Training Industry Quarterly - Summer 2008 - (Page 13)

BEFORE YOU BUY | DOUG HARWARD NO MATTER HOW YOU RATIONALIZE AN ROI CALCULATION, IF IT’S NOT A GOOD EXPENDITURE, IT’S LIKE PUTTING LIPSTICK ON A PIG. ARE YOU SPENDING YOUR MONEY WISELY? A recent study by Training Industry, Inc. found that more than 91% of training professionals in Fortune 1000 companies feel some sort of pressure to reduce the costs of training. So you must be asking yourselves, “Are We Spending Our Money Wisely?” If you’re not asking it, then I’m sure someone else is! The need to be good fiscal managers of training services is nothing new to learning executives. But for some reason, we have not made great strides in the last couple of decades. It appears we are not gaining ground in the board rooms either: Some estimate that less than 8% of the Fortune 1000 companies have a C-level executive directly responsible for training. It doesn’t appear we are being viewed as strategic stewards or thinkers. Is it because we don’t know how to spend money wisely? Or is it because we don’t know very well what we should be spending the company’s money on? My experience as a training executive taught me that the greatest challenge in leading a training organization is making sure that the programs and initiatives you bring to the training table really drive change and improve performance. If they do, I don’t think you’d hear as much about the costs; nor would you be challenged as much to justify the initiative’s purpose. Much of the debate in the past few years has focused on how to calculate ROI or the net present value of the training program. Great stuff, but not very important if you are offering the wrong programs. A common approach by many leaders in training organizations is to create a curriculum, promote a schedule of events to employees, and based on the number of registrations (against capacity), determine whether the course is needed or not. The idea is that if enough employees are taking the course and if it gets good results from the Level 1 evals, then it must be good. But does the course have anything to do with the company’s strategic goals? No matter how you rationalize an ROI calculation, if it’s not a good expenditure for the corporation, it’s like putting lipstick on a pig. No matter how pretty it looks, it’s still a pig. To ensure you’re buying wisely, you need to do three things: Step 1: Begin conducting annual portfolio reviews. Rationalize the courses you are offering or the projects you are involved in by asking if they are aligned to corporate objectives. If you cannot clearly align the course or project to a strategic objective or initiative, then go to step 2. You should do that every time you launch a new course, but remember that needs and directions do change and course alignment can be altered. Step 2: Stop measuring success based on the amount of activity. John Wooden, the famed UCLA basketball coach, had an important philosophy; “Never confuse activity with achievement.” The purpose of training is to achieve a desired goal. If you cannot define the desired goal in an achievable and measureable way, then it’s a good chance the course is not necessary. How many times have your employees attended a course and left feeling entertained, but there was no change in their behavior or how they worked? Step 3: Start delivering training that solves business problems. The safest decision any training executive can make is to deliver training programs that correct a problem the corporation is experiencing. For example, a few years ago, a well-known beauty products company was experiencing customers not properly applying its product, resulting in low customer satisfaction and lost sales. So they created a training program delivered at the point of purchase to teach customers to apply the product. Training became a strategic part of the business, sales increased significantly, and so did customer satisfaction. If you want to be viewed as a great fiscal manager for training, and viewed as a strategic player in the company, stop doing the wrong stuff and start doing the right stuff! Doug Harward is CEO of Training Industry, Inc., and a former learning leader in the high-tech industry. E-mail Doug at dharward@trainingindustry.com 13 Training Industry Quarterly, Summer 2008 / A Training Industry, Inc. ezine / www.trainingindustry.com/TIQ http://www.trainingindustry.com/TIQ

Table of Contents Feed for the Digital Edition of Training Industry Quarterly - Summer 2008

Training Industry Quarterly - Summer 2008 At the Editor’s Desk Contents Ezine Email Winning Organizations Through People Before You Buy… Learning Technologies Games & Simulations: Playing to Learn Designing Learning Simulations: Strategies for Leveraging Failure Business Impact 101: The Value of Learning Strategic Alignment: Transforming the Business of Training Meet David DeFilippo Meet Krys Moskal Meet Vince Eugenio Dealing with Death: Learning’s Most Sensitive Lessons Closing Arguments

Training Industry Quarterly - Summer 2008

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