The Training Junto

Credentials to be Santa? Gray hair and beard; poor vision (must own gold wire frame spectacles); overweight (greater than 200 pounds); jolly personality…and oh yes, must have completed certification training.

It’s not enough to have the physical qualities. To be a ‘real’ Santa, you must be well trained in Santa Claus skills. The role of Santa is one of the most influential characters to a child in their lifetime. The person who portrays that role must be trained in how to deal with children who are scared, having a temper tantrum, and not knowing what he or she wants for Christmas. Curriculums include the history of Santa, voice training, etiquette, costumes, makeup, role playing and more.

The first training class for Santa’s was held in 1937 in Midland, Michigan and continues today. The Charles W. Howard Santa Claus School is the longest continuously running Santa Claus School in the world. Mr. Thomas Valent is the current dean of the Santa Claus School and has conducted Santa training all over the globe.  And there are many other schools for training Santa’s.  Victor Nevada runs the Santa School in Calgary, Alberta. Stuart Thompson runs The Thompson Santa School in the UK, and the International University for Santa Claus holds their School4Santas all over the world and claims to be the world’s largest international school for Santa’s.

The cost for being certified? Anywhere from $300 to $500. Suit and supplies are extra. And if you really want to learn how to be Santa in a fun way, you can attend next year’s “Santa Cruise and School” cruise to Alaska and the North Pole aboard the Princess Cruise III for the low price of $624. Don’t forget to purchase liability insurance to protect yourself against those parents who think you didn’t provide your service just the right way.

And after completing training and getting your certification and insurance, I recommend you become a member of one of the fraternities for Santa Claus’s. According to The Boston Herald,  “The Nation’s Premiere Fraternity of A-List Santas” is the Amalgamated Order of Real Bearded Santas, or AORBS. It is an international, fraternal organization dedicated to training Santas and enhancing their portrayal of Santa Claus for the benefit of family and community. They even have an official ring and pin to distinguish the professional Santa from the untrained and disguised novice jolly St. Nick. Other associations or groups which are recognized by the schools for Santa’s are FIRBS, or the Fraternity of International Real Bearded Santas; FORBS, or the Fraternal Order of Real Bearded Santas; Buckeye Santas, The Santas of Ohio; IOS, or the International Order of Santas; MOTS, or the Mystic Order of Traditional santas; and the Palmtree Santas, or The Santas of Florida.

So when visiting your local mall or department store this Christmas to visit Santa, be sure to ask the Elf where Santa got his training. If he cannot produce his calling card or a copy of his certificate, be careful about leaving too much information about what you want for Christmas. You may be talking to someone not well qualified to perform on Christmas Day.

Merry Christmas from TrainingIndustry.com!

For many of you, it is a family tradition to tell those at your Thanksgiving table what we are most thankful for. In remembrance of that time, here are the 7 things I’m most thankful for as a training professional.

1.   Training Managers - I’m convinced that the managers of training functions are the unsung heroes of our industry. Let’s face it – very few companies (less than 8%) actually have a CLO, or someone who directly reports in to the CEO with sole responsibility for training. Training Managers may be called VP’s, Directors, Supervisors, or Administrators. The common denominator is they all manage the training function. But for some reason, we’ve glamorized the position by putting a high level title around it, and we still struggle to get organizations to accept or endorse it. Well for all of you who have the title “Training Manager” and actually manage the day to day activities of the training function; who deal with line managers that believe the cause of many business problems is that employees weren’t properly trained, and who deal with financial executives who are consistently wanting to cut your budget, and who deal with vendors who are sometimes demanding and unreliable, I’m thankful that we have you in our profession. It’s people like you who make me proud to say I’m a part of your training fraternity.

2.   Corporate Executives who keep on investing in training – Thank goodness, there are still many corporate executives who still have faith in training. Even when they can’t measure the return on investment, and they are not completely sure the value they get from the training function, I’m thankful for all of them who keep on investing in their employees and to the future of their company.

3.   Suppliers who create new delivery and access technologies – I’m thankful that there are companies who believe in this industry enough to continue to invest in coming up with a better way; a better mousetrap; an innovative solution for how people can get access to information that help them learn.

4.   ASTD – it’s great to know that we have a vibrant and active professional association that works diligently to improve our profession. Through good and bad times, the American Society for Training and Development continues to create a world that helps the training professional get better at what they do.

5.   Freedom of Speech – In no country in the world are we able to so openly and freely speak our minds about what we think is good and bad about our country and the industry we work in. And this translates to our profession. We too often take this freedom for granted. But it is what makes businesses and portals like TrainingIndustry.com possible.

6.   U.S. Military – And I’m thankful that we have a military that protects this freedom. And a military that is so well trained that they are the best prepared in the world.  

7.   My staff – Last, but clearly not least, I’m thankful for the team of people I work with everyday to bring TrainingIndustry.com to you. The staff here is the most professional, hard working, caring, ethical, and giving group of people I’ve ever been associated with. And they tolerate my changes in mood, forgetfulness, and over passion for what we do. Thanks goes out to Jim, Emily, Ken, Tim, Tracy, Erin, Chelsea, Paula, Scott, and Nellie and the many contractors and suppliers who help make our business successful. On this Thanksgiving Holiday, thanks to you as I’m happy to consider each of you a part of my family.

I would love to hear what you are thankful for as a training professional. Please feel free to comment on what makes you thankful to be a part of our industry.

Well if you did, you may have noticed some interesting findings. I found some data to be interesting, and some just not very helpful in how I would manage a training organization. But that's the challenge with designing research. Sometimes the data is good for discussions around the coffee pot, but not relative enough to change how and what we do.

I'm not bashing the report - the work is very important and I support the effort immensely. It's important research the industry is hungry for. And we need to support ASTD to make it more relevant and useful to how we manage the learning function. And if you are a training supplier, this data could be helpful in understanding trends for new technologies and services. 

Here are a few of my observations about the report. I hope you'll tell me yours.

1. Data from the report is all 2007 data. But the report wasn't published until November of 08. Seems to me the data is old. Especially considering the economy has changed considerably from '07 to '08. My advice - be careful about interpreting the data as current. It's not. And a message to ASTD; how can we help you make it more timely?

2. The report provides a lot of data. Wow! But the data is unclear and hard to understand. For example, the study reports on the average learning hours used per workforce learning professional (WLP) staff member. It tells me it went up in benchmarked companies, down in BEST companies, and up in overall companies. And provides no real inference about why. So what can I do with that? And what trend should the industry be moving in? I've worked as a training professional for more than 25 years and I still don't know what all of that means.

3. The report states there was an increase in 'direct learning expenditures per employee' of 6% from 2007. This is consistent with data we found for last year in the growth of the industry. So what do respondents predict for this year? Thought that would be good to know.

4. ASTD states there was a 'noteworthy' set of findings related to advancements in operational efficiencies for the learning function in 2007. Data shows that the average number of hours of formal learning content used per employee increased from 35.1 in 2006 to 37.4 in 2007. Organizations also experienced an increase in the volume of learning content consumed per employee, rising from 40.7 hours used on average to 43.0 hours. Each employee used an average of 44.7 learning hours in 2007. Although it is not overtly stated, it appears this is presented as an improvement.

I believe that being more efficient means doing more in less time. In our industry, we should be focused on helping employees learn what they need in less time. This important misrepresentation of what's best for the business is a fundamental problem we have in our industry. It also appears that ASTD is communicating that our industry (and/or profession) is improving if employees complete more training. Not correct. Our challenge is to help the business be more profitable. We will be much more respected as training professionals if we focus on doing the right amount of training in less time. 

Thus, speed to efficiency is the better metric. Maybe the study should provide us this data. Please remember: DOING MORE TRAINING IS NOT ALWAYS GOOD FOR OUR CONSTITUENTS OR CLIENTS! Sorry but that is the reality. 

5. The most disturbing data point of all. The study found that the average cost per learning hour consumed for Benchmark Forum organizations rose from $35 in 2006 to $47 per hour in 2008. This is a 34% gain. Other data shows that the cost per learning hour for all companies responding went up from $54 to $56. Not as big a percent gain, but never the less disturbing. BEST companies went down from $47 to $46 per hour. Considering our job is to drive costs down, this information is not trending in a way that we should be proud of. No doubt there are lots of factors to take into account. But if we are allowing this metric to grow faster than the inflation rate, then we are not doing our job. I think it's important that we hold ourselves accountable to this critically important metric.

6. Here is my favorite one. ASTD data shows that the average number of employees per WLP staff member went up from 216 to 227. This is positive. Unfortunately, BEST companies trended the opposite way. They went down from 179 to 165. The bottom line; we should be able to manage the training function with less people. The only acceptable trend here is that we are finding ways to manage the training function with less people as a percentage of the overall population we support.

In summary, I recommend you take a deep dive into the report. I applaud ASTD for this research. It's very important we support ASTD so we can continue to improve our industry - and our profession. But let's not fool ourselves. Corporate executives do not want us to build empires. They want us to reduce the cost of learning, improve the effectiveness of the training we produce and deliver, and only provide the training necessary to get the job done. Training is not an entitlement. It is a necessity of growing a business. So let's do our part in helping manage it that way.

In today’s economy, does it make sense to own stock in a publicly traded training company? It depends on your investment goals. But it may be an interesting investment to consider. Let’s compare five training companies and how they have performed in the last 5 years to the S&P 500 index. You may know that the S&P 500 is viewed as an optimally diversified portfolio so it gives a good, but not perfect perspective of market performance. The period of performance evaluated is from 1/6/03 to 10/27/08. I chose this period because it takes us from the tail end of the .com crash to current day activity.   

Companies I studied are General Physics (GP), SkillSoft, Saba, New Oriental Education, and Learning Tree. All are completely focused on learning services and technologies. Each has a different strategy related to products and services for their customers. But all are well branded and respected companies in the global training market. Please note that I did not include any of the companies who provide learning services as a secondary part of their business model. Examples of these are Accenture, IBM, and Raytheon. Also not included are companies listed on foreign exchanges (e.g. India, London). Companies you might consider here are NIIT, and Aptech. Here are the findings from each of the 5 companies reviewed. .

• General Physics (NYSE:GPX) – training outsourcing company; last traded for $5.30 the week of Jan 6, 2003. On Oct. 27, 2008, last traded for $7.28. Increase of 37.36% over the period.
• SkillSoft (Nasdaq:SKIL) – e-learning and performance support solutions; last traded for $3.14 the week of Jan. 6, 2003. On Oct. 27, 2008, last traded for $7.17. Increase of 128.34% over the period.
• Learning Tree (Nasdaq:LTRE) – training delivery services for technical and managerial training; last traded for $13.27 on Jan. 6, 2003. On Oct. 27, 2008, last traded for $10.58. Decrease of 20.27% over the period.
• Saba (Nasdaq:SABA) – enterprise learning content management software; last traded for $.99 on Jan. 6, 2003. On Oct. 27, 2008, last traded for $1.70. Increase of 71.7% over the period.
• New Oriental Education (NYSE:EDU) – English language training in China; last traded on Sept. 16, 2006 at $26.40. On Oct. 27, 2008, last traded for $45.84. Increase of 74% over the period (note that New Oriental Education was evaluated over a shorter period because they completed an IPO in 2006).

Now let’s look at the S&P 500 Index over the same period of time. I found that the S&P has dropped from 927.57 on Jan. 6, 2003 to 848.92 on Oct. 27, 2008. This represents a drop of 8.48%. Initial data shows that four of the five companies outperformed the market. Below is chart showing the trend of these 5 stocks against the S&P 500.

Source: Yahoo Finance 

If you are interested in following the education and training industry index and comparing it to the S&P index, take a look at Education and Training Industry Index.

With all that said, what do you think? Are training companies a good investment over the long haul?

Everybody fundamentally believes that employee training is good for business. Who would argue that point. One might say it improves employee satisfaction; another says it increases productivity; yet another argues it reduces turnover, on and on and on. Well how about this one? It prevents lawsuits!

Who says? Mr. Richard Ward, CEO of the Lloyd's of London insurance company says. In an article/interview published in the USA Today on September 15 (click to view article), Mr. Ward stated, "Staff education is absolutely key. A better understanding of the consequences of behavior lessens risk and improves the reputation of the business. Employees should be encouraged to raise concerns and share information."

I've always believed that one of the primary, but sometimes subtle and unmentioned reasons companies provide customer training is to mitigate risk. It is the risk associated with a customer not using a product properly; or getting injured, either physically or financially, from a product where the supplying company did not properly prepare the customer for its use. Or it's the risk of losing a customer where they choose not to buy a product or service again because of post cognitive dissonance. If customers are not well prepared to use the product, they won't buy again.

This risk translates into 'failure cost' - the cost to the supplier due to the failure of not delivering upon it's obligations or responsibilities.

Mr. Ward is very clear that if we don't train our employees properly, we stand the risk, or increased probability of being held accountable. So good leaders know that training is not only good for business because it potentially increases revenues, but because it helps to reduce unnecessary costs.

So why do YOU train employees and customers? Are you doing it for ALL the right reasons? 

There is a lot of merger and acquisition activity in the training industry right now. Personnel Decisions International (PDI) and Ninth House announced today that the two companies are combining to create PDI Ninth House. (Click here to see the press release). You should also expect that Korn/Ferry International will announce today (or very soon) they will acquire Lore International Institute.

Is this a sign of the times? I think it is. We have a very fragmented industry where no one company has more than 1% of market share. This is not common in multi-billion industries. So don’t be surprised to hear about more in the next few months. And don’t expect it to stop there. This is not only a trend, but the characteristics of an industry with so many companies with diversified capabilities. You should also expect that many of the future acquisitions will be by private equity firms. It appears there are a lot of eyes on our industry right now.

The magic question is when will we have our first $1B training company? My bet is we’re not very far from it; maybe in the next couple of years. It’s rare to have an industry as large as ours (more than $130B US) and not have a company that leads in size. None have approached the $500m yet. And no, IBM and Accenture do not count because training revenues do not exceed this number.

If you are interested in what's happening in the world of distance learning, mark your calendar for the week of Nov 10-14, 2008. This is National Distance Learning Week (NDLW) and it is sponsored by the United States Distance Learning Association. NDLW promotes and celebrates the tremendous growth and accomplishments occurring in distance learning programs offered by businesses, schools and governmental departments.

According to Mr. John Flores, CEO of the USDLA, there are over 3.5 million college students taking online courses, 700,000 high school students taking one or more courses online, and nearly 40 states with well established state-wide or state-lead virtual schools. During the week of Nov 10 -14, organizations will be showcasing their programs for current and prospective students. If you would like to learn more about NDLW, go to http://www.ndlw.org/index.html.

For more information about the US Distance Learning Association, you can visit www.usdla.org.

Congratulations to all of the companies named to T&D Magazine’s 2008 list of Best Learning Organizations. It’s great to see that of the 40 companies recognized, many are well known and respected corporate brands. As measured by the number of employees, the companies range in size by a large spread; the smallest being 300 (Forum Credit Union), the largest 427,700 (UPS). Only 4 companies had less than 1000 employees, with the average at 29,000. I don’t think this shows that only large companies with very large budgets can be ‘best’ at learning, but my experience has found they do have larger budgets per employee to work with.

Only 3 companies made the list this year from last year. Does this mean that the best learning organizations are only able to sustain this level of effort or accomplishment for a short period of time? It seems to me that excellent learning organizations are able to sustain excellence for longer periods than one year. Not sure what to make of this?

Of the companies selected, only 5 companies are headquartered outside of the U.S., with four from India, and one from China. So where are the companies from Europe? I would think that European organizations are committed to learning. But we do know that many of these companies have employee bases all over the world. The mix of companies by industry segment was also interesting. Two-thirds of the companies (27 of 40) are professional and technology based companies, whereby 13 of the companies came from industry’s represented predominantly by lower skilled, or trade workers from the hospitality, retail, construction, and food services industries. Is this representative of the overall make-up of companies from all industry segments, saying that companies who are most committed to learning are those whose employees are more educated and trained?

If this is the case, I think it is indicative of what we would expect from industry’s that do not hire as high of proportion of skilled and educated workers. Shouldn’t they be the companies that are more focused on learning? Or is it more about the expectations of the worker? Lower skilled jobs require less training.

Overall, I think the list is excellent and good for our industry. It brings visibility and recognition to companies and executives who are successful in the business of learning! My only issue is that someone who wishes to learn from these organizations must buy a  membership to ASTD.

TrainingIndustry.com and The Training Junto are about providing buyers and suppliers of training services a community for learning about what's happening in the business world of training, as well as a place where you can contribute to making it a better marketplace.

I have been vocal about our profession’s inability to be viewed as strategic players in the boardroom of corporate executives. Now I believe we are approaching a new frontier for our industry.

Our industry really took off in the 70’s with the popularity of leadership training. Then in the 80’s, with the advent of the personal computer, we created innovative products and services on learning how to use the computer - as well as how to use the computer to learn. Still growing in importance, although not as popular as other advancements, the last few years brought a huge shift in managed learning services.

So what’s next? I believe it is around what Thomas Friedman, author of the book, Hot, Flat, and Crowded, claims is the green revolution. Recent conversations with investors in the training industry believe this also. I would argue that the creation of many new alternatives for energy will create a boom in the compliance training market. And if you are a training professional, it could mean many new job opportunities for young entrepreneurs and college graduates.  

So as government is asking all of us to to conserve and keep our environment ‘green’, I’m asking all training professionals to submit your ideas or comments on how we can help in finding ways to better educate and train workers to conserve and create innovative learning products and services for the green and energy industry. Your ideas will be used in our winter issue of the Training Industry Quarterly , the industry’s only completely green magazine for training professionals.

Originally published in Summer Issue of Training Industry Quarterly

A recent study by Training Industry, Inc. found that more than 91% of training professionals in Fortune 1000 companies feel some sort of pressure to reduce the costs of training. So you must be asking yourselves, “Are We Spending Our Money Wisely?” If you’re not asking it, then I’m sure someone else is!

The need to be good fiscal managers of training services is nothing new to learning executives. But for some reason, we have not made great strides in the last couple of decades. It appears we are not gaining ground in the board rooms either: Some estimate that less than 8% of the Fortune 1000 companies have a C-Level Executive directly responsible for training.

It doesn’t appear we are being viewed as strategic stewards or thinkers. Is it because we don’t know how to spend money wisely? Or is it because we don’t know very well what we should be spending the company’s money on? My experience as a training executive taught me that the greatest challenge in leading a training organization is making sure that the programs and initiatives you bring to the training table really drive change and improve performance. If they do, I don’t think you’d hear as much about the costs; nor would you be challenged as much to justify the initiative’s purpose.  

Much of the debate in the last few years has focused on how to calculate ROI or the Net Present Value of the training program. Great stuff, but not very important if you are offering the wrong programs. A common approach by many leaders in training organizations is to create a curriculum, promote a schedule of events to employees, and based on the number of registrations (against capacity), determine that the course is needed or not. The idea is that if enough employees are taking the courses and if it gets good results from the Level 1 evals, then it must be good.

But does the course have anything to do with the company’s strategic goals? No matter how you rationalize an ROI calculation, if it’s not a good expenditure for the corporation, it’s like putting lipstick on a pig. No matter how pretty it looks, it’s still a pig.

To ensure you’re buying wisely, you need to do three things:

Step 1: Begin conducting annual portfolio reviews. Rationalize the courses you are offering or the projects you are involved in by asking if they are aligned to corporate objectives. If you cannot clearly align the course or project to a strategic objective or initiative, then go to step 2. You should do that every time you launch a new course, but remember that needs and directions do change and course alignment can be altered.

Step 2: Stop measuring success based on the amount of activity. John Wooden, the famed UCLA basketball coach, had an important philosophy; “Never confuse activity with achievement.” The purpose of training is to achieve a desired goal. If you cannot define the desired goal in an achievable and measureable way, then it’s a good chance the course is not necessary. How many times have your employees attended a course and left feeling entertained, but there was no change in their behavior or how they worked?

Step 3: Start delivering training that solves business problems.  The safest decision any training executive can make is to deliver training programs that corrects a problem the corporation is experiencing. For example, a few years ago, a well-known beauty products company was experiencing customers not properly applying its product, resulting in low customer satisfaction and lost sales. So they created a training program delivered at the point of purchase to teach customers to apply the product. Training became a strategic part of the business, sales increased significantly, and so did customer satisfaction.

If you want to be viewed as a great fiscal manager for training, and viewed as a strategic player in the company, stop doing the wrong stuff and start doing the right stuff!