ACCOUNTABILITY


A Legend’s Look at Learning

Let’s view training as an investment versus a cost BY JACK J. PHILLIPS AND PATTI P. PHILLIPS

Jack J. Phillips is the chairman and Patti P. Phillips is president and CEO of the ROI Institute.
They can be reached at editor@CLOmedia.com.

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or almost four decades, Tom Peters has been preaching the gospel of putting people first, a message more urgent than ever in today’s rapidly changing business environment. Peters is a leading business management guru and the best-selling author of 16 books, including “In Search of Excellence,” co-authored with Robert H. Waterman Jr., which is often cited among the best business books written with more than six million copies sold.

Peters has condensed his years of teaching and consulting into a new book titled “The Excellence Dividend: Meeting the Tech Tide with Work That Wows and Jobs That Last.” A chapter is devoted to the importance of training. Peters prefers the word training instead of learning, development and preparation. His advice is particularly important as he has spent much time in the past four decades with top executives.

In this chapter, Peters underscores the importance of training and its role in an organization. He reminds us that training is critical and investments in training should be significant. For example, training investments are huge in military organizations, fire departments and police departments, where lives are at stake. In the Army, he points out, three-star generals obsess about training, while in most businesses, it’s a midlevel staff function. Sports teams, theater groups and ballet companies also focus extensively on training, he adds.

Peters poses several questions to top leaders about how training is organized and supported: Is your chief training officer your top-paid C-level job (other than CEO/COO)? If not, why not? Are your top trainers paid as much and treated as well as your top marketers or engineers? If not, why not? If you randomly stop an employee in the hall, can they describe in detail their development plan for the next 12 months? If not, why not?

Peters also makes huge bets about how executives perceive training:

  • Bet 1: Five of 10 CEOs see training as an expense rather than an investment.
  • Bet 2: Five of 10 CEOs see training as defense rather than offense.
  • Bet 3: Five of 10 CEOs see training as a necessary evil rather than a strategic opportunity.
  • Bet 4: Eight of 10 CEOs, in a 45-minute tour d’horizon of their business, would not mention training.

Training = investment No. 1. And that investment pays off almost immediately.

We would not bet against Peters. His conclusion is that training = investment No. 1. And that investment pays off almost immediately.

Unfortunately, far too many executives still see learning as a cost, not an investment. They see it as a necessary evil or something they must do because of compliance.

We know what happens when executives see learning as a cost. Like all costs, they are controlled, reduced, minimized or even eliminated. As a result, business partnerships become rare, influence diminishes, support is lost and funding is curtailed. When executives see learning as an investment, support is improved, commitment is enhanced, business partnerships flourish, and funding is maintained or enhanced.

To see learning as an investment, strategic, expensive and important programs must add business value. This pushes the evaluation of learning to the impact level with a clear connection between learning and business impact. An ROI analysis is needed for a few projects, using the same calculation that the CFO would use when investing in a capital expenditure. When this is accomplished, the mystery of learning being an investment is removed.

This seems like a daunting task for many CLOs, but it’s not if you design for the results you need using the concept of design thinking. This requires that programs begin with the end in mind (with defined business measures), the right solutions are selected to influence the business measure, and success is expected at the impact level throughout the process. All stakeholders, including designers, developers, facilitators and managers of participants, will see their role is to ensure the program delivers business value. When programs are designed to drive the business measures, they deliver results, removing the fear of a negative ROI. This is possible, and it is being done by thousands of organizations globally.