Economic Opportunism: Learning & Training for the Future During Financial Crisis
Smart businesses know that economic downturns are a time for investing in the future, so when conditions improve they have the skills needed to grow and thrive once again.
This is perhaps in juxtaposition with the austerity measures being taken, which mean training budgets are being slashed. However, the idea is not to train more, but rather to train smarter.
ROI of Training
Running training like a business involves targeting the funds for workforce development towards those areas which are likely to yield the greatest results and boost to productivity, while streamlining those which are of least value.
For those who need a little encouragement about the ROI of training initiatives, the figures speak for themselves. Research from the University of Pennsylvania found that for every 10 percent of revenue spent on capital improvements productivity increased by 3.9 percent.
In comparison, spending the same amount on human capital yielded an 8.5 percent increase in productivity.
Companies are increasingly realizing that for training and development activities to be at their most effective, their initiatives must be fully aligned with their corporate strategy.
Josh Bersin, chief executive officer and president of Bersin & Associates, explained: "Leading companies are creating learning environments that include both formal and informal components to build deep levels of expertise and to better align their organizations with business needs."
He added: "That's how they're going to beat the competition."
Bersin highlighted examples of good practice in its Corporate Learning Factbook 2011, naming The Cheesecake Factory restaurant chain as one company which fully took advantage of the recession to enhance its training operations.
The company chose to refocus its development initiatives on its core priorities, while streamlining all its other training functions.
By using a video-based platform, which allows workers to access training films made by their fellow employees and the learning and development department, the chain is one of a growing number which has tapped into technology as a way of providing informal learning.
Others include Amway, which was praised for its "curriculum that is 100 percent based on competencies to fill performance gaps."
"Many forward-thinking organizations are shifting their focus away from company-driven, formal learning programs to support the natural flow of learning across the organization," Karen O'Leonard, a principle analyst at the company, said.
Aligning Training With Corporate Strategy
The partnership between German medical engineering company, MAN SE, WHU-Otto Beisheim School of Management and Saðd Business School at the University of Oxford was recognised at the EFMD Excellence in Practice Awards as the best collaboration in the Executive Development category.
One of the main challenges MAN was looking to address with the partnership was aligning its training and development operations with its corporate strategy to "shift from local, limited goals to more testing international ones."
This is an aim for a growing number of firms looking to compete in the increasingly global, knowledge-based economy.
MAN's General Management Programme (GMP) was given a new focus, to address the need for a greater number of international leaders within the company.
Teaching was split into two modules. One module was undertaken at the University of Oxford, and the other at WHU in Vallender.
"This twin-campus, two-country delivery is an important feature of the program, given its international orientation, as are contextual presentations and ample extracurricular opportunities for participants to network and forge vital international relationships for the future," the EFMD case study noted.
The concept of individually-driven learning was said to sit at the heart of the program, allowing for the center of "individual learning goals."
GMP was complimented with an Executive Management Program, which was also dual center, as getting senior management on board was said to be a "fundamental success factor".
The training programme was said to have led to a number of important initiatives being set in motion, including its‘Global Footprint’ and ‘Use of Working Capital’ schemes.
"In the context of the global financial crisis and the squeeze on credit, it is vital for companies to mobilize their cash reserves and manage their working capital as efficiently as possible. This was particularly the case in MAN which, like many companies, suffered a significant deterioration in liquidity in 2008/9," it was explained.
Those involved in the program reported a broadened understanding of the management landscape and better perspective of the increasingly globalized environment the company operates in.