MindLeaders: Fueling the Learning Revolution

What is Talent Management Worth?

Apparently not much, if some data that Taleo shared at its annual user conference is any indication. Brian Summer attended the conference and posted the following data points on his ZDNet blog.

• $47,000 average salary for an American worker
• $12,000 average yearly ERP expenses on a per worker basis
• $10 average yearly talent management expenses on a per worker basis

Let’s just look at those numbers again. If these are right, the average company is spending the equivalent of 25% of the average worker’s salary on ERP programs, while a pittance (a fraction of 1%) is spent on talent management programs. And I’d have to argue that the average worker doesn’t even see that much benefit since those dollars aren’t allocated evenly across most organizations.

Are these numbers surprising? Unfortunately I have to agree with Brian that they are not. Most employee development and talent management programs suffer from poor funding. As many of our white papers have noted, most programs to purchase equipment (and I’d put ERP software in that category even though it’s not physical equipment) are better planned and funded than basic employee development and talent management functions.

For example, even though companies say that they believe that performance management drives successful outcomes, a mere 11% provide ongoing feedback and measurement against stated corporate goals. Performance management is still bogged down in the outmoded annual review process and prevents organizations from realigning employee goals to changing company objectives throughout the year. Why? Perhaps because annual reviews, completed on paper or word documents (which for all practical purposes is the same) fits nicely into that $10 per year expense. Now I’m not one to say that throwing money at a problem is always the solution, but given the figures there does seem to be room to spend a little more to better align and utilize the talent within an organization.

Thankfully all is not lost. According to a new Bersin and Associates study, the market for integrated talent management solutions is growing, even in this recession. So companies know they have a problem and are trying to correct course.

What do you think? Does talent management receive the same time and funding as ERP upgrades and maintenance at your organization? Should it?

Using Talent Management and L&D to Meet Strategic Goals

In their September newsletter, Bersin and Associates featured a case study on one of our local companies – Nationwide Insurance. In 2007, Nationwide decided to migrate most of its applications from a COBOL/mainframe environment to a Java/web services model. Needless to say, this had huge implications for the organization and its IT staff. Nationwide had to decide whether to buy, build or rent the capabilities it needed. The case study is about their decisions and how things worked out. Here’s what I loved about it:

• Nationwide decided to build their talent pool’s skills to match their needs, rather than lay off most of the staff that had served it well to that point.
• Nationwide took the time to set clear goals for the program, including:
• Executive sponsorship from both IT and HR branches of the organization
• Incorporating both technical and business process training in their program
• Determining performance results, best practices and work environment
• Evaluating the appropriate mix of classroom training, coaching, practice, and informal learning
• Interested associates had to apply and be selected to participate in the training program.
• Communications about the program were frequent and in many forms such as e-mail, newsletters, meetings, etc. They emphasized the future direction of the company and the intensive nature of the training.
• They got great results! 70% of program grads were at expectations for their salary band within 3 months; 100% within 9 months. Better yet, all hiring managers would recommend the program based upon the quality of the results.

As Nationwide has demonstrated, properly managing your talent pool allows for the flexibility to meet the changing demands of the marketplace. This is certainly an instance where HR, L&D, and management goals were clearly aligned to meet a company’s strategic needs. The case study is available to anyone who wants to read it for a limited time. Go out and take a look!

Training Investment Predicts Future Stock Price

Banks are in the training news again. Last week I wrote about a WSJ article that said banks are losing top performers because they are failing to develop them. This week an article on Workforce.com discusses new research which shows a link between training budgets and future stock price.

The research was focused on banks, and their performance relative to their peers. Though the data set was relatively small, “it appears training expenditures were a very strong predictor of stock price even during last year’s market turbulence.” One of the examples cited was Wachovia. Wachovia cut training per employee by more than half from 2006 to 2007. In 2008, stock prices fell 95 percent prior to the merger with Wells Fargo.

Tying training investment to future business performance has always been tricky. Why should training investment yield better stock price? Improved business performance is one reason. Another theory is that training investment is reflective of overall management focus and direction. Those that invest are interested in long-term performance; those that don’t are only interested in short-term gains. Hmmm. Food for thought.

Retain Your Top Performers

The WSJ ran an interesting article earlier this week about banks that are failing to train and develop their top performers quickly enough. The result? Those performers are jumping ship. This is bad news for the banks. After surviving such a severe crisis, they are going to need all their talent to make good decisions and start growing again.

My guess is banks made a classic mistake in slashing their training budgets. Crisis is when companies have to evolve rapidly, be flexible, and perform at their best. What helps them do that? Training and development programs. Beyond the performance benefits, training and development programs also help build employee loyalty and increase retention levels. Employees know and appreciate when a company takes time to invest in their skills and career path. And the employees who are likely to appreciate it the most are the ones you want to hang on to. Those top performers who out-perform average performers by 40-50%.

Now that the economy is showing more signs of life, top performers stuck in companies with poor talent management practices are starting to look around. They remember how their company behaved when the going got tough, and are prepared to act. Unfortunately for companies, they are also the group with the best chance to make a change, even in a tough labor market.

What do you think? Has your company slashed training budgets? Has it made a difference in your retention levels?

Do You Know Your Company's Values?

I’m sure you’ve heard the advice before. Know your company’s strategy and then tie goals for your learning and development program to that strategy. Part of the problem with this advice is that strategy sounds lofty. It seems hard to quantify. It can be intimidating to discuss. And let’s face it. A lot of companies can’t really articulate their strategy. At least not in an easily digestible format that can be tied to measurable goals.

Maybe a better way to look at this problem is to think about what your corporate values are. What’s the philosophy of daily operations? To be the low cost provider? To be the top rated customer service provider? To be the most efficient? To have the highest quality? Look around and see what values are acted out day after day in the organization. That’s the company’s philosophy…and the default strategy.

Different corporate philosophies create differing goals for learning and development…and talent management…and pretty much everything else. For example, if the goal is to be low cost, then training customer service staff to provide the highest quality (and most expensive) service is contrary to company philosophy. A better approach would be to teach techniques that keep customer service calls short and to the point.

Try to align to your learning and development goals to advance company values. And open conversations about schizophrenic behavior like saying the goal is to be tops in customer service and then putting in incentives to reward those who spend the least amount of time per customer service call. That’s one way for learning and development programs to add a lot of value and be part of company strategy.

What do you think? Do you know your company’s values?

Where Is Your Training Dollar Focused?

I read an interesting post on the Informal Learning Blog that had me pondering this very question. Where are most training dollars focused? My suspicion is that it’s the basics. Things like getting the newbies ramped up in their new jobs, teaching basic tasks in new software, and providing new managers the fundamentals.

But is this the best place to focus? The Pareto Principle tells us 20% of employees generate 80% of a company’s returns. Given the incredible impact of that 20% (read star performers), wouldn’t it make sense to focus more attention there? Taking a handful of average performers and turning them into superstars would make an incredible difference in bottom-line results. Talk about demonstrable ROI!

Of course, this is a tougher group to train. Taking a very good project manager and making them exceptional requires specialized content, maybe even personalized. Same goes for sales people or managers or developers. Each very good performer will have their own set of weaknesses which has to be improved to make them superstars. And with limited resources, training groups are often forced to focus on what can be given to the many to keep things running, rather than to the few that would move things to the next level. Some thoughts to consider if you’re trying to improve the results of your training program:

• Do you know which job titles in your organization drive 80% of the revenues?
• Do you know who the superstars are in that group?
• Do you know who the very good performers are in that group?
• Have you talked to either one?

What do you think? Are your training dollars focused on the basics? Or the 20%?

Can corporate policies keep people off Twitter and Facebook?

According to legend, news happens in threes, and in the past two days the news has given us three major employers - ESPN, the NFL, and the Marines - who have all put new social media policies in place. Each one has approached it differently and given us a wealth of object lessons in one week.

• ESPN released some "additional guidelines" for participating in social networking. They seem to have tripped over their shoes, though: when it happened, one of their workers immediately tweeted that they were now only allowed to tweet for ESPN directly. ESPN has spent the past day trying to clarify and says that their new guidelines are not intended to shut down social media use.
  
  It seems that ESPN's problems stem from their guidelines being pretty vague: how exactly do you interpret the guideline "The first and only priority is to serve ESPN sanctioned efforts?" Is it really feasible to require that "Prior to engaging in any form of social networking dealing with sports, you must receive permission?" Other guidelines, like "Assume at all times you are representing ESPN" and "If you wouldn’t say it on the air or write it in your column, don’t tweet it" make much more sense.

• The NFL seems to be setting up policies that are more restrictive, but also more closely defined and, consequently, less open to misinterpretation. They seem to be putting restrictions on when their employees can tweet: they cannot tweet from meetings. (One glaring issue: this policy seems to only be apply to Twitter - how about a Facebook post? Oops.) The NFL already bans any kind of cell phones or computers on the sidelines, and the word is that Twitter restrictions may apply to game days in their entirety. It has the benefit of being clear, although it's a ham-handed approach. (But what else do you expect from football?) I can hear the hundreds of questions coming in already: What about after the game? What if my baby is born (or insert any other totally-non-game-related thing here) on a game day?
  
  There will always be events within an organization that are secret and cannot be spread yet. The NFL is trying to approach these with a sledgehammer, but the germ of an age-old idea is there: some projects or meetings must begin with "And by the way, this is company confidential, please don't share this outside these walls." With extra emphasis in these social media times.

• The Marines have banned Twitter, Facebook, and MySpace entirely from their computers. I give them a large pass on making that kind of blanket approach, since unlike most offices, when Marines are on duty it's truly a 24/7 life. But even the Marines have only put the ban in place for a year while they sort out security issues, and only for the military computers - so in theory, marines who aren't deployed can still log into Facebook, etc. from home at the end of the day. What kind of guidance is the Marines giving to their marines for that home use?

It's smart - and becoming essential - to provide your organization with guidance and education about the proper use of social networks. The spread of information is like a flood: you can't stop it, but you can do a lot to channel it in directions you'd rather it go.

For a couple of stellar examples of corporate Web 2.0 policies, IBM and Sun have made theirs publicly available and are great examples to take inspiration from if you need to build up your own.

Knowledge Workers and a Culture of Learning

Why do some organizations have a culture of learning and others don’t? As with most things, it boils down to the day to day choices that make up a group’s culture. And many of those choices have little to do with the company’s learning program. Like the way managers treat their employees and how employees view their company. Those views can make a big difference in attitude, engagement, performance, and learning culture.

Most of today’s workers are knowledge workers. So here’s the question. Does your organization treat them like knowledge workers? Is it ok for them to learn and teach on the job? Do managers set clear objectives and then allow workers to manage themselves in achieving those objectives? Is quality of work at least as important as quantity of output? Are workers regarded as an asset or an expense?

As you might guess, the more questions you answer "yes" to, the more likely it is that a culture of learning exists or is easy to facilitiate. As for those answering "no" to most of the questions, well I'm assuming that a culture of learning is the least of many problems.

Many of these questions correlate to Peter Drucker’s six principles of managing knowledge worker productivity, but productivity is the least of the gains. Treating knowledge workers like knowledge workers, with respect and regard for their ideas fosters a lot more than productivity. It fosters collaboration, engagement, and innovation. And yes, even a culture of learning.

How does your organization rate? Do you see a correlation between appropriate management of knowledge workers and a learning culture?

Do You Know What's Next?

The economic news is turning optimistic. Last week several economic indicators came in ahead of expectations. Foreclosures in some of the hardest hit states are starting to stabilize. Geithner is quoted as saying that the economy is beginning to recover. The stock market is continuing to rise. Unemployment is still high, but perhaps the worse really is behind us.

If that’s true, do you know what’s next? I don’t mean for the economy. I mean for your learning program? This past year has hit many learning programs hard. Many have been hunkered down, cutting costs and just trying to survive. But now that things are slowly improving, companies will begin positioning themselves for the next cycle of growth. Are you ready to help your company do this? 

Something to consider is working with your company’s talent management program (or starting one). Learning programs are key to talent management programs (see our white paper). And effective talent management is key to a company’s success. Consider recent research from Bersin and Associates which points to the incredible business returns experienced by those with intermediate or advanced talent management programs.

·        They have 17% lower voluntary turnover rates

·        They have 41% lower turnover rates among high performers

·        Their median revenue per employee is 26% higher

·        They are 28% less likely to have had a major layoff in 2009

·        They are 109% more capable of retaining high performers

·        They are 87% more capable of “hiring the best people”

·        They are 92% better at “responding to current economic conditions”

·        They are 144% better at “planning for future talent needs”

So if you don’t know what’s next for your learning program, talent management seems like a great place to start. What do you think? Are things starting to turn around? What’s next for your program?

Managers are key to building successful training

The Pareto Principle states that 80% of your results come from 20% of your sources. In training, I think the 20% is easily the front-line managers in your company. And today seems to be a day to reinforce that thought.

Josh Bersin posted on his blog about the proof his analysts have been gathering that coaching and development is one of the keys to the economic success of a company.

Because over the long run ..., businesses succeed through their ability to adapt, learn, and move people from job to job.  Without a strong culture and set of processes to coach and develop people, this becomes very difficult.

Clive Shepherd wrote today, too, that managers will determine the success of learning and development.

The lesson from all this evidence is quite clear. Unless you recognise that line managers are your most important stakeholder and ensure their commitment to your l&d strategy, you stand little chance of success.

It's important for the people you're teaching to know what they should be gaining from their training programs, how it will be used in their everyday jobs, and how it can impact their business. And it's critical, vital, crucial for their managers to know the same thing. I think that if you focus on that 20% of your audience, you'll see 80% return on your investment. How do you get managers involved with your training programs?