Episode Transcript
Speaker 1 00:00:03 Hey everyone today, I want to talk to you about a really exciting announcement. Our new research on corporate training growth in the flow of work. And the history of this for me is more than 20 years of studying the corporate training market. The very first study I did on this was in 2004, it was called the high impact learning organization. And we spent a lot of time understanding the organization and governance, the technologies, the practices, the, the organizational models, the skills needed to build a great training function. And as many of you know, who've been following me at the time, back in the early two thousands, the focus was on eLearning, online learning technology, learning, digital learning, and creating a learning infrastructure of tools so that employees could get access to the education and training and content they needed to do their jobs well. And as most of you know, in the last decade, that was about learning management systems and content management systems and content development.
Speaker 1 00:01:06 And that continues to be a big, big issue and, and important, but it has now become really almost commoditized in the sense that you can buy off the shelf, learning technologies like that, and lots and lots of content libraries, and you can turn them on and they will have some impact on your organization, but they won't have the impact you want because the bar has been raised and what's happened in the last five years, of course is massive increases in mobility, inside companies and across companies to some degree created by the pandemic, the whole advent of hybrid work and the unprecedented acceleration of industry transformation that is forcing every company to not only be good at digital skills or technology skills, but to actually learn about an adjacent industry that they may not understand. This is Walmart getting into healthcare, Chevron, getting into hydrogen Ford, getting into electric vehicles, banks, getting into crypto.
Speaker 1 00:02:03 These aren't just technical skills. These are new domains, these are new business areas. And so what corporate training departments are saddled with is the never ending need to do onboarding and leadership development and technical skills, training and compliance, but much, much more to plot the future of this skills cap and capabilities that the company needs to continue to innovate and differentiate itself and evolve into this new area. And that means it's all about growth. And what we basically found in the research is that all of the core capabilities of L and D continue to be important, many of which you know a lot about, but these new capabilities in growth are the differentiators. Now, let me explain how this research works, what we've done. This is the sixth time I've done this. It's been a labor of love. Every single time is we send out a massive survey to several thousand companies and we ask them all sorts of disciplines about their corporate training and HR practices.
Speaker 1 00:03:01 And we know a lot about learning. So, you know, a lot to what to ask this includes program skills, priorities, organizational models, their general budgeting, how much money they're spending, all sorts of things like that. We get all that data back and we correlate the findings against three types of business outcomes, financial returns, how profitable and how fast is the company growing human capital returns? What is the company's Glassdoor rating? What is the company's retention rate and levels of engagement and then growth in innovation? Is this a company that believes they are leading their market or following in their market and what we basically find as we find in all of our studies, that there are a set of small number of practices out of the a hundred or so that we study that really differentiate these high performing companies. And in this particular case, it's exactly what I was saying.
Speaker 1 00:03:50 It's all about growth, career development, career pathways, identifying adjacent skills. So if I'm a salesperson, I can move into marketing. If I'm a marketing person, I can move into sales. If I'm doing work on fossil fuels, I can move into hydrogen. If I'm an electrical engineer, I can move into electrical vehicles. If I'm a customer service agent, I can become a patient care specialist. And then later become a nurse. If I'm a nurse, I can become a nursing supervisor or maybe work and radiology. Those are what we call pathways career pathways. It isn't the traditional career path, you know, for most of you or my age, you know what these career paths were, they were locked in stone and you were forced to wait your turn to move up the career pyramid year by year, or maybe every two to three years or longer. Well, companies don't work that way anymore.
Speaker 1 00:04:39 Things happen too fast. We need people to work on cross functional projects. Now not two years from now and workers, employees won't wait around. In fact, the urgency of this problem is the retention rate. As most of you know, almost a third of the workforce has voluntarily decided to leave their company this year. That is an unprecedented quit rate. And some new research by McKinsey actually discovered that of those people leaving one job to go to another 65% of them are changing industries. So they are taking whatever skills they have and they are saying audios to you. I'm gonna go do something that's more fun or more interesting or more developmental for me. And if you can't provide that kind of opportunity inside your company, not only are you underperforming as a business, but I guarantee you, your retention rate is suffering. In fact, I just had a really interesting conversation on this last week, the head of HR of one of the fastest growing tech companies in the market.
Speaker 1 00:05:41 I won't mention who they are. They are headquartered in San Diego. They have 1800 employees. They're planning on hiring a thousand employees over the next two years. And she told me that their turnover rate was 24%. And this is a great company. And I asked her, why are all those people leaving? She said, you know, I don't really know. I can't even tell, but they don't have a lot of career development. They don't have growth plans. They don't have internal marketplace. They don't have skills, taxonomy stuff yet they're too small. And you can see that they're suffering as a result of that. Now the context for this of course is this is not a new idea. You guys know this, everybody in HR knows we need to give people developmental plans and developmental opportunities. But what the research shows is that this is a very immature area of corporate training.
Speaker 1 00:06:28 And in fact, I sort of feel like we need to retitle the job from the chief learning officer to the chief growth officer, because ultimately, if people are not growing, what is the point in learning? Yeah, it does make you better at your job and, you know, reduce the number of errors and so forth. That's all important. But from the standpoint of the employee in the organization, if we're not getting growth out of it, we're not focused on the right things. And here's one way to think about it. And I've been thinking about this a lot. As we prepare to launch this, there's really four stages to impact in the corporate training function. The first is the learning itself. We need it for compliance reasons. We need it for onboarding reasons. We need it for supervisory skills and so forth. That leads to skills. So you have a skills, taxonomy, you have a skills model.
Speaker 1 00:07:17 You have a bunch of skills based programs. So people can develop some skills that you tell them, or they believe are important in their jobs. And by the way, you don't need 20,000 of those. You need a small set of those that you decide are important, but those skills are no good. If you can't apply them. If you don't have context around them, if you don't have wisdom on how to use them. So we need capabilities. So we go from learning to skills, to capabilities, and many of you've heard me talk about what a capability is. Capability is a business context, relevant set of skills that actually makes you better at your job. And they have more complex concepts. We discovered about 85 capabilities in the HR profession that we have, that you can assess yourself against in our capability model. And that begs the question of building what we call capability, academies, context, oriented training programs that don't just teach you what skill, but allow you to practice the skill.
Speaker 1 00:08:14 Use it, develop it over time, get mentoring, get coaching, do some stretch assignments, get feedback and so forth. But then let's suppose you do build these capabilities and you've turned into the world's best sales rep or the world's best manufacturing engineer or, or a really, really good supervisor or manager. What's next. Your growth growth is the next step from learning to skills, to capabilities, to growth. That's what's going on. And if we don't focus on growth in the L and D function, we're not solving the ultimate problem. I'm not saying the capabilities are not important. They definitely are. But as this research shows the context for building great capabilities is where is this company trying to go? Where is our product set, trying to go? Where is our business trying to go? Where is our industry trying to go? And if you aren't clear about those directions and you aren't working on the programs to enable people to move in those directions, you're probably slightly underperforming.
Speaker 1 00:09:17 Now we've talked a lot about growth in many, many parts of our research for many years. I remember in our early research on succession management back in 2000, oh, I don't know, six or something like that. We came up with this idea of facilitated internal mobility as sort of the ultimate job of succession management. Well, in this particular case, when we looked at all the data and we clustered it into statistical clusters, what we basically found is that only about 11% of companies are really good at this, and that's not bad, but that's, that's kind of the way this always happens. Whenever something new comes along, there's some companies that really jump into it with both feet, cuz they're just well organized and they have great people and some companies are sort of thinking about it and it takes them longer. So here's the maturity model of this research.
Speaker 1 00:10:06 Number one, the, the most fundamental measure or approach to training is what we call programmatic training. Programmatic training is what you do when you start a training department. Oh my God, nobody knows how to use Salesforce. We need to get a course. People keep putting the wrong information into this system. They keep breaking this thing. They don't know how to do such and such. We train them. And that is programmatic because it is designed by us on behalf of employees. And it is designed in a program that we architect for them because we, as subject matter experts or L and D leaders know something about the domain and what needs to happen. And you have to do that to keep your job the second level. And that's about 32% of companies, about 32% of companies are doing that. The next level is self-directed learning. And this is what happened in the last decade with the learning experience platforms and YouTube and all of these self-directed content platforms.
Speaker 1 00:11:04 People go through these training programs and they learned what they need to know. And then they're done and they say, woo, I'm glad that's over. And then they start doing the job and they think, you know what? There's something here. I don't quite understand. Where do I get the answer to that? Is there a video? Is there a document? Can I talk to somebody? Maybe I'll take a little course on this so I can get better at it. My manager says, you need to take a course on negotiation. Here's one you can check out that is self-directed learning. That actually was a pioneering idea. 10 years ago. It was very hard to do that in the original LMSs we had. And so the learning experience platforms in the microlearning platforms and platforms like YouTube made that easier. And a lot of that by the way, is authored by internal experts, not by L and D.
Speaker 1 00:11:46 So that opened up this Pandora's box of internally developed content or what we now call the creator marketplace of corporate learning. That's level two level three is what we call tailored development at level three, we as an organization or you as an L and D function come up with tailored development plans for each job role or a family of job roles, or it's done at an individual or local level. And we build career paths or development plans or roadmaps. And a lot of this is AI driven now, by the way, where the platform that you're learning in says, oh, well, if you're a salesperson and you haven't taken any courses in negotiation, or you haven't taken any courses in objection handling, we recommend you do some tailor development in these adjacent areas to round off your skills. And that can be very complex or very simple.
Speaker 1 00:12:44 And those kinds of development plans should be developed with subject matter experts in the domain, a company like Ericson, and most of the telcos that are working in 5g 5g, isn't just a technology. 5g is a whole stack of technologies, but there are new business models. There are new consulting offerings. There are new measurement domains, new industries being created because of 5g. And if you take a course on 5g, you're not gonna know any of that. You're just gonna know how the tech works. So that would be a more of a capability development effort and that's level three. And by the way, that's what a capability academy is all about. It's about bringing people together in a domain, talking about the applications of skills and how they're used and what are the things we need to do to create context and wisdom and experience and judgment in these skills, not just the technical skills themselves, about 13% of companies tell us they're really good at that.
Speaker 1 00:13:46 And then the fourth level is what we call facilitated growth. Facilitated growth is where you're doing the other three sets of things. And a lot of you are, I know that, and you're going beyond that. You're creating career pathways. You're looking for adjacent skills. You're allowing people to use the talent marketplace to do something that they wanna do that maybe you didn't know they were actually good at, or they didn't know they were good at to experiment with new career options and create essentially the fluidity inside the company for growth. And if you think about what happened in the pandemic of all the things we've been through, and it's been a lot, I think the thing that's been the most exciting to me is how companies have become more adaptable. You know, we had to send people home. We had to move people into new jobs.
Speaker 1 00:14:34 We had to change the way we were selling things. We had to build all these new digital tools and people responded. People are incredibly adaptable when we give them a supportive environment. And if you look at the industries, we're looking at the companies that have superior performance can, can do facilitated growth almost by their nature. And we're just finishing a massive study of the healthcare industry. You talk about an industry that that's really under stress. There's more than two to two and a half million nurses in demand. There there's 700, almost 700,000 nursing jobs open right now, right this minute. And so they can't just go out and find these people. They have to encourage them to come into the profession. They have to develop them. They have to move them from adjacent jobs. They have to build career pathways. And you know, when I talk to heads of HR in the, in the healthcare industry, I hear a much more complete and integrated strategy about talent management than I do in almost any other industry.
Speaker 1 00:15:31 And that's because they have no choice. They have to find people that can move around into new roles and continuously develop themselves in a facilitated growth way. And, and if you get good at that in your company, I can guarantee you that your company will be more competitive. It will be more adaptable and you'll improve employee engagement and retention. Because in case you don't know this, one of the greatest values of corporate learning is employee engagement. Yeah. We want skills and capabilities and operational excellence and, and lots of people in good jobs doing good things, but it makes them happy. It gives them a sense of belonging. It makes them love working in your company. It gives them a sense of happiness that they can use with others in their jobs. Because if you look at most of the exit surveys that have been done on why people leave companies, yes, it has to do with management and trust and culture.
Speaker 1 00:16:25 But it also comes down to growth. People saying things like I wasn't going anywhere. It was a dead end job. I wasn't learning anything. Those are the things that always are behind the scenes when somebody leaves your company. So if you give them lots of opportunities, you will become not only a company that develops people, but a company that better assesses and engages people as well. Now there's lots and lots of things in this research. I'm not gonna go through the whole thing right now. We do this work for our corporate members. And then of course we give a lot of it away for free, but we would encourage you to join our membership program. Let me leave you with one more thing. That's really, really important here. And that is that this is not just about building a bunch of programs and buying a talent marketplace and turning it all on.
Speaker 1 00:17:12 It's really a journey in culture and internal skills in L and D. If you look at companies that have lots and lots of internal growth, and they can practice growth in the flow of work and managers, coach people, and people move around from role to role. And there's a real spirit of adventure and mobility inside the company. They have a lot of things they've learned over the years. They reward people for mobility. They talk about mistakes and don't blame people for mistakes. They hire and promote managers who are developers of people. They have people in L and D that understand the technology well. And they're willing to invest in new tools all the time because the L and D market is filled with technology and innovation. It's in the most innovative stage I've ever seen it, to be honest, they try new things. They do MVPs.
Speaker 1 00:18:09 They go out and they work with the business. They look at skills taxonomies, they practice talent intelligence. They look at where the job market is going and where the skills are going. They're fairly sophisticated things you need to do here. And these cultural and expertise things are all part of the L and D function. And so in many ways, what's going on here is L and D is not really the training department anymore. If you think about yourself as the department of growth and all of the implications of that word, you've gotta talk to recruiting. You've gotta talk to employee engagement. You've gotta talk to the employee experience group. You've gotta talk to the compensation and benefits group, because one of the things that gets in the way of growth is pay models and reward systems and how managers are rewarded. And maybe even how the performance management system works, which may not encourage growth and mobility.
Speaker 1 00:18:56 So this is a really profound set of findings in something that is clearly the direction we're going in companies. And if we have a, an economic slowdown or a recession or whatever, you know, happens, I don't think that's gonna happen. But if it does, this is gonna become more important than ever because you're gonna have to do this in a context of not just hiring people every time you want to fill a new job. That's actually in some sense, the easy way, the hard way to grow is to grow through internal agility and internal mobility. And it is in more profitable and lower risk way to grow companies that just keep hiring and hiring. Hiring are the ones that are in trouble right now. A lot of them overhired. So this whole business of facilitated growth and growth in the flow of work is really a CEO level agenda. Anyway, this is a really exciting part of our research. I want to compliment and thank NAL NAIA who led this research for us will be doing a lot of education outreach on this. And please get hold of us. If you'd like to get a deep dive and talk to us more about how it implies to your organization. Thank.
