Learn from the pros. Stats matter and finding the ones that matter to your company is key.
The results of the new SEC reporting requirements are starting to appear on company reports and they “meet expectations”. As many managers will attest this rating covers the entire range of performance from “best of the rest” down to “not great, but not bad enough to replace.” I had low expectations so well done public companies.
Last Autumn the Zooms were flickering with talking heads (mine included) talking about how this new reporting requirement was a huge opportunity to raise the profile of L&D. Executive conversation based on data in every hallway. New standards and scorecards were sure to spread like wildfire. And then…not so much. The regulation was meant to evolve over time with reporting norms coming from the companies. So it will. But it will take time.
So what is a learning leader to do in the meantime? CLO’s need to talk data. The organization must be shown that in and numbers L&D has something to add to the story being told every quarter. how learning is scaling to develop new leaders in support of growth. How development is a tool for attracting the best and brightest. How L&D will help the company win.
When it comes to talking data I like to look at professional sports. I never played sports and while I enjoy them I think I look at them differently then some. As a learning geek, sports have everything to love: people dynamics, skills, strategy, performance targets, and unlike the business world a ton of data and a short feedback cycle. Make a change this week see the results on the weekend. Fully transparent performance reviews with comprehensive analytics every week. What is not to love?
And within this world of public performance how is a team contributor )let’s call then L&D) to set themselves apart, especially at contract time? The team’s star (let’s call them sales) can focus on titles, wins and other team accomplishments. But how does the center back (footballer) or left tackle (American footballer) stand out? Data.
In baseball the batting average (# hits/ # at-bats) is a classic sporting statistic. For decades it was seen at the gauge of a batter’s prowess. Then someone (I assume a player’s agent) asked the question, “but can they hit when it counts?” and so was born the slugging percentage. This is now a common stat representing how well the player bats with runners in scoring position. It is a stat in a context that matters. And there are lots of them used all you need to do is watch a game/match/event. Some sports broadcasters forget the “that matters” parts as they list a player’s exceptionally high batting percentage, against left handed pitchers (relevant), on Thursdays in June (maybe relevant but doesn’t matter).
So why not forget the “days of learning per employee” stat and talk about “days delivered in support of new product launches” to show how critical L&D is to new revenue? Or “delivered within 30 days of needs identification” to show responsiveness. Or “% of offerings that are new or refreshed every quarter/year” to show vitality of product set. These stats are powerful differentiators, specific to your business and your L&D organization’s value proposition. Best of all they are great conversation starters.
So what is your slugging percentage?
The new business context requires L&D organizations to experiment, innovate and transform. However, this requires trying out new ways of structuring the learning organization, designing learning products, delivering learning and partnering with business. Often, L&D leaders shy away from introducing these big, bold new ideas. The key obstacle is that many mature organizations treat failure as a weakness. However, successful startups have adopted a different point of view. For them, failure is nothing more than an evidence based correction to an assumption- better to know sooner, rather than later.
Too often, L&D’s limited resources are misspent. As Peter Drucker has been quoted as saying, “There is nothing so useless as doing efficiently that which should not be done at all.” It is from this perspective that failure becomes a virtue. None of us likes to fail. Nevertheless, in the context of operating successfully in today’s business environment, not only is failure acceptable… it is required.
“Fail often. So, you can succeed sooner.”
– Tom Kelley, Ideo partner
Let us begin by acknowledging that experiments can be difficult in a large company. Unlike startups there is often little ability to take a let’s-try-some- things-and-see-what-sticks attitude. This can challenge any organization tasked with innovating within an established company. In times to come, we are hopeful that this limiting factor will lessen as more companies, of all sizes, recognize the need for increased innovation in all aspects of the business.
However, for now, L&D organizations in mature companies may continue to relate to failure with fear. Having worked so hard to build credibility, L&D leaders might consider failure as a step backwards. I strongly recommend that L&D leaders change their perspective on failure. By properly recognizing failures, L&D’s successes become even more powerful in generating executive, manager, and learner buy-in. Two keys to this are turning failures into learnings and being transparent.
When Viewed in the Right Light…
Steve Blank is a retired serial entrepreneur now teaching entrepreneurship at UC Berkeley, Stanford, and Columbia. He has studied what he calls the stages of startup failure.
Stage 1: Shock and Surprise
Stage 2: Denial
Stage 3: Anger and Blame
Stage 4: Depression
Stage 5: Acceptance
Stage 6: Insight and Change
While failure for L&D is rarely as final as it is for startups, the stages remain relevant, and both startups and L&D must push to achieve stage 6 as quickly as possible. What others refer to as a ‘failure’ is better described as a ‘major lesson.’ This lesson is one that can only be learned by trying. L&D must turn its failures into learnings. This is the only way by which the odds of delivering unmistakable value next time improve. According to Nick Casado, a computer networking star who sold his startup for over a billion dollars, the true skill is “to learn to embrace failure — not only embrace failure, get good at it, and by that, I mean get back up, apply what you’ve learned, and hit reset.”
Show Your Scars
The final principle of handling failures well is to be transparent. This transparency extends to the L&D team, stakeholders, and even other learning professionals. For startups, this sharing of ‘major lessons’ has become part of the culture. CB Insights, a research firm “that helps corporations guess less and win more” has amassed and shared over 200 startups’ “post mortems” in the hope that startups in the future will make new mistakes, not repeat old ones.
L&D conferences are full of best practice case studies and chest thumping showcases. L&D leaders must participate in these conferences, not just to listen to others’ successes, but also to fearlessly acknowledge their own failures. How about seminars on “10 ways I screwed up our roll out” or “3 easy ways for upsetting your executive sponsor”.
The role of the CLO in 2021 looks a lot like a startup founder.
“Will the founder always strive to do great work that is legendary, with people who are spectacularly awesome? Will this commitment translate to recruiting amazing people who want to work with the founder and each other? Have you ever been in a situation where you and a team were pursuing total excellence? A great founder will not just seek this or hope for this, he or she will demand this.”
– Mike Maples, Founding Partner at Floodgate, Investor in Twitter, Lyft, Sonos….
Today’s companies are being transformed by multiple disruptions: technology, digitization, volatility, diminishing geographic boundaries, tougher competition, more demanding customers, and skill shortages. These disruptions are mandating new approaches to all aspects of business.
As businesses battle these disruptions, L&D organizations need to go through their own transformation. A transformation that enables them to create unmistakable value for their companies. This transformation is more than just a step change. It will require L&D organizations to think afresh and recalibrate their teams, products & services, value proposition, execution model and stakeholder communication.
Just as the success of a startup is reliant on its founder, the success of the transformation of L&D depends on its leaders acknowledging the need for transformation and then taking on the role as founders of the new L&D.
Chief Learning Officer 2.0
In 1991, when Jack Welch made Steve Kerr GE’s (and possibly the world’s first) Chief Learning Officer, the business world and the world of learning looked very different. A quarter of a century later, it is time to take a fresh look at the position and the key role it plays in ensuring that learning is running at maximum efficiency and effectiveness. There are three primary roles for a founder of a startup that should be the focus for the CLO as well. These are; define and keep the vision & value proposition, attract and retain the best talent for their team, and grow the investment.
With a focus on these three critical roles, leading CLO’s will have a fighting chance in these rapidly changing times. (more to come…)
Experimentation is a fundamental activity for startups. Startups are leaping into a great unknown. Does anybody want to use my product? Will anybody pay for my product? How are we going to build this product? Startups are a pile of assumptions.
The goal of successful startups is to, as quickly as possible, prove or disprove assumptions and turn them into facts. They do this through experiments. In addition to the value of turning assumptions into facts, experiments are also key to effectively managing resources. They can help minimize the risk of investing too many resources into a product whose need or value has not been validated.
Experiments are simply a formal process for data collection. Why formal? Without the formality, experiments often produce less data, the wrong data, or even worse, no actionable data! When thinking about an experiment, startups must be able to clearly answer the following questions:
What we believe (our assumption).
What we will do to verify our assumption (our actions).
What we will measure (our metrics).
What our measurement results need to be if we are right (our expectations).
Nothing is perfect and innovation only comes from new experiments. With so much newness occurring every day, if L&D is not allowed to conduct some experiments of its own it will be forever behind the needs of its customers. Experiments, by definition, have an unknown outcome. Therefore, while L&D can’t know the outcome, it must know the parameters of the experiment and be able to work with the business to set the proper expectations. These expectations must be understood to get the most out of every experiment.
With a mutual understanding of the goals, structure, anticipated return and resources requirements, an experiment’s business sponsor can make a reasoned decision regarding participation in the experiment. Setting expectations is about knowing the risk and understanding that the potential reward is critical for experiments to be accepted in organizations unfamiliar with risk-taking.
For L&D, experiments can be used on any number of aspects of their organization. Content is the obvious one. I also believe that those organizations that adopt this approach in areas like process and people will see great return.
I recognize that a scientific approach can only take you so far. There are many factors that could influence the results of an experiment and there is not enough time or resources to prove everything. However, experimental results filtered through the experience and knowledge of the L&D organization can greatly increase the confidence level in any decision.
Adopting experimentation as a key activity for your organizations can be difficult, even for startups. Some try it and quickly abandon the process because the experiment didn’t work out the way they anticipated. That is exactly the point.
Let’s recap. Experiments have unknown outcomes. For organizations, this can become a barrier to adoption. When the results are confirming of assumptions the results are easy to accept. When the experiment’s results challenge or even run contrary to an organization’s assumption, the impulse may be to discredit or rationalize them away. And when the contrarian results come as part of your first experiment, it can drain the energy for additional experiments.
Experiments are best committed to in bunches, not singularly. This reduces the possibility that a lone experiment can sap the enthusiasm for adopting an experimental mindset. Confirming results builds confidence by proving that a project or initiative is on the right path. Contrarian results may reduce that confidence. It is important to see that both are positive results. The conversion of a core assumption into an evidence-based fact is the goal.
If an organization collects nothing but confirming results, they are likely testing the wrong things. If you already know the answer, don’t waste precious resources asking the question.
Thoughts on a learning product’s lifecycle.
There is a reason that we use the term lifecycle when describing products. Products die. It happens to all companies. Startups that have launched a new product only to find that it does not deliver enough value to attract a user base generally run out of funding and are quietly forgotten. While the company may no longer exist, the product, be it an app or a web service, may remain. You can see examples of this reality every day. Look in the app store for your phone. If you see an app that has had no updates in the last 12 months, it is highly likely that the company behind it has closed.
In December of 2017, AOL announced that it was shutting down its messaging service AIM. At that time, many still loved, AIM, a twenty-year-old remnant of the first dot-com era. It is estimated to still have had millions of users at the time of the shutdown. So why shut down? Because there is a cost to keep the service running and as AOL stated in its announcement of the decision, “We’re more excited than ever to focus on building the next generation of iconic brands and life-changing products.” Focus. In an age of Facebook, Snapchat and Slack, there was little opportunity for AIM to deliver huge value to its users. Instead, AOL is investing those resources towards products that can.
Some products do not die, they are updated but unlike an app, where one version automagically replaces the prior, the older version remains. Software as a Service (SaaS) companies like Cornerstone, Salesforce and others release updated versions of their software all the time. The newer version is meant to replace the client’s older version. However, change is hard and many clients do not upgrade to the latest release. Upgrades can be fraught with unexpected pitfalls and the older version is familiar and therefore easier for the client to support with its internal users.
This means that SaaS companies are usually providing client support across several releases. This draws resources away from building value into future releases and instead requires investment in supporting the waning value of the past releases. Familiarity with legacy solutions is a challenge for L&D as well.
Getting the business sponsors and managers to accept a new solution to replace an older one can take some work. L&D must be prepared to help them see the value. L&D organizations, like all organizations, must always seek to invest their limited resources in areas that will yield the highest return. When a product either fails to deliver a predetermined value threshold, or is superseded by a higher value-adding product serving the same need, it must be retired. Like AOL, L&D must recognize that focusing resources on upgrades for a diminishing user need is a distraction and that continued support for an existing product has costs.
For L&D to adopt a true product approach it must acknowledge the dynamic nature of all solutions, continuously assess the value of its solutions, and acknowledge when a solution needs to be retired or upgraded. This requires the support of the business sponsors as well as the awareness that the “more” is not the goal. As in many activities it is not the creation but the editing that often drives significant value.
Note: I write this fully aware that in my enthusiasm I often share unedited thoughts in these posts. Unfiltered ideas are a feature not a bug for my product (I hope) – j.
Today’s business world is moving faster than ever. A years ago, some of my former colleagues at The Forum Corporation released a book titled “Strategic Speed”. In the book, authors Boswell, Davis and Frechette highlight the need to focus on people in addition to process efficiency and systems. They went on to highlight what they see as the essential people factors for driving speed; clarity, unity and agility. Startups have adopted a similar strategy to driving increases in speed.
Startups always seek to increase speed to user. How can they get more people to experience the product? What channels and messaging are resulting in new user acquisition? In order to impact this dimension, I believe the mind-set of L&D needs to change from manufacturer to marketer. One look at attendance data will show you that the most attended trainings are frequently mandated, not sold, to their audience. Assuming that learning is solving a real problem, getting users to recognize and “buy” the solution quickly is critical. Running Training Like a Business 2.0 means L&D must become marketers and packagers of a truly performance-inducing product. Like Gatorade™ for employee performance.
When I first starting exploring the idea of Speed to Learner as an important dimension of organizational speed, I explained that L&D needed to shift from manufacturer to marketer. But what does this mean? L&D needs to speak, target users, and think, like a startup. While launching a new learning offering can be nerve racking, imagine the stress entailed with launching your new company. The stakes are high for startups. While building a great product is essential to a startup, your target market must still know about it…and use it.
If you sell anything with any success, you know that people don’t buy drills, which is a product feature, they buy holes, the product’s benefits. So why is the communication and language around learning so feature based. The industry speaks of “sales training” not “close more deals, make more commissions training”. Course objectives are often written, “at the end of this course you will be able to…” when the important part is found by adding “so that…” to the end. L&D should lead with benefits. L&D should know what the benefits are for learners and clearly state them in terms that the learner can recognize. For a startup or L&D, this is where all valuable products begin, with a true need.
Consumer advertising gets a bad name because many assume that sizzle replaces the need for a high quality steak. Many startups feel the same way. You haven’t heard about those startups because they very often fail. Winning solely on the basis of a superior product may feel like the high ground but what is missed is that in an age when we are all bombarded with messages every day, cutting through that noise with the benefits of your solution is also needed.
After adopting a marketer mindset the next step to improving speed to learner is for L&D to understand the road to audience adoption. Startups understand that they can’t get everyone right away. Instead they focus on a part of their addressable market called the early adopters. In his 1991 book “Crossing Chasm”, Geoffrey Moore described an approach of looking at the way new technologies are adopted by a market that is still used today.
In the book, he divided the market, represented by a bell curve, into five parts. From the thin left edge, he began with innovators. Moving right he identified the market parts as; early adopters, early majority, late majority and laggards. Each part has its own requirements for the adoption of new technology. Innovators value new over perfect, while the early majority requires proof points, value being delivered in situations that look like theirs, in order to embrace the new technology. “Technology” is from the Greek “tekhnologia” which means the systematic treatment of an art, craft, or technique. Sounds like a learning offering, doesn’t it?
Geoffrey Moore, Crossing the Chasm
When L&D rolls out a new initiative there is often too little thought given to how it should be rolled out. What parts of the desired audience like new but untested and potentially imperfect solutions? Which parts will require proof points or endorsements? A blanket approach rarely works with anything other than compliance training where attendance can be mandated. Understanding more about your audience’s requirements for adoption can make for a much more rapid and successful roll out.
Compilation of my thoughts on the SEC opportunity.
I have written a lot about the new legislation for Human Capital reporting. It is refreshing to be on a topic that stirs some valuable discussion and debate. Wish that there was more of it on issues like design, the L&D organization optimization and such. Had we been a more challenging industry maybe learning styles would have been debunked a long time ago.
For my own learning I did a quite reprise of my thoughts on this topic.
What Is the Securities Exchange Act of 1934?
The Securities Exchange Act of 1934 (SEA) was created to govern securities transactions on the secondary market, after issue, ensuring greater financial transparency and accuracy and less fraud or manipulation. (Investopedia)
Transparency and accuracy. Is L&D ready for this? It doesn’t matter. Here it comes. Tail Will Wag the Dog post
A reading of the final regulation is a celebration of bureaucracy but in addition to adding “principle-based” and “materiality” to the L&D mainstream lexicon it also included some odd issues with words.
Opposed defining the term “human capital.” Well since it is not a critical term we will let that slide. WTF?
In any case I see this as huge opportunity to get our boss’ boss’ boss interested.
But with visibility comes accountability. Are today’s learning leaders ready for that?
I am excited to see how various Learning leaders use this new bit of leverage. This could be a big breakthrough for L&D, repositioning the function (appropriately) as mission critical. Or not.
The Next Frontier
Reporting drives the elevation of L&D from the side of “tell me what you do.” The next big shift will come from the accounting side. By changing the way that companies account for human capital spend the current investment per employee can be dwarfed. By making certain investments in human capital treatable as an asset those costs can be off set by an increase in asset value. Moving learning from a income sheet item (SG&A) to a balance sheet item to be depreciated over the usable life of that asset (average tenure?) is a game changer. It paves the way for huge investments in human capital.
Lots to come on this front for sure but here are some opening thoughts.
The current perception of L&D is captured in a report by American Progress bemoaning the way that the training investment is currently reported.
“not on its own but lumped into selling, general, and administrative expenses, or SG&A, a measure that includes items such as company lunches and paper clips.”
Agreed. They go on to stand up for L&D by showing the problem with this approach.
“Companies’ expenditures on worker training and skills show up not as a valuable investment similar to R&D but as an increase in general overhead, a measure that managers have shown a proclivity for cutting and whose reduction is often cheered by investors.”
They then end it with what I think was meant to be a compliment.
“This treatment of human capital ignores the findings of numerous studies:”
wait for it…
”Investments in human capital enhance productivity and are more valuable to a firm than general overhead expenses.”
L&D is a better use of a dollar than buying paper clips. Stop all the ROI studies. We have our answer. Maybe we should start doing PSA’s that proclaim, “for the cost of just one executive expense account we can train an entire salesforce for that expansion region.” Or, “if everyone would just print out only the documents they needed we could save enough in paper supplies to onboard 1000 new hires.” L&D has a lot of work to do. Time to get to it.