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Finally! Meaningful Training Measures

Written by: Arupa Tesolin

Article Overview: Training consultant Arupa Tesolin shows how meaningful training metrics link to business performance outcomes.

Finally! Meaningful Training Measures

Copyright May 12, 2005

Just a few short years ago trainers and their managers were still lamenting the absence of meaningful ways to measure the value of training. Many long and detailed studies were produced. Most of them required an intense effort to prove a direct link from training programs to outcomes. Those efforts were usually tied to proving the value of internal training departments which, at the time, didn’t have enough of a business linkage in the value chain and pecking order of a company. Training was the typical first budget cut of the old accounting management regime. Internal training departments, in the face of technology investments and cheaper out-sourcing, were trying to make a case for their own existence.

Almost overnight it seems that things have changed, at least in ideas and approach. Operationalizing them in most cases is still ahead. It has become the work of the hour.
Companies are now budgeting for training again.

What did it take? Quite simply a column shift. Training was an expense. Now it is an asset, a human capital investment. After that, we shift from the ambiguous term performance to the concept of proficiency. In accounting terms proficiency means what does an average performer generate, sales $, time, business results, not necessarily the same for each position set. When proficiency is below that, there are measures, day-by-day that add up to a lot of time, potential losses or gains, and high value output. Now this is measurable easily. The bottom line becomes “What is the cost of training versus the cost of not training?” On the business value side of the equation the latter is typically more expensive and definable.

The “cure”, as a form of training, is highly variable and can often be more economical than we thought given the realm of time and training options to choose from. So there is the opportunity for a double magnum increase at the cost level and again in determining the right cure. No longer is a company developed classroom curriculum the solution. It could be a simple 8-hours of cross-training, a short presentation, blended learning with classroom and e-learning components, combined with a new policy, follow-up supervision and interim coaching. Of the cost, maybe 50% is built into the business as operations activity. The rest is likely a savings of 60-80% over the typically classroom developed program. The result is more precision, more direct knowledge transfer, and more impact.

Thinking back to when Canada was in a manufacturing economy in the 80’s I am reminded of the “time-study guys”, as the industrial engineers of the day were called. Every production change, every slowdown or as a scheduled operational review in large manufacturing operations, they would look for ways to cut production time, paring down repetitive work tasks to the minimum number seconds, screws, reducing the processes, introducing new tools and so on. It seems we are moving now towards the same thing but with a knowledge economy or even an integrated manufacturing/knowledge economy as a hybrid facsimile.

But there are huge differences. Yesterday’s production was mechanical and fairly predictable. Today’s operations environment is complex. It involves mental fluidity, information manipulation, management processes and support, staff skills capabilities, individual motivation and attitude, gratification, reward, interpersonal, and creative opportunity. Even task loading and staffing levels go into the mixture.

Though our work is still ahead of us, there are several companies leading the way who can teach us a lot by their example. Here are some. Source is Training Magazine, Top 100 North American companies. For more visit www.trainingmag.com, March 2005 issue.

IBM (IT) – created a learning program for their “major deal makers” pursuing contracts from $100 M to $5 B. Program focused on selecting deals, increasing win rates, profitability and customer satisfaction. Result: $799 M in new deals and 2B increase in existing deals.

Sprint Corp. (tel-com) – Started leaders program for better retention practices.
Result: Improved customer satisfaction and one-call resolution rates, up to 40% reduction in staff turnover.

Lockheed Martin (aerospace/defense) – After astronautics business experienced frequent mishaps on flight hardware, they created a 6-month error-prevention training program for employees. Result: 67% error reduction.

Ritz-Carlton Hotel Co. (hospitality/service) - Established a School of Excellence for external customers who want to benchmark R-C’s practices. Result: Generates $1.5 M in revenue which offsets internal training costs for employees.

General Mills (food manufacturing) – Rolled out 1-day train-the-trainer sessions and new safety training materials on hand safety. Result: Serious hand injuries reduced 80%.

Ohio Savings Bank (banking) – Reduced a Customer Service Training course from 70 classroom hours to 47 with 23 hours of self-study. Results: 3 days of saved class time allowed bank to serve 1,162 more customers.

BMO Financial (banking, Canadian) – Measures diversity progress and workplace equity since 1992. Result: 9% increase in number of female executives, 13% increase in female senior manager positions.

Wyeth Pharmaceuticals (pharmaceutical) – When ad agency budgets spiraled they trained product team members in best practices for ad agency management. Result: $77 million in savings.

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Article Tags: accounting management, accounting terms, bottom line, business results, business value, column shift, double magnum, existence, few short years, human capital investment, intense effort, linkage, losses, management regime, proficiency, technology investments, term performance, time business, training departments, value chain



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