Training: The Best is Business-Driven

Many internal training organizations must really start to reinvent themselves––or face the prospect of significant downsizing.

CEOs and CFOs are now demanding investments in training deliver maximum value to the organization.

Translated, this means training budgets are being put under the microscope. Training costs––their identification, measurement, and control––are an area of concern because it's difficult to monetize the return on training investments.

Yet training costs, after all, do not exist by themselves. They are always incurred––in intent at least––for the sake of a result.

What matters therefore is not the absolute cost level but the ratio between training dollars spent and their results. But––and this is a big “but”––results must be business- driven.

There are many different ways to define what is meant by business-driven results.

For the purposes of this article, we will discuss two specific ways––namely:

(1) Quantifiable measurements related to business processes and;

(2) The use of strategy maps to identify the skills needed to carry out an explicit corporate strategy

Monetizing Training Results: An Example and Its Lessons

Oral and written mastery of a subject is important. But from the perspective of the organization, the only real test of training is its impact on business performance.

Here's a concrete example. And we'll have you as the old statement goes, "walk in another's moccasins.”

Let's assume you are a manufacturer of Styrofoam coffee cups used in vending machines. Lucky you!

You want to improve the quality of your coffee cups. Why? Because the costs associated with scrap, return shipments, field service calls, and customer complaints from the vending companies are devouring your profits.

Careful study reveals four major quality problems with respect to your Styrofoam coffee cups. The problems can be classified as:

• Coffee cups that are too large (this results in customers feeling cheated, that is, they are getting less coffee than expected)
• Coffee cups that are too small (this results in coffee overflowing the cup…making an unwanted mess)
• Coffee cups withcracked lips (this results in a coffee cup looking like it was chewed by a rodent)
• Coffee cups with pin holes at the bottom of the cup (this results in a leaking coffee cup)

These are the performance measurements that must be improved. Measurements define what we mean by performance. They largely dictate where efforts should be spent.

Let's further assume that, for whatever reasons, far too many of your coffee cups have one or more of the above-mentioned quality defects.

Greatly simplifying, you need to dramatically reduce the percentage of coffee cups with quality defects.