Preface

Let’s talk about your investments—specifically, your investments in training.

Businesses invest vast sums of money and significant portions of their productive capacity in training and development (T&D). It’s common for top corporations to provide from 30 to well over 100 hours of training to each employee every year. Smaller businesses frequently invest even more heavily in training as a percentage of payroll. Reliable sources estimate that, overall, annual U.S. corporate investments in T&D exceed $56 billion. ¹

Impressive as that figure is, we believe it is really just the tip of the iceberg. (We’ll tell you about the hidden costs of training in Chapter 3.) When executives first glimpse the true cost of training, beyond the mere fraction represented in most T&D budgets, they’re often staggered by the facts.

Training professionals invest something every bit as precious—their careers. We see training people pour themselves into their work day after day. Training is their craft. And for the best of them, it’s more than a career; it’s a passion. Nothing else can explain why so many trainers give so much to their jobs.

So, whether you’re a customer of training or a provider of training, you have a lot at stake. All that time, money, and energy could easily be dedicated to other practical purposes.

Are you satisfied with the return on your investment in training? If you answered No, you’re not alone.

Business leaders who buy training recognize that, in a knowledge economy, learning is central to business success. Corporations worldwide have ramped up their investments in T&D. And technological advances continue to fuel executives’ excitement about what training might do for them.

But there’s a problem. Many business leaders say that T&D remains “out of the loop” strategically, that it too often operates like “something separate from the business,” and that they don’t see enough tangible returns on their T&D investments. When training is perceived this way, neither the customers who pay the bills nor the professionals who dedicate themselves to the work can feel fully satisfied.

Our solution? Transform training from running as a function to running like a business. That is the key, we’ve found, to delivering the kind of value that results-minded executives recognize, appreciate, respect, and increasingly demand.

What does Running Training Like a Business mean? The core of the concept is to make everything training does simultaneously more effective and efficient. Being effective means delivering training services that tangibly help businesses to achieve their goals. Being efficient means making the true costs of training clearly evident and highly acceptable to its customers.

To become more effective and efficient, training adopts the values of its customers and eliminates the ambiguities that have traditionally clouded its mission. Training’s mission becomes unashamedly economic. Education is still what training does. But business education is a means to business results, not an end in itself.

Training organizations that run like a business aren’t allocated a corporate budget. They in effect sell their services every day, as does any business enterprise. The survival of this training enterprise therefore rests on its ability to address strongly felt customer needs.

For most training organizations, Running Training Like a Business will begin with a transformation. This book explains what is entailed in turning a traditional training function into a training enterprise that pursues missions clearly vital to its customers’ business strategies, and offers the range of resources required to fulfill those missions efficiently, consistently, and profitably.

The benefits of Running Training Like a Business are immense. Best of all, this tide raises all ships.

Business leaders get to work with training organizations that are thoroughly attuned to business issues and utterly dedicated to developing the skills, aptitudes, and attitudes executives deem vital for improved business results. Running Training Like a Business also reduces or even eliminates fixed costs for T&D and yields much more efficient forms of training activity. That frees substantial cor- xi porate resources for business leaders to invest in enhancing the core competencies of their companies.

Training professionals gain a clearer understanding of how their business customers think, what drives their behavior, and what they truly value. In fact, Running Training Like a Business propels internal as well as external T&D providers into the mainstream of their customers’ business strategies, makes their services a more integral and valued resource for fulfilling those strategies, and increases T&D’s stature in the business world.

The people who participate in training benefit as well. A training enterprise delivers services that line managers elect to buy. Participants in training will know, then, that their boss wants them to be there. Further, they’ll be learning skills that business leaders clearly value. That’s bound to help them get ahead in a marketplace where employees with practical, vital skills are in demand.

The concept of Running Training Like a Business evolved from our work with a wide range of organizations over the past six years. Some (but not all) of those organizations are cited in this book. Our experiences with Moore Corporation, Mellon Bank, Texas Instruments Materials & Controls, NCR, NatWest UK, and Oracle offer excellent insights into why some organizations choose to pursue this transformation. They also serve as practical examples of what one must do in the first several phases of the transformation.

We’ve often worked with customers through a construct we call an Insourcing Alliance, by which a business brings an outside training resource inside its company, merging the best of its existing T&D staff with those of the external training organization to form a training enterprise. This new organization—the Insourcing Alliance—replaces the former T&D function. Because most of our experience is based on this construct, we’ll refer often in these pages to these alliances, which are now operating or taking shape in a handful of pioneering businesses.

We will also stress, however, that the Insourcing Alliance is but one of several options for pursuing the transformation to Running Training Like a Business. We’ll describe, for example, an approach Kaiser Permanente of California calls an Alliance Network, as well as successful transformations implemented almost entirely from within at Motorola and General Electric.

In sum, we don’t have all the answers. Nor can we offer absolute best practices for Running Training Like a Business. Those practices are still being shaped. What we can do is describe an emerging concept, one which we’re still learning about ourselves, but which has already demonstrated remarkable power to make training significantly more valuable to everyone in business. We can also share experiences and insights from organizations that have embraced these principles and are turning them into reality. Finally, we can help your organization start down this path, too, if that is what you choose to do.

Toward those ends, we’ve divided this book into three sections. Chapters 1 through 3 make the business case for transforming traditional training organizations into training enterprises. We wrote these chapters for every executive who buys training services, and for all the professionals who provide them.

Chapters 4 through 8 are more prescriptive. They explore, in some detail, the major phases of transforming a traditional training function into training that runs like a business. They also delineate the key steps to successfully completing each phase.

Chapters 11 and 12 describe the fully formed training enterprise. They offer a glimpse into how Running Training Like a Business yields satisfying returns to all the investors in training—training providers, training participants and, most important, training’s customers.