CEOs rank investment in people as the #1 way to accelerate performance, but 92% of them fail to see a clear business impact from L&D programmes.
There is no doubt that the traditional approach to corporate learning is hugely straining under the weight of the impact of digital disruption across industries. There were always question marks over the competence-and-course model that has been live for so many years, but now it’s hard to see how it can survive as the default pillar of how we think learning can solve the CEO challenge.
The reasons for its strain and failing seem to be consistent across industries and they seem to boil down to 4 key areas.
The course and competency model was always inefficient
Most courses, especially online ones, have the goal to just give understanding rather than a drive to change capability – which is what CEOs want and need. The normal pattern is that a business stakeholder comes with the answer to their capability problem, and they want x number of course for y people. We then take the order and deliver successfully against it with our guiding star being ‘how do we get as many people as we can through the course as quick as possible.’ At the end of most online courses, we will check to make sure that the attendees can recall or more likely recognise the answer; and that ability to recall fades dramatically as the distance increases between when the knowledge was understood and when its actual application in their job happens.
The knowledge that gave the understanding is rarely accessed again, as it exists in a manual or a heavy digital course, or still remains in the head of a great trainer – none of which are easy paths to get back to. Which is why 99% of people don't get back to the source to refresh when they actually need that knowledge. Instead they guess, ask someone nearby, or broadcast the question out to a chat group – all of which is hugely ineffective and a massive wasted opportunity.
The challenge is that most models define the outcome of a learning programme by successful completions, not the business outcome and the vision from the stakeholder. Progressive companies like Hilti have changed this, and the goal of their learning business partners is to extract the vision of the stakeholder and the change they want – from which the metrics of success will be derived.
Hilti have moved beyond skills and competence as the measurement of a learning programme’s success: instead, they have become clear about the change in the business they are trying to impact, and that becomes their North Star in everything they design. This seemingly small change transforms the outcome from going south to going north and giving the CEO and stakeholders what they want; but can't get to without a modern L&D dept.
When we design for understanding or even capability, it de-focuses us from the performance goal our stakeholders and CEO want, and almost always gets us to the wrong conclusion – that a series of formal courses is the main tool of our design. It's this first wrong step that has been dooming us to business irrelevance for years, and for those who are getting it right it elevates L&D to strategic importance and a seat at CEO's table. The problem, as Andy Lancaster says, is that we have an ‘addiction to courses’… and it’s not healthy.
Acceleration in the reduction in the lifetime of skills
Now, let us add the evolving challenge around the half-life (the time it takes for a skill to lose 50% of its value) of skills and the argument for change becomes even bigger. In the 1920s, the half-life of engineering skills was estimated to be around 35 years. In the ‘60s it was down to 10 years; and now we are down by some estimates to 2.5.
Construction manufacturers are moving from just selling construction products to selling the end Service Levels that their internet-connected construction equipment provides; engineers now need to be tech-savvy as do the salespeople and services staff. That's a huge transformation that’s needed to continually upskill and support these roles perform at the level the business needs, as many of these industries are now heavily tech-related and are now running at the pace of continual technological change.
It's not simply a case of developing people to support them performing for their next role but accepting that their current role is continually evolving – and at a faster pace than ever before – and we need a new way to support this paradigm change, which the course-and-competency model can no longer be the central pivot point of anymore. To stick with the engineering analogy, we need our engineers capable of solving a customer’s problem on a product released last week, rather than simply certified to recognise the right answer from a course nine months ago.
What’s also clear is the half-life of L&D skills is also diminishing. We are starting to see organisations and progressive training companies really evolve the roles of their teams as they start to get the mix of technology and people right. Phil Whitehouse recently saw a 400% increase in engagement of apprentices on their 12-month programmes, when their mentors moved from solely face-to-face interactions to becoming more digitally savvy – increasing their digital social engagement for their cohorts. We are seeing this success theme happen more and more, as organisations start to design more holistically and recognise that the roles of L&D are also changing and can be far more impactful than ever before.
The acceleration in the growth of knowledge has outpaced faster courses/horses
The pace of knowledge creation is consistently accelerating and will continue to do so.
IBM estimate that human knowledge is now doubling every 12 hours and it’s estimated that corporate knowledge is doubling every 12 months (on average). That creates a huge challenge for traditional L&D. Our companies are transforming faster and faster – B2B software manufacturers release major new upgrades every 3 months, car manufacturers like Tesla produce software upgrades to their cars every 6 weeks, some beauty brands are releasing new products every 3 weeks and they all need sales, engineers, service and partner channels to have access to new knowledge surrounding these products and the expectations.
The time to create, design and rollout courses averages at best around 12 weeks. Using the Henry Ford analogy, the answer to this paradigm shift is not faster horses (or in our world, faster courses); we need a whole new way to think about the challenge.
The need to understand more and more knowledge is getting greater, and we know that only a fraction of the knowledge will stick and be able to be recalled when needed. So the answer cannot be to create more courses as the demand for knowledge distribution becomes greater and greater. Progressive L&D companies like Alliance Residential now design between 60% and 90% of what would have been available in a course to never be taught formally, and instead designed purely to be accessed at the point of need.
This approach can be embedded at the place of work they are its most likely to be accessed, as well as being search optimised. Whether that is Rentokil placing QR codes on their pest control units that deep-link to content about that specific device or the placement of content to be surfaced within the system a person needs support in, the key factor is that all content – formal and informal – is designed in a bitesized manner.
And more and more that it is being optimised for search, allowing the answer to a person’s question in the flow of work to be found via the fastest path possible. And again, that is not to surface the course the content sits within, running that race against progressive L&D organisations puts our people in a distinct disadvantage in the competitive landscape.
The rise of Data Within is creating insights that prove both the success and failure of L&D – no place to hide, and lots of ways to shine
Data is a double-edged sword for L&D. On one hand, data is coming through consistently such as ‘92% of them fail to see a clear business impact from L&D programmes’, which is damning old approaches to our current challenge; but on the other hand, it's a valuable weapon to show the benefit and impact of new approaches and get us a seat at the CEO table – because we now have access to data and insights in the same way marketing directors and sales directors do.
Transformational CLOs have already living this journey as are L&D savvy business stakeholders like Bruce Swan at Panasonic – who were crystal clear on the performance targets they were trying to achieve when they increased their NPS scores by 33% and retention by 26% – I particularly like these two stats, as they hit on likely the two major that KPIs L&D can have the quickest impact on: business performance and staff attrition/retention.
Like Panasonic, Scandic hotels directly saw the potential of learning and learning and learning technology to make Scandic a place where their staff was more likely to attract the future workforce they need, as Lena and Siri articulate perfectly in their IMD case study.
The most powerful thing about data in L&D is how it helps refine our new modern L&D approaches and experiments. We can create experiments, pilots and programmes, and be clear on what assumptions we can make about which levers will impact business performance.
The answer to what creates a positive and negative impact will be in the data and can guide us on what to do more of and what to do less off. Data allows us to experiment with purpose, and then refine our learning programmes to make sure we are part of the 8% and not the 92% as explained really well by Rachel in her story, and ultimately answer the question every CEO wants to know: ‘Why should I spend more money on L&D rather than cut the budget?’
Instead, we can let them ask the question ‘Where should we spend more money on L&D because it's delivering business impact, and where should we spend less because it isn't?’
Designing and measuring for capability and business impact is a whole new mindset, and it takes a transformational approach, but the reward is far greater. However there also isn't a choice to change – it’s just a question of when.
The emperor’s clothes are truly off, and transformational CLOs are already leading the way. Making the move from a competence-and-course mentality to a capability with modern business impact. Holistic learning experiences makes L&D strategic, because we shift the dial on company performance and we use data to prove it – just as every other department does.
L&D may be late to digitalisation, but we are now well and truly at the party, and its time to show what we can do.
Fuse is currently collaborating with its most progressive customers to codify their best practices as well as ours into a series of masterclass bitesized content – which we intend to give free to all fuse customers through our Fuse Academy, where they can continue to ask questions of each other, share best practices and continue to collaborate with the progressive tribe.
If you would like more info about Fuse or how to get access to Fuse Academy, feel free to message me or pre-register here for the Fuse Academy...
References:
1. IB 1. IBM Study, The Enterprise Guide to Closing the Skills Gap, 2019
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