Learning 2.0

Enterprise Social Software: A New Category

Posted on October 2, 2008. Filed under: Enterprise Learning, HR Systems, Learning 2.0 | Tags: , , , , , , , , , , , , , , , , , , , , |

This week we introduced some important and groundbreaking research on a new, important category of enterprise software:  the market for corporate Social Software platforms.   Traditionally our research has focused on identifying the strategies, processes, and systems which help corporate HR and L&D drive effectiveness and business value.  But as we continued to study the market for Talent Management and Learning Management software, we found that almost every software vendor was building features for internal social networking.

As we talk with corporate HR and L&D leaders they tell us that more and more of their focus is moving toward strategies and systems which support and create internal social networks, internal collaboration, content sharing, and informal learning.  So naturally we asked ourselves, how is this all going to come together?

Our research found several things.  First, today most companies are experimenting with many forms of social software in the areas of employee expert directories, customer service, customer community management, sales force collaboration and knowledge management, and technical communities of practice.  In fact, more than half the companies we talked with have active, highly sophistocated communities of practice in many of their customer facing and technical roles.  

Second, we found that very few companies have found a way to apply these tools and solutions to enterprise-wide HR, learning, and talent strategies.  Some, like IBM and Cisco, have invested heavily in this area and are well along on implementing what we call “learning on-demand” solutions internally.  But most companies are still bringing together teams from IT, HR, L&D, sales, and service and trying to figure out how an enterprise-wide social networking strategy would work.

Third, we found that this new application segment has spawned a large and very fast-growing segment of software providers.   While the jury is still out on whether these companies will grow into billion dollar companies or be subsumed into the likes of Oracle, SAP, Microsoft, IBM, and others, we believe that for the next 3-5 years these companies will become very important in the development of strategies and solutions for enterprise-wide learning and talent strategies.  The market is already over $270 Million and we expect it to grow to over $400 Million by the end of 2009.

These new, fast-growing companies like Atlassian, Jive Software, LiveWorld, Mzinga, and Telligent have built highly functional systems which implement the four major categories of “Social Software” – conversations, connections, collaboration, and content.  While most are not uniquely targeting the market for HR and corporate training, all are moving in this direction and they warrant a good look by your organization.

Does this mean that the market for Learning Management Systems (LMS) and content management systems is going away?  No, not at all — but it clearly means that a new “category” has been created, and this new category will challenge LMS providers and corporate buyers to think hard about how they build their next-generation HR and Learning systems architectures.

I encourage our clients to learn about this space – it is transformational.  Our upcoming research bulletin on the role of Social Networking in Enterprise Learning and Talent Management will help you learn more.

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Make Learning part of your Business Strategy

Posted on July 31, 2008. Filed under: Enterprise Learning, Learning 2.0, Learning Programs | Tags: , , , , , , |

One of the important lessons we have learned from our High Impact Learning Organization® research is the simple but profound fact that learning is part of a corporate business strategy.   While many HR and business leaders still believe that “training” is department which improves workforce productivity and should be treated as an expense item, our research clearly finds otherwise.  Corporate learning is a critical part of any enduring business strategy, similar to finance, marketing, sales, and manufacturing.

Consider the following:

Change is the biggest challenge organizations face:  There are five distinct phases of any business – startup, rapid growth, maturity, decline, and rebirth (or death).

Figure 1:  The Lifecycle of a Business

Every company we talk with is going through this cycle – whether its Apple with the i-Pod, Starbucks in Coffee, AIG with its insurance business, Fidelity in 401k, or Target in retail.  The lifecycle takes place across its entire organization or across its individual products and services.  (We will be talking much more about the way talent management strategies vary across these phases in upcoming research.)

The reason for this cycle is the nature of competitive markets.  Whenever a company finds a profitable market, others eventually find new ways to serve it.   This process creates competition and buyers become more savvy.  Prices go down, and the leaders must now find a way to climb further “up the value chain.”  Today we see this happening to Starbucks, for example.  This process of continual evolution is not something you do occasionally, in today’s rapidly changing markets you have to do it all the time!

Caterpillar, one of our best practice research companies, is a good example here.  The company has evolved from steam tractors into a highly diversified global manufacturer of engines, machines, tractors, equipment,  services, and apparel.  During its  100+ year history Caterpillar’s people have had to “learn” a lot – and the company views learning as a strategic part of its business planning and execution process.

We call the companies which succeed over these cycles “enduring organizations,” and they are the focus of a major research effort we have been working on this year.

Learning is the core of Adapting to Change.

If you accept the fact that change is one of the biggest issues a business faces, then the ability to continuously adapt to change (organizational and individual learning) is one of the most important parts of a long term business strategy.   Unfortunately, many organizations don’t internalize this.

For example:  One of the most frequent questions we discuss with L&D leaders is the question of how to measure the value of training.  They ask this question because their leaders (VPs of HR or business leaders) question the investment in L&D and want to do a “zero based budget” each year.

The critical issue here is the top finding in our High Impact Learning Organization research:  the biggest driver of impact from learning investments comes from the development of an organizational “learning culture.”

 A learning culture has many elements, including the organization’s:

  • Ability to face up to its mistakes
  • Ability to use errors as a learning process, not a punishment process
  • Ability to sustain workforce development through bad times and good
  • Ability to break things that seem to work and improve them before they really break
  • Ability to coach people (the #1 high impact talent process)
  • Ability to rotate people into development roles at all levels.

These “cultural” processes in companies go far beyond the L&D organization – they infiltrate leadership, management, operations, rewards and recognition programs, and values.  (The top 50 elements of such a learning culture are part of our HILO research.)

We are just about to announce our HILO Top 80®, the 80 Leading organizations in our High Impact Learning Organization research.  When you look at this list, you will see many iconic brand names – but you will also see many small and mid-sized companies which are highly profitable, highly successful, and owners of their markets.  These organizations realize that learning is part of a business strategy.

Learning vs. Execution Culture

Many organizations call us to ask for help in “measuring training” or “reorganizing L&D” or “building a blended or collaborative learning strategy.”  These are critically important parts of executing the learning strategy of an organization.  But the learning culture goes further – it means that you must balance learning with execution in every single business process.  And we must be careful to balance the focus between “learning” and “execution.”  Many companies think they compete against each other, while in reality they are totally aligned.

Consider the following.  Are the two columns competitive or complimentary?

 Figure 2:  Execution Culture vs. Learning Culture

One may argue that “we don’t have time for learning,” we have a job to do.  Well that is true.  But of course if you are not “learning” while you “execute,” you are likely to “execute” yourself into oblivion.  Learning and Execution go together.

Examples of Learning as a Business Strategy

Consider Toyota.  How can Toyota manage to be first-to-market in hybrid automobiles, yet still continously compete against GM in trucks, mid-sized cars, and other existing markets.  Are the engineers at Toyota smarter than the engineers at GM? 

Absolutely not.  I have met several GM executives and they are among the smartest and most focused leaders of any business.  But somehow they have not built the same culture of continuous learning which Toyota has.  Toyota has many well documented processes which build and reinforce this culture of learning:  quality programs, Kaizan, career development, experimentation, and empowering line workers to identify problems and fix them.

Consider GM.  GM, for all its challenges, is an amazing company.  As they fight their high labor and medical costs and work to trim products, they are instituting many innovative new learning programs – and I sense that their learning culture is undergoing tremendous change. 

For example, GM has recently created a program called its “JumpStart” program for younger employees.  These GenX and GenY engineers and marketeers get together and have created career paths and development strategies in conjunction with the top 72 leaders at GM.  Recently the JumpStart team created a “car of the future” and went out and purchased a wide variety of electronic devices, music players, cell phones, and PC’s to demonstrate the opportunity for GM leaders to further innovate on user design and consumer electronics integration.  These initiatives are being thrust upon the “old guard” at GM to shake up complacent thinking and encourage innovation in products like the Volt, GM’s new electric vehicle.

Consider Bank of New York/Mellon.  In this organization, as in many other strong learning organizations, there is an assigned organizational effectiveness consultant located in each major business area.  This individual monitors and evaluates all work processes to look for opportunities to measure job effectiveness, find errors, and implement new opportunities for learning and performance improvement.  In effect, this role is a “learning culture” manager.

Consider EMC, one of the most successful high technology companies ever founded.  EMC sells a wide variety of disk storage, enterprise software, and IT services.  EMC has a business manager role entitled “Director of Business Performance” who serves as the performance consulting manager in each and every major business unit.  This person reports to the corporate university structure, but their job is to help the business unit implement continuous learning in all aspects of the business — including identifying processes with errors and flaws.

Learning Culture means Honestly Identifying Errors

Once an organization considers learning part of the business strategy, they look at “execution” differently.  They rigorously measure performance, constantly looking for errors and variances, and reward and incent managers and employees to fix errors.  They empower line workers to fix things immediately, and they provide a wide variety of formal and informal learning solutions at all levels. 

Our research identifies the top 50 elements of a strong learning culture, and you find that every one of these elements is “good business.”  If you are an HR or L&D leader, you can promote and spearhead this philosophy through your programs and organization and approach.  If you are a line manager or leader, you can think about how “learnign and execution” are both different sides of the same coin, not necessarily in conflict with each other.

More to come on this critically important topic…


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Social Networking in Talent Management: Where are we?

Posted on July 2, 2008. Filed under: Enterprise Learning, HR Systems, Learning 2.0, Learning Programs, LMS, LCMS | Tags: , , , , , , , , , |

Whew.  Earlier this year we embarked on a major research effort to understand the growing role of social networking in enterprise learning and talent management.  The results are amazing.   Let me give you a brief preview of some of our initial findings:

  1. Organizations are working mightily to figure out how to leverage social networking (blogs, wikis, presence awareness, messaging, expert directories, communities of practice) in all forms of corporate training, customer education and support, and talent management.  For example, 77% of all L&D organizations believe that younger workers (under 25) have significantly different learning styles than older workers, yet only 16% feel they have developed some level of expertise in the implementation of collaborative learning.  In our most recent Learning On-Demand research, even the most advanced companies tell us that only 14% of companies are using blogs or wikis, and fewer than 4% feel highly successful with these solutions yet.  One big surprise:  28% of our research respondents are not even using Instant Messaging yet, illustrating how long it takes for collaborative solutions to reach broad adoption (and support from IT).
  2. Learning platforms are being “re-examined.”  Most of the companies we talk with are significantly rethinking their entire learning platform strategy (LMS) to understand how to evolve or add new systems which support collaboration.  And today’s LMS is not as successful as one would believe:  across all the organizations we studied (approximately 900 different organizations), on average only 51% of employees use the learning platform at all.
  3. Sophistocated, large, global companies are moving fast.  Almost 1/4 (24%) of organizations now have some concept or strategy for “learning on-demand” (the term we have coined to describe the next era of corporate e-learning), and larger organizations (those with more than 10,000 employees) are twice as far along as small to mid-sized organizations.  The reason, of course, is that large organizations have no choice – without collaborative solutions they can no longer scale their L&D programs.
  4. Social networking software companies are sprouting up like weeds.  We identified 90 such companies in our research, and more than 35 of them are somewhat focused on the corporate internal employee market.  Our initial research clearly shows that these companies fall into four categories:  (A) software providers focused on corporate learning, HR, and collaboration systems and solutions (e.g. IBM, Microsoft-Sharepoint, Jive, Mzinga, Awareness, Q2 Learning, and others), (B) providers focused on external customer and public-facing collaborative networks like a company external blog (e.g. Lithium, Ning, Communispace, Telligent) (C) providers focused on content management systems, who have added on systems for collaboration (EMC, OpenText,  Ektron, Alfresco) and (D) true application software companies who are adding collaboration and social networking to their systems (SuccessFactors, Saba, CornerstoneOndemand).
  5. I firmly believe that this new form of software-enabled collaboration is a revolution, not an evolution.  Like many of the software innovations that I have personally witnessed over my career (e.g. the first color graphics PC, the CD-ROM, the web-browser, Flash, SaaS architectures, and others), social networking is really going to shake things up.  The reason is that these systems are both complex, data-rich, and require a new type of software architecture.  A system which supports 200,000 employees and customers with in-depth employee and customer profiles, active communication and blogging, tagging, content management, custom branding, and tracking each and every communication is quite a complex software solution.  As we examine these vendors we are finding some very significant new areas of functionality which are going to change and upset the traditional HR software companies.
  6. The jury is out on what our ultimate HR software architectures will look like.  Small and mid-sized companies will likely adopt social networking through their SaaS application solutions.  Enterprises are more likely to develop IT standards eventually.  And many companies will implement departmental, divisional, and application-led solutions while the market evolves.  While most enterprises would like to have a corporate “architecture” in this area, it will take time for this to occur and it often takes a few years for the “safe, corporate-approved” solutions to emerge.  (None are there yet.)

We also recently hired David Mallon, our newest analyst covering this area – who is actively involved in identifying case studies and product solutions in “learning on-demand” and the applications of social networking to corporate talent management. 

Research Available:  A Primer on Social Networking in Talent Management

We recently published “Social Networking for Enterprise Learning and Talent Management:  A Primer” which is available to anyone who would like to register at our website. 

Note:  we are actively seeking input on your experiences and organizational strategy in this area – you can participate in this study by clicking here.

An exciting area and we look forward to giving you more information as we learn more!


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New Disciplines of the Modern Training Organization

Posted on June 2, 2008. Filed under: Content Development, Learning 2.0, Learning Programs, Talent Management | Tags: , , , , , , , , , |

This month we are launching The High Impact Learning Organization®, a research study which has been more than three years in development.  During this time we have interviewed hundreds of corporate HR and training leaders and reviewed in-depth trends of more than 780 global organizations. 

Listen Audio Overview of this research:  click here.

As I have been discussing this research with our research members, I realize that one of the most profound changes that is taking place in corporate learning and development is the need for a new set of disciplines, a new set of skills and competencies.  The traditional “instructional design, development, and delivery” skills, while still important, are fading into the background.

New Skills and Disciplines

  • Facilitating learning, not Delivering learning.  In today’s networked organizations, informal or collaborative learning is now critical.  Rather than creating a learning program and delivering it to an audience, today’s high-impact learning organizations create learning opportunities – by creating communities of practice, social networking experiences, and subject-matter expert-led experiences.  NetworkAppliance, Cisco, Dell, Pfizer, IBM, and many of our other research members have transformed their learning organizations by providing tools and opportunities for experts to teach and share information. Such tools and systems include blogs, wikis, video studios, rapid e-learning tools, RSS feeds, and even “twitter” and other social networking tools. 
  • Information Architecture, not just Web Design.  In today’s corporate learning environment, it is not enough to build “compelling courseware” or an “easy to use LMS.”   We have too much information available to our employees and customers:  product documentation, job aids, online courses, how-to guides, videos, and more.  The critical skills needed are the ability to create an online experience which is relevant and usable for the employee at their time of need — and this requires a focus on information architecture, not just “ease of use.”  (For more information on “information architecture” please read our research.)
  • A Learning Architecture, not just Blended Learning.  The concepts of blended learning, which I first wrote about in 2003 and 2004, have not gone away.  In fact they are more important than ever.  But now you have so many choices of media, collaborative tools, simulations, and other forms of content that you must ration and simplify your choices.  The answer is what we call a “corporate learning architecture,” which describes the tools, approaches, and processes you will support in your organization.  It gives program managers and learning executives a recipe of what to do when.  Again, we discuss this in detail in our research.
  • Competency-Based, Role-Based, and Function-Based Learning, not just Learning Paths.  In today’s “content-rich” organizations, our job is now to create “relevance and context” not just “content.”  This means that when we create a learning program and some online experience to supplement it, we must consider how the learner will locate, use, and apply the content.  If the program is a career or leadership development program, it must be competency based.  If it is a performance-driven learning program, it may need to be role-based (e.g. defined and customized for a certain job role) or function based (e.g. defined and customized for certain job functions which may cross roles).  Each of these models requires a slightly different way of thinking about and developing content.

    A perfect example is sales training for a new product rollout.  Do you want to develop skills in product usage and demonstration?  Do you want to develop skills in sales objection handling?  Or do you want to build solution-selling skills?  Each possible training strategy will required content in different forms for different uses – and in most major product rollouts you need all elements!  Read our Learning Leaders® report on how Symantec solved this problem in their massive new security product rollout.
  • Integration with Talent Management, not just Driving Organizational Competencies.  Finally, one more “new discipline” which we must all address is the need to work closely with our talent management brethren.  In today’s talent-constrained organizations, the L&D organization must understand the needs for new career development programs and portals, integrated performance and development planning processes, competency-based assessment and recruiting, and onboarding.  These processes are not new to L&D professionals, but they take a different level of rigor and approach to the traditional “performance-driven” training programs.  They are more complex, take longer to implement, and require a deeper level of organizational commitment and change.

The Traditional Skills and Disciplines

 Many things in organizational learning have not changed.  You must still understand the principles of performance consulting, needs analysis, instructional design, and assessment.  Learning organizations must still partner closely with line managers and business executives to understand the skills needed to meet urgent new business priorities.  And they must continue to hold themselves accountable for measuring the adoption, alignment, efficiency, and impact of the L&D investment.

But while these disciplines remain, our research clearly shows that the “high-impact” organizations are focusing more and more on developing the new skills above.  Read more about the Top 18 High-Impact Best-Practices of High-Impact Learning Organizations in our research.

As always, I welcome your comments.  

(To get a copy of The High Impact Learning Organization® research report, click here.)

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Managing Innovation: Google and the “Learning Culture”

Posted on April 10, 2008. Filed under: Enterprise Learning, Learning 2.0, Organization & Governance, Talent Management |

As we prepare for our annual research conference IMPACT 2008:  The Business of Talent®, I want to mention an important topic which has come up frequently in the last few weeks:  the critical importance of managing innovation.

All organizations in all industries must continuously deal with change.

Our research continues to show that one of the greatest strengths of enduring organizations is the ability to effectively adapt to change.   Every market we study is undergoing continuous change:

  • Global climate change and a focus on environmentalism is changing manufacturing, technology, insurance, and consulting.  Tesco is computing the carbon footprint of almost every product it sells.  GE expects to generate more than $20 Billion in “green” products in the next ten years.  Apple recently committed to recycling as much as 40% of its used computers in the next 5 years because of buyer backlash.  Insurance companies like Marsh McLennan are restructing their products to offer insurance to businesses located in low-lying areas.   Chevron is rebranding itself a company of “people energy” not “assets.”   The “green economy” is reshaping most businesses.
  • The economic slowdown and credit crunch appeared rapidly and dramatically.  Bear Stearns found itself in the wrong business at the wrong time.  Bank of America, Wachovia, and other retail and mortgage banking companies suddenly see their portfolios change overnight.  New regulations in the works.  Financial services organizations have to deal with reduced spending overnight (read our post on this topic Managing the Downturn in Financial Services).
  • Facebook’s internet traffic is growing at more than 4X the rate of Google, and if it continues it will rival Google within 3-4 quarters.   If people spend more and more time on their social networking site, where will the advertising revenue go?

“Enduring organizations” manage innovation as a strategic process.

Given these rapid changes, companies must prepare for continuous innovation.  Innovation is not “invention” or “creativity”  – rather it means continuously moving “up the value chain” to add value in each and every product and service.  Many innovations are actually quite mundane, but they result in tremendous business benefits.  Consider UPS’s ability to continuously add new services to its shipping business (we use the local UPS store for something almost every day) – this is a company which has learned how to innovate continuously over the last 100 years.

Our research clearly shows that “enduring organizations” do not rely on the “product home run” strategy.  Rather they build a set of cultural, marketing, and engineering processes to innovate continuously.  The history of business is filled with companies that were “one-trick ponies.”   (e.g. Look at the Motorola RAZR vs. Blackberry and Apple’s continuous innovation in cell phones;  look at IBM’s ability to innovate from mainframes to PCs to services while Tandem, Digital, and Compaq could never evolve beyond their core products.)

We call these continuous innovators “enduring organizations” – they have built processes and culture which enables them to grow, evolve, and thrive in the face of continuous and often relentless market change.  Our research shows that these companies have five interlocking key strengths:  strategy, leadership, management, learning, and systems.  I will write more on these five keys in a later article.

Is Google an Enduring Organization?

Which leads me to Google.   Google is the most “googled” company in business today.  Just as IBM and CocaCola were the “best companies” in my youth, everyone wants to pattern themselves after Google now.  How does Google innovate and will the company endure?  And what can we learn from Google’s success?  We’ve been speaking with several Google HR and develpment managers and the company has some very unique strategies.

First, it is clear from our research that Google is relying heavily on innovation to grow.  The company hires the “best and brightest” (top schools, top GPAs, regardless of age and experience) and has created a work environment which is the envy of any Generation X or Y employee.  Gourmet cafeterias, flexible working conditions, and the “20%” policy which enables each and every employee to spend up to one day per week working on a special and innovative project of their own.   Few companies today can afford to lavish such luxuries on every employee.

Second, the company has also built a culture of product innovation.  Dozens of new products and services are available from Google today and engineers are encouraged to continuously build new ones.   Engineers who find bugs in other engineers’ products are encouraged to “check out the code line and suggest a fix.”  The company builds its own internal HR and talent management systems (something few organizations do today), built on the belief that Google can do it “better.”  (Not a strategy employed by many companies these days.)

While most of the “new products” from Google never become market leaders, some do.  Google Finance, Google Maps, and Gmail are all products which entered the market with strong entrenched competition.  Through innovation and strong execution each of these products have taken on tremendous market share in a short period of time.  And when the company sees a tremendous market opportunity to enter through acquisition, Google takes the plunge (YouTube and Blogger).

The question to consider is how “enduring” Google will be.  Will the company build the internal processes and culture to endure for decades like IBM, HP, and Microsoft?  Time will tell.  The web is attracting the most enterprising, hard-working, and bright minds to web 2.0 solutions today (just as PC software did 20 years ago).  Google’s long term success will be dependent on the company’s ability to build a “learning culture” – one which embraces change, innovates continuously, honestly admits mistakes, and invests heavily in the winners early in their process.  As the center of the web moves slowly away from “search” toward social networking, communications, and mobile applications, Google has plenty of innovation to think about in the future.

As a note:  “Learning Culture” is one of the strongest predictors of long term business performance in our upcoming “High Impact Learning Organization” research which is coming in a few months.  A “learning culture” includes a wide variety of programs, processes, and systems which encourage people and the organization to learn, recover from mistakes, and innovate.

The technology industry is littered with the remains of many “first-mover” companies who lost their edge when the market made a dramatic shift (Digital, Lotus, Ashton-Tate, Compaq) – and others who endure by building internal talent processes which create a continuous ability to adapt (IBM, Oracle, Cisco).  We will all watch Google and hope the company builds these enduring qualities in the coming years.

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Talent Management in Financial Services – Impact of the Slowdown

Posted on April 1, 2008. Filed under: Content Development, Enterprise Learning, HR Systems, Learning 2.0, Succession Planning, Talent Management | Tags: , , , , |

This week I had a call with five financial services clients to understand the impact of the economic slowdown on their learning, talent, and systems investments.  How are HR, talent strategies, and enterprise learning investments being affected by the credit crunch and slowdown in the US financial system? 

(The clients included companies in banking and insurance: TD Bank Financial Group, First Horizon National Corporation, BNY Mellon Asset Management, Manulife Financial, and Wachovia.)

I was encouraged to hear that none of these financial institutions is dramatically cutting its talent investments.  In fact, each of these executives told me that their top executives continue to understand the need to maintain investments in people as the business slows.  Most of these companies are, however,  reducing expenses, including a freeze on travel and cutting back on large meetings and conferences.  Some systems budgets are being pushed back.  But for all these companies, existing staff and program investments are continuing.

A common theme expressed by the group is that these cycles have happened before, and that in every case where strategic talent investments were cut, the impact was dramatically negative.  One executive mentioned that during the last slowdown, his company completely eliminated its leadership development program.  As a result of this decision, management problems, employee dissatisfaction, and retention problems quickly grew.  Today, four years later, the organization continues to rebuild the program.  His comment:  “We learned our lesson, and we will never do that again.”

Another trend to note is that technology investments continue.  In fact, every one of these companies told us that they are working harder than ever to advance and improve the impact of their existing HR and learning technologies.  Several of these organizations have large task forces in place (which include IT, HR, L&D, security, and compliance) to develop integrated strategies for online learning and workforce performance support.  (This is completely consistent with our latest research on e-learning, and will be a major topic for our IMPACT 2008:  The Business of Talent® Research Conference.) 

Bottom line:  Well run companies understand that business cycles are inevitable.  (The financial services industry, which suffers economic downturns as hard as any industry, is one of the most sophisticated industries in talent management.)  They have learned that talent and learning investments take years to develop, and these processes and systems create long term sustaining value. 

As one Senior VP of HR put it, “your job is to prevent problems before they occur” — implying that talent and learning programs must be built for the long term.  Even when business slows, the business must still hire, promote, and reward high performers.  These successful financial services firms are following this strategy.

For more information on this topic, please read  Five Talent Management Strategies for a Business Downturn, published in February.

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Starbucks Nationwide Training Day: Did it work?

Posted on February 27, 2008. Filed under: Content Development, Enterprise Learning, Learning 2.0, Learning Programs | Tags: , , , , |

On February 26, 2008 Starbucks embarked on an interesting experiment in enterprise learning:  the company shut down all its US stores for several hours to train 135,000 employees in a single shot.   The goal of this program was to “reenergize our focus on the things that have made us the leading roaster and retailer of specialty coffee.”  The program was designed to reach every store employee in a single event, to re-energize the starbucks talent, and re-establish the company’s focus on brewing the “perfect drink.”

How does a program like this fit into an enterprise learning and talent strategy?  My thoughts:

1.  For a customer intimacy company, this approach drives employee engagement.

One of the biggest benefits of a program like this is that it energizes employees.  Starbucks is going through tough times in the US right now — competition from lower priced competitors, some negative PR about the company’s aggressive growth strategy, and a need to close down up to 600 stores.  We believe that Starbucks core value proposition is the company’s “customer intimacy.”  While Starbucks coffee is good, many other roasters have good coffee.  Here in Northern California, for example, many would argue that Peet’s is a better product.  But what Starbucks really offers is “your coffee” — a product made just for you.

Think about the Starbucks buying experience:  you are offered a wide range of options, the Starbucks employee takes the time to ask you about all the custom features you want in your coffee (type, size, milk-type, addins, etc.), they attentively craft the coffee to your particular specifications, and then “voila” – they write your name on the cup and call your name.    What I believe Starbucks is really selling is “your coffee, your way.”  This is why so many people start their day by saying “I need my Starbucks.”  The key word is “my.”

When a business has this type of value proposition (we call this the “customer intimacy model”), they are very dependent on their employees’ ability to connect with customers, listen to their needs, and then customize the product and service to meet these needs.  In fact, one may argue that Starbucks coffee is not really the product — the product is a combination of the coffee, the store environment, and the employee’s behavior and execution.

In every industry there are businesses which choose the customer intimacy model.  Burger King took this approach against McDonald’s years ago.  IBM has used this model to compete against its technology competitors for years.  Edward Jones uses this model to compete against Schwab and e-Trade.  This business strategy can be very powerful:  it give you tremendous customer intelligence and creates tremendous loyalty over many years.  But it is dependent on people.  If Starbucks has good coffee but poor in-store performance, the value proposition collapses.

A brief example:  I was in a hurry to get a cup of coffee at a Starbucks in upstate New York last summer.  I’m not an ideal Starbucks customer, because I drink my coffee black and i’m usually in a hurry.   But I know I can depend on Starbucks for a quality product so I went in.  At this particular store one of the employees was having a bad day and chose to talk loudly behind the counter, ignoring customer needs.  My buying experience was negative.   After waiting in line and paying $3.00 for what I considered to be a simple cup of coffee, I left disappointed.  The “customer intimacy” model broke down, primarily because of the engagement and focus of a single employee.

The “Deliver on the Promise” one day experience can change this.  It can energize employees and get people refocused on quality.

2.  This program is great marketing.

Let’s face it, this is also great marketing.  For people who dont understand the business of training, it sounds pretty exciting.  The company makes this huge investment, shutting down its stores, to focus on quality.  I am sure it will be highly covered in the news.

On the downside, it has some risks.  Is Starbucks telling the world that its employees have “lost their edge” and perhaps there are problems to be fixed?  The Starbucks blogs are now filled with people commenting on the slip in quality and service in the stores, so by highlighting the program the company may be unleashing a double edge sword.

But on the whole this is a very positive message.  Everyone would like to know that their favorite supplier takes the time and energy to train and empower their employees.  By telling the world about this program Starbucks is formally laying down the gauntlet:  “we are committed to our customer experience and to our coffee.”  This announcement is probably one of a series of such programs Starbucks will unleash over the coming year, and it gives people an opportunity to talk about how Starbucks is turning itself around.

3.  Not a sound way to build skills and competencies.

Finally, let’s talk briefly about the training value.  It is clear from many of the Starbucks blog entries I read that many customers have seen a slip in quality, so training is important.  But is this really a sound approach?

For those of us in this profession, we know that such “one shot” events are good at building excitement, but not good at building skills.  I am not a coffee expert, but I have been told that making a perfect espresso and delivering the perfect steamed milk is a bit of an art.  Given Starbucks’ tremendous growth and turnover, developing and maintaining these skills as not easy.  I remember my days as a McDonald’s employee as a teenager:  there were videos and training procedures for every single step in the store – from making a milk shake to dressing the hamburger buns.  I even went through training on how to mop the floors (skills which I use to this day).

I would suggest that calling this a “training experience” is probably a bit of a stretch.  While many of the participants likely learned a lot of tips from the few hours they had in the store, we know that mastery comes from experience.  Only by making 10 or 20 espressos, and having coaching from an expert can someone truly become an expert.  And with all the complex beverages available at the Starbucks locations, employees need ongoing support through job aids and practice to make sure they have experience crafting the Starbucks product.  Remember, each cup of coffee is a customer’s personal cup — so employees must not only understand how to build the “standard product” but how to make it “extra hot” or “extra strong” as each individual customer may request.

Such talent development takes an entire learning system.  It requires an onboarding process, a series of on-the-job training experiences, job aids, mentoring, feedback, and continuous updates.  A single 3 hour event cannot possibly do this.  If Starbucks is truly serious about building the quality of its product and in-store experience, these 2 hour events should be taking place every week (and probably after-hours).

(The Ritz-Carlton is an icon in this area.   As many of you already know, the Ritz-Carlton builds its world-class client experience through a series of training experiences, including a daily 5 minute discussion between every manager and their workgroup at the same time each day.  Starbucks could replicate such a process.)

Bottom Line:  A Great Thing

We can all learn from this program.  Such highly visible events go a long way toward building employee excitement and engagement, and they may be good marketing.   Are they really a good long term solution for talent development and management?  Only if they are done regular and in a consistent way.

I think a few blog postings, taken from the “Starbucks Gossip” blog, pretty much sum it up:

Fig 1:  Starbucks Employee Comment on 2/28/08
Fig 2:  Starbucks Manager Comment on 2/28/08
Fig 3:  Starbucks Barista Comment on 2/28/08
Fig 4:  Starbucks Employee Comment on 2/28/08
Fig 5:  Starbucks Employee Comment on 2/28/08

Bottom line:  Programs such as this can drive tremendous changes in employee engagement, excitement, and commitment.  While one should not consider them a complete training program, when integrated into a complete strategy for onboarding and continuous employee learning, they can drive tremendous value. 

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The Role of a Learning Culture in 2008

Posted on January 30, 2008. Filed under: Content Development, Enterprise Learning, Learning 2.0, Learning Programs | Tags: , , , , , , |

We recently completed a major research program which studies the elements of corporate learning which deliver the highest levels of business impact. Our findings were fascinating, providing valuable guidance for anyone in the corporate learning industry.

First, there are two types of solutions provided by corporate learning organizations. The first type, which we call “performance-driven” learning solutions, drive near-term competitive advantage. These programs help the organization with timely, urgent problems.

There are many performance-driven learning solutions in organizations; Consider a major blended learning program to assist sales and service people understand a product rollout, a coaching program to help managers understand how to deal with a business downturn or shift in employee demographics, or an e-learning program to help employees understand how to use a new IT system. These programs drive immediate and measurable impact – and their success is driven by your ability to:

  1. Clearly diagnose the problem (performance consulting)
  2. Understand the nature of the audience (needs analysis)
  3. Build interesting and engaging content (content development)
  4. Deploy and manage the program effectively (program management)
  5. Implement new technology where needed (e-learning)
  6. Measure results and find areas of improvement (measurement).

These six operational skills are critical to success in performance-driven learning, and most L&D professionals (and CLOs) realize that they must continuously work to improve and update their processes and skills in these areas. (Our research found that performance consulting, in fact, is the “highest-value” of these six, by the way.)

But there is also a second, completely different type of solution provided by corporate learning organizations. This value focuses on “long-term” competitive advantage, enabling the company to grow, adapt to change, attract and retain great people, innovate, focus, and meet customer demands. These long term strengths are not developed through “performance-driven” learning, rather they are developed through this second set of strategies, which we call “talent-driven learning” solutions.

Talent-driven learning solutions also take many forms: a multi-tier leadership development program (where almost 25% of corporate L&D dollars go) is the archetypal example of a talent-driven program. A complete sales curriculum (such as Cisco or IBM’s end-to-end sales training program, which takes place over years) is such a program. A corporate wide quality and process improvement program (such as GE’s Six-Sigma, Caterpillar’s new manufacturing process program, and Rockwell Collins process improvement program) is a talent-driven solution.

These programs, as we named them, build talent. They go far beyond the development of skills – they focus on deep-rooted competencies, behaviors, and culture. They must be integrated with career development models and performance management in order to succeed. And they take years to build and mature, demanding a long-term investment.

These talent-driven learning programs provide more intangible benefits (employee flexibility and satisfaction, engagement, innovation, retention), but far greater impact over the long term. In fact, our research found that in 2008 learning organizations are focusing very heavily in this area, driven largely by the tremendous shifts taking place in the demographics of the workforce. The development of talent-driven learning solutions causes stress: you need large capital investments, you must centralize more of your L&D resources, and you must partner far more closely with HR and talent management teams.

Interestingly, as we analyzed the data for our upcoming High Impact Learning Organization research, we found that among more than 40 different dimensions we studied, the single factor which best predicts the business impact of a learning organization is the “learning culture.”

What is a “learning culture?”

Simply explained, we define an organization’s “learning culture” as its ability and willingness to embrace individual and organizational learning as a strategic part of its business strategy. In other words, does your organization focus primarily on “results?” Or does it also embrace the strategy that the organization itself is an organism of people who must continuously develop, grow, and adapt to meet changing market conditions?

There are many ways to measure of the learning culture, and we have come up with a scorecard to help you assess your culture. For example, does your organization have a formal employee development process coupled with the performance management process? Are there formal coaching programs available for managers and leaders to help them learn how to listen and develop employee performance?

At an organizational level, does your organization embrace the idea that many new products and services will fail, and that we will “learn” from these experiences, rather than just punish the underperformers? Are there processes in place for employees to feed back suggestions and improvements? Is the organization porous and always listening to customers for new ideas and changes in the market?

At the highest level, does the organization have a history and experience with change and adaptation as markets change? Can the organization “re-learn” its business when suddenly it faces a major shift which forces it to change the nature of its products, services, and value proposition? Many high technology organizations, for example, are “one-product companies.” They fail to evolve beyond their first successful product. (Remember Informix and Ingres in the database market? People’s Express in the Airline Industry?) Others grow and prosper into powerhouses.

Your Role

The bottom line is this: a learning culture is built through a symphony of business processes – driven by the executives all the way down the organization. Your role as an L&D professional is to constantly be vigilant about the learning culture, ask questions to help others see its value, and take on the role as cheerleader to continuously improve the learning culture in each and every program. We know that an investment in this area will always pay off.

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Learning Content Management: A Real Solution for 2008

Posted on January 18, 2008. Filed under: Content Development, Enterprise Learning, Learning 2.0, LMS, LCMS | Tags: , , , , , , , , |

For many years the corporate learning market has struggled with the issue of content management.  Training programs create many forms of content:  powerpoint slides, checklists, job aids, video, audio, as well as the massive amount of content provided by e-learning, including HTML pages, Flash objects, assessments, audio, video, interactivities, blog entries, and more.

As more and more organizations adopt e-learning (both purchased and built internally), the problem of managing this content becomes bigger.  In fact, it becomes a nightmare.  Consider the problem of a telecommunications company (e.g. Verizon Wireless, a client of ours) which changes a rate plan or offers new phones.  The company must update all the online training, certification programs, job aids, checklists, price lists, performance support systems, and customer support databases.  Quite a daunting task, especially when one considers that telecommunications companies are changing plans and products almost every month.

To make matters even worse, consider the learning delivery part of the problem.  How do you make sure that a service representative, sales person, or technical engineer can find “just what they need” when they are trying to sell, service, or repair a problem?  In today’s highly networked organizations, the problem is no longer one of “training” – it is one of providing what we call “learning on-demand.”  Solutions to “learning on-demand” must draw upon a content management strategy.

Around 2002 a software category was created to solve this problem:  the “learning content management system” or LCMS.  For the first few years the providers of these systems struggled:  buyers did not know what they were, they did not understand the nature of the problem, and they were confused between the LCMS (a content management, development, and delivery system) and the LMS (a learning administration and reporting system).  We have talked with dozens of companies struggling with the problem of content management, and for the most part they use simple versioning approaches, they build their own internal tools from off-the-shelf products, and they apply a lot of manual labor.

Today, in 2008, we find that this market has now gotten big enough that real solutions exist.  As in all software markets, the pioneering software providers must sell to early adopters, and until mainstream companies start to buy, these companies struggle to stay in business.  We now see clear evidence that learning content management has become a well-known problem (almost 45% of our respondents in our 2008 High Impact Learning Organization research (to be published in Q2) feel that content management is an important initiative for 2008, and 17% of organizations feel they have strong internal learning content management skills internally.  This is a huge growth over similar data we captured over the last few years.

There is actually a real maturity model to the implementation of these solutions.  Organizations go through five distinct phases of managing learning content:  from traditional approaches (content everywhere) to a rapid-development model, to a collaborative model, enterprise-wide strategy, and finally to learning on-demand.  Our research includes many examples of each.

Learning Content Maturity Model

Figure 1:  Evolution of an Organization’s Learning Content Strategy

Recently I met with the CEO of one of the top software providers in this area.  He told me that they are now seeing continuous demand for their solutions, with companies like Kodak, the IRS, Shell Oil, State Farm, and many more now embarking on enterprise-wide learning content solutions. 

Are you ready for this type of solution?  If you are a corporate learning manager and you support a relatively large organization (1000 or more employees), you should put this on your focus area for 2008.  It is one of the top 18 best practices in High Impact Learning Organizations and it will set you up for content reuse, much faster editing and maintenance of content, and the ability to provide on-demand learning to all your employees, customers, and partners.  While the process is still not “easy,” tools and solutions from companies like EEDO, Giunti Labs, Outstart, and Xyleme are now available.  I hope that in 2008 you take the time to consider this improtant part of your learning architecture.

If you would like to learn more about this important new area, come to IMPACT 2008:  The Business of Talent® on April 22-24 in St. Petersburg Florida, our first-ever annual research conference on enterprise learning and talent management.  At that conference you will hear some of the industry leaders talk about their on-demand learning solutions and you will also have a chance to meet the CEOs of many of these software companies.

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Social Networking: Meet Corporate America

Posted on November 16, 2007. Filed under: Content Development, Enterprise Learning, HR Systems, Learning 2.0, Performance Management | Tags: , , , , |

This week I was on a panel at the Oracle Users Group discussing the needs of the multi-generational workforce.  Most of the attendees (HR and training managers) were focused on identifying what their organizations need to do to attract, manage, and integrate younger workers into their organizations.  

Our research clearly shows that the Millenia (20s) and Generation X (30s) workforce has different values and career goals than the Baby-Boomers (50s) and Silent Generation (60s+).   Some of these changes include:

  • Much more interest in finding “fulfilling” jobs, not necessarily just the highest-paying jobs, focusing on finding meaningful and interesting work
  • Feeling free to change jobs frequently, not necessarily working up the ladder in one organization
  • Working as part of a “tribe,” finding work with people you like, not just an organization you like
  • Heavy use of technology (messaging, collaboration, online learning) as a daily part of their work lives
  • Very close relationships with family, to the point where parents even evaluate employers for the workers
  • Openness and flat organizations, where peers provide coaching as much as managers.

The key questions which organizations are struggling with are:

  • How do we attract highly skilled younger workers to our organization?   What can we do to become an attractive organization to them during the recruiting process?
  • What are the values which impact younger workers and how does this affect our management and compensation processes?
  • How do we build onboarding and career development programs for younger workers, many of which will change jobs 10-15 times in their careers?
  • How do we manage senior employees who may not be as technology-savvy as younger workers?
  • How do we build online learning and other internal systems to facilitate learning and collaboration to mirror the social networking tools which young workers use in school?

We are undertaking a significant research program in this area, which will cover the impact of the multi-generational workforce on all of the talent management and enterprise learning processes.  One of the elements of this research is the use of “internal social networking” tools like Facebook for corporate America.

Where is this going?  Facebook for Corporate America.

Let me say this.  Every HR and L&D leader I have talked with in the last several months is very aware of the need to build internal social network solutions for their organization.  We can call it “Facebook meets Talent Management for Corporate America.”

Such a system has the potential to solve many problems:

  • An internal directory of employees for collaboration
  • A talent management solution to identify people for projects and new roles
  • A career planning system to help employees find new positions and opportunities
  • A learning and development solution to allow people to collaborate to solve discipline and function-specific problems (e.g. technical support, engineering, product development, customer service)
  • A system which integrates with the company’s performance management and talent management system, providing access to information such as performance ratings, career history, languages, preferences, career interests, and more.

Where are these solutions?  Well nearly every LMS and talent management systems vendor would like to have such a solution today.  Some exciting developments are coming here – and I would like to highlight a few (you can learn more about this space by coming to our Research Conference IMPACT 2008:  The Business of Talent (www.bersin.com/impact ), where we will be highlighting many of these new solutions.

New Solutions to Watch:  Mzinga, Tomoye, and Taleo

A few important companies to watch:  Today KnowledgePlanet announced their bold and exciting new rebranded company Mzinga (www.mzinga.com) – Mzinga, headed by former Lotus and Webex executives, is launching an exciting product and services-based strategy to help organizations build social networks inside of corporations. 

A second company which has been focusing in this area for some time is Tomoye (www.tomoye.com).  Tomoye has been building corporate communities of practices for several years and also has a well designed product for corporate social networks.  I expect them to pick up momentum in the year to come.

Finally, we have to mention Taleo (www.taleo.com).  Taleo’s new performance management product (Taleo Performance) is one of the most interesting “facebook-like” performance products we have seen to date.  Its innovative new user interface gives the company the option to build social networking features into the daily and annual process of employee performance management.

See More at IMPACT 2008:  The Business of Talent®

We will be featuring corporate social networking and new solutions for informal learning at our 2008 research conference IMPACT 2008:  The Business of Talent (www.bersin.com/impact).  Hold the dates on your calendar (April 22-24 in beautiful St. Petersburg, Florida) – registration will be available soon.

The Business of Talent

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