Chief Learning Officer- September 2008

IN PRACTICE BUSINESS IMPACT ANALYSIS AT CHRYSLER F ew industries in the American economy are under as much pressure as the auto industry. Under the assault of higher fuel prices, new global competitors and rapid market changes, every American automotive company is challenged to ﬁnd new approaches to serve customers. Innovation is the key to success, and such innovation is taking place at Chrysler Academy, the company’s retail training organization. For years, many in the auto industry believed the manufacturer’s role in training dealership sales personnel should focus on product knowledge. Skills training was considered the domain of the dealer. Yet, based on internal and independent surveys, it appeared some dealers were not getting the job done. Chrysler Academy was teaching product knowledge. Fred DePerez, senior manager for sales and product training at the Chrysler Academy, concluded that there was an opportunity to provide additional training. Based upon that belief, he became the champion for the innovation. DePerez faced two challenges: 1. To convince Chrysler corporate management that an investment in skills training by the company had signiﬁcant potential to increase sales. 2. To build a curriculum that could be proven to deliver the skills needed to increase sales. The investment case had to be based on data to convince others the academy should tackle this previously taboo discipline of “skills.” The approach was to collaborate with Chrysler’s training partners from BBDO Detroit’s Retail Performance Solutions group. The ﬁrst step was to conduct an in-depth task analysis with top-performing sales consultants. This resulted in a retail performance map and gap analysis that deﬁned the areas of highest training need. Several key selling skills were among the largest gaps. The research led to two key goals: 1. Design a Chrysler Academy sales consultant skills training curriculum with priority on the largest gaps. 2. Measure the impact of the new curriculum on two key performance indicators (KPIs): vehicle sales and salesconsultant retention. With the data from the gap analysis in hand, the academy was able to convince senior management to make the required investments in skills training. The ultimate proof, though, would be to deﬁnitively show improvement in the KPIs and to be able to claim the improvement was the direct result of the academy training — and not the result of the many other factors that inﬂuence vehicle sales. To answer the business-impact question, the analysis had to go beyond traditional measurements. In late 2007, the research team was expanded to include Capital Analytics and Bellevue University. A statistically based experiment was designed to include approximately 33,800 consultants (8,500 fully trained, 11,600 partially trained and 13,700 untrained who served as the control group). In all, more than 40 models were tested. By comparing the performance of the trained groups before and after training against the untrained control group, the data documented the business impact of the new training. Sales consultant training improved unit sales volume: 1. Fully trained consultants saw an average sales gain of 15.6 vehicles annually over untrained consultants and 12.2 vehicles annually for partially trained consultants. 2. Consultants who participated in prior training but not in the new curriculum saw a decrease in unit sales. Sales consultant training also improved retention: 1. Retention among fully trained consultants was 98.9 percent during the study period compared to 47.8 percent for untrained consultants. 2. Retention of fully trained new hires was 97.9 percent, while it sank to 38.3 percent for untrained new hires. With the statistically defensible business outcome measurements, Chrysler Academy continues to innovate in curriculum development. Equally important, the hard evidence is working to convince independent dealers their investment in the new sales consultant curriculum is worth their time and capital. – Michael E. Echols from organization to organization is in the prioritization of the items on the list. If the measurements are taking place, what is missing in the linkage of these outcomes to learning interventions? The ﬁrst thing that must happen is to get senior operating management to agree on the value of changes in the desired outcomes. Revenue is easy. A $1 increase in revenue is valued at $1. While we are on the easiest outcome to measure value, let’s introduce the contentious issue, namely the ﬁnance manager’s pushback in some form of this 48 Chief Learning Ofﬁcer • September 2008 • www.clomedia.com question: “How do you know the $1 increase in revenue resulted from your learning program and not something else?” We will return to this linkage issue in a moment. In the meantime, let’s discuss the missing part of the executive’s outcome list: retention. The issue is not whether the business measures retention. Almost every organization does, and if it doesn’t, it should be in the face of the inevitable retirement of the baby boomers. The issue in retention is management alignment around the value of http://www.clomedia.com

Table of Contents Feed for the Digital Edition of Chief Learning Officer- September 2008

Chief Learning Officer Editor’s Letter Contents Connections Imperatives Selling Up, Selling Down Strategies Take Five Lifestyle Learning: Improve the Bottom Line With Behavioral Education Tracom’s Social Style Model CLO Profile IOL: Determining the Impact of Learning Communicating With the Boss About Impact Mission Accomplished? Measuring Success of Corporate Universities Borrowing Measurement Practices From Investors Value Creation With Human Capital Investment Business Impact Analysis at Chrysler Learning or Performance Enhancement: Which Is It? Best Practices in Global Project Management Training Case Study Business Intelligence Advertisers’ Index Editorial Resources In Conclusion

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