Chief Learning Officer - January 2009 - (Page 20) Learning in a Tough Economy BY MARC SOKOL Although there seems to be no shortage of bad news in the business world these days, there is a bright spot for learning leaders: Economic downturns often present opportunities to make learning more effective, thereby making organizations more competitive. end up damaging the differentiators responsible for competitive advantage. Planning to Outlive a Recession Development is a key factor in ensuring people stay engaged in the organization and continue to have an impact on the company’s bottom line. Giving current and potential leaders the development they need helps a company weather the storm and continue to excel. So how can necessary cuts be made with minimal long-term damage? What can be cut, and what should remain? To guide the decision-making process, company leaders should sit down with line managers and talent professionals to examine the key factors to business success and which training and development initiatives enhance these factors. Smart companies proceed strategically so that reduced learning and development spending won’t blunt long-term corporate success. Look at Talent Management as a Response to Economic Downturn Don’t spread reduced training dollars as if they were peanut butter and you were trying to make 10 sandwiches with only enough available for five. Such a nonstrategic approach simply reduces effectiveness across the board — including in the areas responsible for a firm’s competitive advantages. Instead, choose more carefully who you need to invest in and which types of behavior you need to impact. This means you have to determine which offerings have the most immediate and direct effect on the business and on customer experience. It also may mean you have to be more selective about who is invited to participate. hen the economy slows, corporations are forced to respond. It’s a simple financial matter: Less money coming in means less money available to spend. Common fiscal belttightening techniques include budget cuts, spending and hiring freezes, and reducing the size of the employment base through buyouts, attrition or layoffs. As organizational leaders weigh tough decisions on where to cut costs, DID YOU KNOW? they should ask themselves one simple The National Bureau question: “Do we still want to be in of Economic Research business after the downturn?” If the andefines a recession as swer is “yes,” one area in which spending “a significant decline should not be cut without some serious in economic activity strategic thought is employee learning spread across the econand development. omy, lasting more than True, adjustments may be needed. a few months, normally The learning and development departvisible in real GDP, real ment probably should reduce spending income, employment, injust like everyone else. Instead of cutting dustrial production and all initiatives in equal fashion, smart wholesale-retail sales.” organizations retain initiatives that are Source: www.nber.org critical to business success and cut back on those that may simply be “nice to do.” Think of it this way: It wouldn’t be prudent for a restaurant kitchen to eliminate fire extinguishers to save costs in lean times, would it? Canceling an arbitrary portion of training initiatives across the board creates the illusion of savings — some real via eliminated travel expenses and some potential under the assumption that freed-up staff time is put to good use. But without strategic thinking about where cuts should be made, such moves could 20 Chief Learning Officer • January 2009 • www.clomedia.com W http://www.nber.org http://www.clomedia.com
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