Karen Jackson, corporate director and CLO of Computer Sciences Corp. (CSC), a 66,000-employee company with more than 700 offices on six continents, has some clear insights regarding strategic versus tactical learning and training. In her experience, there are too many people claiming that all training is strategic. In her experience, not all training is strategic, and that is OK. “Tactical” has become a dirty word, and it shouldn’t be treated that way. There is a significant amount of training that is tactical—it is just-in-time learning required to keep the organization running. Not all learning has an immediate impact on the top or bottom line. However, all training should deliver benefits consistent with the overall business goals and objectives. An important role for any CLO is to sort out strategic from tactical interventions and know what to focus on and why.
“In a global economy there are two levers to increase profitability—technology and competency,” said Jackson. Record spending over the past five years on technologies has led organizations to take a closer look at the second lever, competency. Increasing the competencies, that is, building the skills and knowledge of your workforce, can create strategic advantage. The following examples provide clear evidence of the real and measurable value of pulling the second lever.
Learning Improves Recruitment and Retention
Mark Andrews, senior director of learning strategy for the Tenet Health System, has some sage advice for CLOs seeking strategic opportunities. He recommends looking for a business problem and then asking if training can help solve the problem. Often the problem is complex and requires training as part of a larger, more holistic approach. In today’s competitive health care market, there is no shortage of strategic opportunities. At Tenet, training is part of a strategic plan for recruiting and retaining workers.
Tenet Health System is the second largest health care provider in the United States, managing 114 hospitals across 16 states with 115,000 employees. Like all health care providers, Tenet faces the challenge of recruiting and retaining registered nurses. The nursing shortage is a significant problem when you consider the statistics. Approximately one-third of the nursing workforce is over 50 years of age. A study published in the July 2000 issue of the Journal of the American Medical Association (JAMA) predicted that by 2010, 40 percent of nurses will be 50 years old or older. Making matters worse, there are roughly 21,000 fewer nursing students today than in 1995. With half of the RN workforce retiring in the next decade and fewer and fewer students entering nursing school, needless to say, the recruitment and retention of RNs is a pressing business problem.
Learning is a key part of a holistic intervention to improve the recruitment and retention of RNs. At Tenet, learning plays a strategic role. Two key strategies are access to 500-plus hours of online clinical training and learning paths aligned along a “Career Trajectory.” Career trajectories provide clear and attainable career paths for employees. Career paths enable employees to enter at one level and map a path to move from one job to another. An example of this is the career trajectory for RNs called “RN Track.” The RN Track is a strategic way to recruit, retain and develop nurses. Andrews explains that the program’s strengths are that it has multiple entry and exit points, it extends over the tenure of employment, and it enables employees to align personal and professional development.
For example, a new hire may accept a position as an office clerk and express an interest in nursing. Assuming the candidate is qualified and motivated, he is then given training and an opportunity to become a nurse’s aid. If he wants to continue on the nursing track, additional training is provided to enable that employee to become a licensed vocational nurse (LVN). Still more training is available to prepare the employee to move from an LVN position to a registered nurse (non-degreed RN), and yet more support is provided to pursue a BS RN (degreed nurse). In the advanced RN Track, learning opportunities are available for those seeking specialization in critical care, obstetrics and other nursing specializations.
There is ample evidence that the Career Trajectory program is working and that education is a differentiator. Tenet recently participated in a job fair in Los Angeles for new graduate RNs. This was a highly competitive event at which the major health care employers sought candidates. A survey of RNs who took job offers from Tenet after the job fair found that 40 percent of the RNs cited learning opportunities at Tenet as a major reason for accepting the offer. In addition to playing a significant role in recruitment, learning is part of an overall program that is credited with reducing RN attrition by 9 percent.
Learning Increases Customer Satisfaction
Karen Jackson of Computer Sciences Corp. (CSC) also looks for business challenges that learning and development programs can help solve. In fact, one of the guiding principles for all learning and education at the company is to ensure alignment of learning and development initiatives with business objectives. She uses a wide range of metrics to assess the value of learning. According to Jackson, good learning and development opportunities are directly connected to the bottom line and influence both short- and long-term profitability. As an example, CSC undertook the implementation of a Six Sigma program in one of its operating groups. What set the CSC Six Sigma program apart from others was the selective use of this methodology and a focus on applying the steps to affect visible, palpable and demonstrative results in customer satisfaction and service delivery.
It was clear to CSC that an ideal environment to implement this approach was in the call centers. These are places where learning and applying the Six Sigma methods would have a measurable influence on operations and customer satisfaction. The business problem was clear, there were too many severity-level-one and severity-level-two calls being dealt with in the call center. Employees trained in the Six Sigma method were able to bring down level-one and level-two problem tickets by 50 percent the first year. In the second year, the number of level-one and level-two help tickets is on track to come down another 50 percent. This year, the call center is targeting a reduction in level-three problem tickets by addressing call-center response times and increasing speed to resolution. Jackson is predicting a 50 percent reduction for 2002. The next step is introducing the Design for Six Sigma into the operating group engineering functions. These statistics demonstrate short-term bottom-line results by reducing operations cost, and in the long term, Jackson predicts increased customer satisfaction and higher win ratios.
Multiple Levels of Strategic Benefits
Dick Richardson, manager of the Center for Advanced Learning at IBM, acknowledges that it can be problematic to claim that learning is a strategic advantage. Richardson points out that the benefits of learning initiatives often do not have a simple cause-and-effect relationship. In some cases, measures of success must be observed on more than one level. An example of a program that provides strategic benefits on multiple levels is IBM’s Basic Blue for Managers.
The Basic Blue for Managers program provides leadership development and is based on the principle that learning is a career-long process, not a single event. Basic Blue utilizes technology from IBM Lotus e-learning and the company intranet to bring critical information to the IBM manager. The program has gained a great deal of attention due to the easily measurable benefits such as:
- Based on 5,000 new managers per year and a program cost of $5 million, the cost avoidance is $88 million based on a three-year financial analysis (includes all program costs, travel, living expenses and manager time).
- 2,285 percent ROI and a payback period of two weeks.
- Five times as much content delivered compared to the previous new-manager offering.
- 75 percent of the program is delivered through distance learning, and 25 percent via classroom.
- Allows managers to access materials at their own convenience, anywhere in the world.
These measures prove the program is delivering significant cost-savings advantages. But Nancy Lewis, IBM’s director of management development, stressed the need to focus on the real business issue and genuine strategic advantage. “We like saving money and a quick payback, but that’s not why we did this,” said Lewis. “We did it for effectiveness of our managers around the globe.”
Data from IBM’s exit interviews confirm what academic research has long documented: One of the chief reasons cited for leaving a company is dissatisfaction with management. In response to this problem, IBM developed Basic Blue for Managers. The business opportunity was to improve management skills worldwide and to reduce the number of “key regrettable losses,” that is, the number of employees with desirable skills leaving the company. Key regrettable losses are costly in terms of recruiting, relocating and assimilating new hires. And an equally important but harder-to-measure cost is the competitive impact of losing key skills. These losses do not have a direct correlation to learning management skills, so quantifying the strategic advantage is difficult. Richardson discussed two ways to measure the success of these kinds of strategic learning initiatives. One way is to hire a credible and objective external evaluator to evaluate the program. A second and complementary measure is to engage in qualitative research, such as interviewing the program alumni and their managers.
Measuring the Value of Strategic Learning
The challenge of measuring the value of strategic learning is not unique to high-tech. Terry Seelinger, e-learning manager at Duke Health System, is managing compliance training for the Health Insurance Portability and Accountability Act (HIPAA). HIPAA rules are composed of several sets of standards (transactions and code sets, privacy and security) developed by the Department of Health and Human Services. The goals of the standards are to simplify the administration of health insurance claims and lower costs, give patients more control of and access to their health-care information and protect individually identifiable medical information from real or potential threats of loss or disclosure.
The government has mandated that all employees who deal with patient information know their organization’s physical, procedural and technological security protections that must be used to ensure the confidentiality of a patient’s medical information.
Providing HIPAA training to 20,000 Duke Health System employees is a strategic learning initiative because it is mandatory and because it impacts everyone. Workers from disciplines that vary from housekeeping to intensive care are required to learn how they are accountable for HIPAA in their daily work. The 24x7 hospital environment makes delivering learning more difficult than in a traditional business environment because you can’t simply stop work for 30 to 60 minutes to deliver training.
Unlike other initiatives discussed in this article, HIPAA does not directly increase profitability or increase productivity. The measures of success are softer measures, such as the good will and patient trust created by being able to demonstrate HIPAA compliance. Another measure of success will be achieving 95 percent compliance by April 2003.
Ensuring the Strategic Value of Learning
I asked these learning professionals for advice for those who want to ensure that learning will have a strategic impact in their corporation. There were three consistent guidelines that all of these experts followed: find a bottom-line-oriented opportunity, get high-level support, and measure what matters.
The first and most fundamental was to find an opportunity or business problem that mattered to the organization. The best way to find this problem is to be in communication with C-level leaders or directors of lines of business. Hold these dialogues in clear business language. Suggested questions might include, “What keeps you from growing your billing 10 percent this year?” “What would help you increase retention of workers?” and “How could we improve customer satisfaction?” The answers hold the key to where strategic learning is needed. Richardson of IBM suggested that CLOs should do more than ask about problems, they should be proactive and ask about strategic direction. Often, moving a company in a new direction requires employees to learn new skills, knowledge and attitudes. If you are a new CLO coming in from a line of business, look for strategic opportunities in your old area of expertise, such as sales, shipping or customer service. Knowing the problem means you can focus the learning elements.
Second, work with a champion who has a stake in the success of the learning. Genuine business problems have owners—there is someone who cares about customer satisfaction, increasing the number of inventory turns and reducing the time to develop a new product. The champion must focus attention and resources on the problem and work to communicate the significance of the learning.
Lastly, measure what matters. The CLOs acknowledged the Kirkpatck model and clearly understood the process, but they suggested a more pragmatic approach. What all of them stressed was the need to measure what matters to your champion and to measure bottom-line results. If the measure of success is to be valued, the champion must have a hand in defining it. In some cases, like Six Sigma, the measures are clear; in other cases, the measures may be subjective, such as antidotal reports to the champion from their reports.
Margaret Driscoll, Ph.D., is director of strategic ventures for IBM Mindspan Solutions. She is the author of “Web-Based Training” from Jossey-Bass and a featured speaker at national and international training events.
March/April 2003 Table of Contents