligned learning achieves these key objectives. The learning infrastructure also provides plenty of opportunities for customer participation and interaction, primarily through the avenue of the division learning plan (DLP) process, with every lead learning manager tasked with the responsibility of “developing and implementing a DLP” (p. 43).