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Professionally my circles encompass both the competencies traditionally linked with a CLO (i.e. strategy, outsourcing, etc.) and the world of progressive learning & development (i.e. communities of practice, action learning, etc.). 

Given all of the research and data out there showing the impact of the more informal approach to learning it’s ironic to me that these two worlds rarely overlap…but they don’t.

That was reinforced yesterday when Trainingoutsourcing.com announced the “2007 - Top 20 Companies in the Training Outsourcing Industry.”  When you look down the list they are mainly software-based training content providers.  This is no fault of trainingoutsourcing.com - they are clear on the metrics that it takes to make the list.  I’m wondering about the buyers.  If 80% of learning comes from the informal side of the house, where are the outsourcing purchases associated with it?

Granted, it is the ‘training’ outsourcing industry and not ‘learning’ outsourcing but that should just be semantics in 2007.  It seems that, regardless of the data that shows what’s effective, people want something tangible.  The components of informal learning are a little grayer, a little messier, tougher to predict and certainly more difficult to price appropriately.  It is possible though.  I know because I’ve done it. 

Oh well - forgive the rant because this is actually one of the things that I enjoy about being in the field that offers the more progressive approaches to something.  It’s not an easy sell and I like that.  I feel like we are the little guy (looking at the list linked above I’d say that’s an appropriate feeling) and there’re many mindsets to be changed before our wares are in the mainstream…and I wouldn’t have it any other way.

This month’s Big Question on Learning Circuits Blog is

What questions should we be asking? 

In a former life I worked for a company whose business model was structured around a two-day workshop.  Although in the time since I’ve been there I have learned that a two-day workshop can usually be just a cog in a larger wheel (if it’s to be effective) that two-day workshop was excellent.

One of the most popular modules was one called ‘Effective Questions.’  In it, the facilitator had participants experience the difference between two different questions that could be asked in the same scenario (i.e. Why are we so behind schedule? vs. What can we do to get back to our projected timeline?)

An effective question can leave a person to stew on it for hours or days only to have an answer pop-in unexpectedly.  I feel this is what the learning and development field should strive for in their communication to business executives.

Some examples would be:

•  What knowledge, skills and attitudes are necessary to execute on your strategy? 
• How can we more effectively diversify your learning ‘portfoilio’ so that the maximum return is realized?
•  What are the various futures that may be in store for this organization?  What are the common denominators between those potential futures that we can align learning and development with now?
• How can your incentive programs be better aligned with the behaviors required for success?  What can learning and development then do to make it easier for people to receive those incentives?
• How can your current training expenditures be adjusted in order to maximize the net present value of these allocations?

I feel that learning and development needs to continue to show that we think like business executives in order to get the ear of business executives.  Through well targeted questions, executives will convince themselves of the value of their workforce having the skills, attitude and knowledge needed to succeed.  At that point, we in the learning and development field can banter as to the specific methodology to use - won’t that be a good problem to have?

Yes - billion. 

This was the headline of Training Magazine in their December 2006 issue.

I have a quick  question.  If, as countless studies and experts have proven, formal training accounts for only 25% of the information that people need in order to do their job (while informal learning provides the remaining 75%) does that mean that $168 billion is earmarked for informal learning?

I doubt it.

In a Chief Learning Officer magazine article titled “People, the Neglected Part of Technology”, author David Miller explains his perspective on how learning and knowledge management should be integrated with the implementation of new technologies, such as a new ERP package (i.e. SAP).  He even provides a specific statistic from the Gartner Group that says, “when 17 percent of the total program budget is spent on these initiatives the chances of success go up significantly.”

I found David’s points to be applicable beyond tech implementations and to all of organizational learning.  I like reading articles where I find myself subconsciously nodding my head in agreement as I read and that happened numerous times throughout this article.

David calls on the combination of the usuals for learning such as “telling the learner, showing the learner and letting them try” and adds to that the elements that will support the more informal channels that allow people to build on what was formally designed for them.  He suggests strengthening the network, cultivating communities of practice and providing just-in-time access to information that people can call upon at the moment it is needed. 

Doing the above creates what David calls a “culture of shared experiences” allowing organizations to capture the often elusive tacit knowledge of how work really gets done.  This results in people having access to the information they need as opposed to “sterile, clinical information found in manuals and training courses.”  This concept can be applied to any training, regardless of the topic.

Follow David’s advice and you’ve got the diverse learning and development portfolio that will do more than just allow you to implement technology effectively - it will put you on the fast track to being a true learning organization.  How will you know if you’ve done it correctly?  David advocates the use of a balanced scorecard for establishing and assessing the metrics associated with the learning initiative (nod, nod).

A dollar today is worth more than a dollar tomorrow.

This is the basic underpinning to the concept of Net Present Value (NPV) in finance.  Given the option, businesses are going to want their money in their own hands until the last possible second.  The more time a company can hold on to their money, the more of a return the money can generate for the company. 

This is the reason for some magazines offering subcriptions that steadily reduce as the years go on if you pay for them today.  They want that money now!  Even if it’s less than the full subscription you would have paid in three years, they would rather have it today to improve cashflow, invest, etc.

We discussed NPV in the Level 6: Beyond ROI class while I was at the CLO Institute in January.  Ever since then I’ve been playing with the idea of NPV and how it relates to methods of learning that don’t fall under the category of ‘traditional.’ 

I decided to write after reading the July edition of Education Signals.  One section of the report was about the ’Top 20 Companies in the Training Outsourcing Industry’ that is compiled by TrainingOutsourcing.com.  In it, the authors share the following data points:

“The largest percentage of revenue from the leading players came from content development (35%) and training delivery (30%) services.”

Content design/development obviously comes at or near the beginning of a training outsourcing initiative.  That means that over 1/3 of the money of contracts is in the hands of the training supplier soon after the project begins.    

If I were in a position to be hiring a training outsourcing firm, I would look for a deal where the fees weren’t so front-loaded.  I would want to keep my money as long as I could and let it make more money for me. 

Enter informal learning (i.e. communities of practice, blogs, wikis, podcasts, etc.).  As illustrated in this post from Jay Cross, and as others have been preaching, much of learning doesn’t come from ‘content.’  It comes through the informal and unscheduled channels of an organization.

Informal learning may have an additional advantage.  Since there isn’t near the level of design/development required for informal methods as there is for more formal events such as workshops and e-learning modules, a company that was buying these services from an outsourcing company would pay less up front.  This allows them to keep their money longer and let it make more money for them.

Although I’ve only cited one report that I’m basing this post on, I came from the instructional design world.  We charged crazy fees (usually way more than 35% of the total contract) for design/development at my old firm and that was the first thing the client paid for.  I also realize that there is a need for some structured content in a company’s learning and development plans - I just think it should be provided in minimal chunks.

I’m suggesting services that would be a double win for companies purchasing training outsourcing.  With more informal elements in the mix to create a more diverse learning portfolio the client would not only receive more effective learning and development, they would pay less up front and get to make money from the money that they would have spent on instructional design and development fees.

Note:  I’m consciously not addressing the area where training outsourcing firms make the second most amount of money - the 30% from delivery of training services.  Informal learning, by nature, requires less delivery than its traditional counterpart.  For this post, though, I wanted to emphasize the benefits of not paying design/development fees up front.