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A Corporate Training Paradigm: The Innovators

Companies can improve employee performance when training is comprehensively structured around the job.
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Job training for new physicians is among the most rigorous of any profession.

Medical students follow a prescriptive path -- a set of carefully sequenced learning activities (e.g., readings, classes, structured experiences) with frequent assessments. Students can't become physicians by simply knowing the subject matter and passing a test.

They have to prove to expert observers that they are able to perform specified procedures, within a time frame with specific results. It is not enough to know and understand, doctors must be able to deliver results. Why isn't the same true in business? Why don't we teach business critical jobs such as production, sales, customer service and leadership using the medical school model?

Corporate training embraces a very different model. Many corporations today have created a corporate university to create standard programs and leverage scale to lower costs. Today's corporate universities typically operate as cost-centers; the university must pay for itself by charging user fees.

On the surface it seems to make good business sense, but the model has a fundamental flaw. Unlike medical schools, the objective of corporate universities is not to produce capable professionals but to recover costs. How does one do that? Like any other business -- offer whatever customers want.

An example of this model is

AT&T

(T) - Get Report

University in 1998. In the late 1990's the telecom industry was going through a seismic change from circuit-switched voice technology to Internet-based data technology. The change was similar to the change

Eastman Kodak

(EK)

and Fuji when through when photography technologies changed from film to digital.

Each year, AT&T's data revenue increased as a percentage of the business plan, but the company fell short quarter after quarter. The reason: AT&T did not know how to sell data.

Most of the company's senior sales reps had been with AT&T over 20 years. They succeeded because of their ability to sell voice products to telecom managers. The environment had changed, but they had not. Surprisingly, few of these senior sales reps signed up for data classes. When they did attend training, they signed up for advanced voice classes -- they just felt better there.

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Learning data at the age of 45 was like studying Chinese. Most felt they would never be experts, so why try? Although Global Services, AT&T's largest division, spent more than $4,000 per person per year on training, its expertise, in the eyes of its customers, was falling rapidly.

In 1999, Rick Miller was appointed president of Global Services. His first step was to reverse the downward spiral by forcing its 45 sales-center vice presidents to specialize 70% of its sales reps in data. Next, Miller built a small Global Services training function and held it accountable for annual improvements in sales capabilities.

Training's first step was to create a prescriptive learning path for new data sales reps. This was not the typical one-week training class. This was a six-month learning path similar to a medical school learning path where readings, classes and experiences were sequenced over time with numerous assessments along the way.

At the beginning of the calendar year, Miller announced that all new and incumbent reps would be required to take a technical test in data technologies and products -- the first annual assessment.

In October, as promised, every Global Services data sales rep took a 100-question technical test. Test scores were analyzed and individuals were sent their score and rank. High scorers were publicly recognized, while low scorers were notified that they were on watch. Next, all 45 sales centers were ranked, from smartest to dumbest, and the rankings were sent to all employees. That day, Global Services became an organization obsessed with learning.

The Lesson

AT&T shifted the paradigm from a corporate university where employees are free to learn whatever they want, to a prescriptive, highly disciplined medical school-type model. In the new model, training was not measured by class days or participant satisfaction scores. It was measured by year-over-year capability improvements.

As a result, "employee satisfaction with training" on the annual employee survey rose 41 points with two points being a statistically significant improvement. Employees said they felt more confident in front of customers. Significantly improved customer satisfaction ratings with "sales support" indicated that customers noticed the difference.

The Global Services model is summarized in three principles. First, remember "the customer is the customer." Setting up training as a cost center makes customer satisfaction the focus of training. The decisions one must make to improve customer satisfaction are very different from the decisions for improving performance. "If you chase two rabbits, both will escape."

Second, create prescriptive learning paths. Many organizations provide initial training for new employees or managers. After three to five class days, attendees may receive a certificate of graduation and are considered qualified to perform a job. But full proficiency takes much longer. What happens from graduation to full proficiency is a mystery.

Learning paths are different. They are sequences of reading, training, practice and structured experiences from start-up to full proficiency, with the emphasis on practical instruction on how to perform all aspects of a job. Structured learning paths typically reduce time to proficiency by 30%.

Third, measure knowledge/skill changes. Employees often complain that managers don't value training and development. This all changes when knowledge/skill ratings of a manager unit are made public. Hold managers accountable for skill improvements.

Many trainers are quick to argue that their work cannot be measured. And they may be right because of the difficulties in measuring the impact of generic leadership courses or classes in emotional intelligence under today's training model of unconnected programs.

However, when training is comprehensively structured around a job, performance changes can be easy to measure. Stop the elective classes and build complete, prescriptive paths for your most critical positions. It's time to change the paradigm.

Hall is managing director of Human Capital Systems (www.humancapitalsystems.com), a firm that designs systems for improving workforce performance. He is also an instructor in Duke Corporate Education's teaching network and author of The New Human Capital Strategy. Hall was formerly a senior vice president at ABN AMRO Bank in Amsterdam and IBM Asia-Pacific's executive in charge of executive leadership and organization effectiveness. During his tenure, IBM was twice ranked No. 1 in the world in Hewitt/Chief Executive magazine's "Top Company for Leaders." Hall completed his Ph.D in industrial-organizational psychology at Tulane University, with a dissertation on people management practices of Japanese corporations.