In 2017, Bersin by Deloitte researched learning organisation maturity and shareholder performance (High-Impact Learning Organisation). They found a +59% difference in three-year average share price and +107% difference in three-year average earnings per share between an organisation with the lowest vs highest learning maturity. That in itself creates a strong case to review how learning & development is enabling the organisation in adopting to tomorrows human capital requirements.
Looking at a macro-level, we see that markets are changing at ever-increasing speeds and changes. A common saying today already is: “the world will never move as slow anymore as today”. There are a few key drivers here: globalisation, digitalisation, the speed of innovation and an ageing workforce. Something that is often linked to the VUCA model, or volatility, uncertainty, complexity and ambiguity of general conditions and situations; drawing on the leadership theories of Warren Bennis and Burt Nanus. But what does that concretely mean for a company?
From a CEO perspective, this means that in years to come a significant part of the workforce needs to be changed. Partly due to new skill requirements, partly due to retiring employees, partly due to new organisational structures that remove middle management layers. Some CEOs indicate this can impact a significant part of their current workforce. That creates a severe strain on the talent market for attracting the right people on the one hand but also demands an L&D approach that enables internal skill development in a flexible, rapid and effective way.
The majority of L&D departments today face next to this increase for internal skill development with resource and budget cuts, putting them in a tight spot. From L&D department heads that I have met over the past two years, I’d say that about 90% are facing this issue and try solving this by producing training content in more efficient ways. The feedback that I’ve often heard from them is that the work they do is usually not very valued by “the business”. The cooperation between the business and L&D is often a strained one: the business comes last minute with their training requirements, L&D tries their best to support the business in achieving their goals, employees are trained, employees return to their daily routine due to insufficient transfer measures, and in the end L&D delivered not enough tangible business impact. It is something I keep on hearing from peers over and over again, regardless of industry, country or company size.
The way corporate learning & development is done today is not fit for the digital world of today, let alone the digital world of tomorrow. There is a behavioural shift needed on four levels: organisation, leader, manager, and employee. The organisation needs to include learning to become a part of its core values. Leadership needs to live that core value and set the example. Managers need to be held accountable in measurable ways for developing their employees, as well as their employees themselves. I found that there are three core believes need to be changed inside the organisation for that to become possible:
- Demonstrating exact knowledge = high professionalism vs Failing fast
- Knowledge = power vs. Make my colleagues successful
- L&D is a knowledge distributor vs L&D is a knowledge enabler
FAILING FAST IS THE NEW “FIRST TIME RIGHT”
Professionalism is often linked to being able to demonstrate exact knowledge and delivering quality from the get-go. But in a world that is innovating so fast, how can professionalism still be linked to only that? With such a mindset, it is nearly impossible to innovate. Organisations always have to balance between innovation and operational excellence to drive their sustainable growth, but more of that trial-and-error spirit should become part of a companies DNA. The 80/20 principle, or “good enough”, should become an acceptable and respected way of working, there where operational excellence is not required for delivering high or critical customer value.
HELPING MY COLLEAGUES TO BE SUCCESSFUL MAKES ME SUCCESSFUL
Many of us have grown up with the belief that knowledge equals power. That was before Google, Wikipedia, YouTube and the rest of the internet. Today, knowledge has become a commodity useful in developed countries. Instead, today’s power lays in finding the right expertise, assembling it in a way that adds value for someone and then implementing that value successfully. Another challenge here is how the school systems have trained our brain to think in linear approaches: work hard, get promoted to the next level, repeat. All thanks to the industrial revolution that shaped our school system, though significantly losing relevance for today’s business. And that is a real issue that causes significant stress with employees, now that middle management layers are increasingly disappearing: how can I move up in a company with fewer possibilities to move up? With all those new skill requirements, many wonder if there still is a place for them tomorrow. The added increasing complexity makes it even harder for them to find their way. And so, survival instincts kick in, employees act fear-based and keep on hanging on to their believes that knowledge is power. Employees need to be enabled in knowing how to secure their employability differently. That removes the stress and opens up the opportunity for thinking different about knowledge being power, to making their colleagues successful by sharing knowledge.
ENABLE YOUR ORGANISATION TO CLOSE ITS SKILL GAP
L&D, in its current form of a knowledge distributor, has turned that department into a bottleneck for increasing the pace of skill development and with that also organisational performance. The sheer speed of new knowledge that needs to be fed into the organisation requires an increase in L&D workforce that no CEO can sign off on. Most L&D departments hold beliefs that didactics are critical to their success, that only L&D knows how to train others and L&D knows best what training the company needs. To do so, they built competency maps and 5-year skill roadmaps. The problem there is, that often line managers can’t predict their necessary skills much beyond a 1- or 2-year period in many industries. That is due to the fast-changing market conditions. An exception here are companies that operate in very slow-moving markets, often due to extensive regulations. Though the L&D departments in these companies face the same resource and budget issues. Looking at this problem from a systematic view, L&D is a bottleneck in being the sole knowledge distributor. Therefore, it needs to transform itself from being a knowledge distributor to being a knowledge distribution enabler of the organisation. Or said differently: L&D should enable the organisation to close its skill gap.
GETTING THE TRANSFORMATION TOWARDS A LEARNING ORGANISATION STARTED
I recommend first reading the Bersin report “High-Impact Learning Organisation – maturity model and top findings” to find out where you are today on an organisational level. Discuss this inside your L&D team to kick-off the team internal transformation process. Reflect on where you stand, where you could go and what that would mean for you as a team. In parallel, discuss your findings with your CEO, CHRO, CFO, COO and CTO. These five will benefit the most from moving towards a learning organisation and can be the helping hand to convince your sales leaders when the time is right.
Setup a few explorative workshops with the C-Suite and critical influencers on management and employee level. Find out what the business wants to achieve (revenue, margin, NPS, etc.), how they want to accomplish that (restructuring, innovations, etc.) and what is blocking them to do so. Of course, there will be a collection of topics where L&D can’t contribute or influence, but this will help build up a better understanding within L&D of what is vital to the business. These are then, in essence, the framework conditions in which you, as L&D department, need to find a workable solution.
This workshop series is not so much about finding the best solution, but more about building up a new working relationship with the C-Suite, stakeholders and influencers, building up a deeper understanding of business requirements and learning what type of priority learning has for them. After all, you can have the best ideas for transforming your L&D department, but without the buy-in, there is no point of even starting to transform. Or, if you find out that learning at present has a very low priority for the C-Suite, figure out when it can become an agenda item for them. This helps you gain a better understanding of the organisational dynamics and what you as L&D can do to make business more successful. The next steps are to create the new vision, business model and operating model. More on that in future posts!