Kerr is one of the first corporate educators to hold the title chief learning officer. Named thus when he approached former General Electric (GE) boss and Chief Executive Officer Jack Welch, Kerr said to Welch, “‘I’m going to be a CEO (chief education officer) just like you.’ (Welch) said no and came up with the title chief learning officer. It’s not a trivial difference,” Kerr said. “If you think of yourself as an education officer or a knowledge officer, the important stuff becomes the knowledge itself, whereas if you think of yourself as a learning officer, then your client is the person doing the learning.”
After seven years at GE, most of which he spent at the helm of GE’s Crotonville executive development center, Kerr joined Goldman Sachs in March 2001. He immediately began work to expand the distinctive Goldman Sachs culture at Pine Street, the learning arm of the company that touches some 2,500 of Goldman Sachs’ 20,000 global and domestic employees. A great bulk of the training is done in the divisions. Pine Street gets the smallest share, but has responsibility for the highest level.
Goldman Sachs values its clients’ interests first, and the culture emphasizes integrity, excellence, innovation and teamwork. Kerr works to help the executives he trains at Pine Street develop their leadership skills and professional expertise in an environment that encourages mobility. “The challenge here is, how do you build in substitutes for the easy mobility of a GE, or how do you augment the powerful challenges and learning that these guys get because they do important work here. How do you build in experiences that take them outside the comfort zone, that will stimulate the breadth of experience that they won’t get if they stay within their area of expertise?” Kerr asked.
One key way Kerr has enhanced executive development is to create programs specifically for vice presidents and managing directors that encourage experiential or action-based learning. The programs, which last 12 months for VPs and nine months for managing directors, feature tailored stretch assignments at the supervisor, division and firm-wide level. All assignments are structured to provide meaningful experiences that go beyond daily work duties, as well as look at different challenges, opportunities to contribute to the firm and ways to gain visibility to senior executives. Goldman Sachs invests heavily in performance reviews, evaluations and an executive coaching program.
Investing in training is often critical to employee development, Kerr said, yet the financial services industry frequently under-invests in its human assets. “It’s very odd to me. The assets walk home at night. Why wouldn’t financial services lead the way in training? If people are your most important asset you ought to develop them,” Kerr said. “If you’re trying to get people to stay, and there are always retention issues since you’re in the same neighborhood as your competitors, some firms throw money at people. Nobody turns down the money—they’re happy to get it—but money is the ultimate commodity. It’s Goldman’s philosophy that not only do people have to be developed, it ends up being a huge competitive advantage.”
Quick to give credit to his team for any success Pine Street programs enjoy, Kerr is notably proud of the internal organizational team development at Goldman Sachs. “Some of the tools we were offering our clients people wanted to use internally, like change acceleration process—change as a core competency at the firm,” Kerr said. “The world is so unpredictable, it’s almost impossible to plan for it, and if you can’t plan, then how do you set inventory, how do you do budgeting, how do you do anything? Can you build adaptation and flexibility as a core competency of your organization? Example, two divisions merged. There was two of everything. We ran an exercise, put down roles and responsibilities, did some brokering and honest communication. I’m quite proud that a derivative of our client work (means) now we’re awash in opportunities. We can barely cope with the demand. There’s a stereotype of hardheaded businessmen and women of the financial service world, but they’re really interested in team development, realigning their mission and rewards and so forth.”
Kerr counts Goldman Sachs’ nonprofit program among his greatest successes. “Goldman has a rich tradition of public service. It gives a lot to contributions; it has people do community team works; the leaders of Goldman have traditionally gone on to public service, etc.,” he said. “But it wasn’t as easy for the younger, newer managing directors to get onto these nonprofit boards, so we have the Goldman Sachs Foundation (GSF), which is wonderfully connected. GSF and Harvard partnered to create a program on being a more effective board member. It was a two-day program; they paid their own way. These people are moving onto boards and trying to make a difference.”
In an effort to expand Pine Street’s action-based learning model, Kerr has created courses jointly with executives and clients. “If you don’t have a lot of natural mobility in a firm of specialists, you’ve got to find artificial ways of giving people a breadth of experience outside of the setting in their daily jobs,” Kerr said. “They’re sitting in a room with their colleagues and clients, one-to-one relationships, enriching. We always teach the Goldman leadership values and business principles and all that, but here’s our people listening to very honorable, productive, effective organizations who have totally different paradigms and models and ways of doing business, and it’s really fabulous learning. I think it’s an essential way to help Goldman people learn, and I hope it also helps solidify relationships with our clients. This was something I brought with me because I have a real passion for it, so you can put my name next to it, but it was my people that developed it.”
E-learning has played a small part in the Goldman Sachs learning strategy. Pine Street offers graduates access to online materials on regulatory compliance and ethics issues, and online course follow-up materials and articles, but Kerr said Goldman Sachs has the technical capacity to offer more. “E-learning has been underused because you have leaders in the classroom; it’s much more important for the people that come to press the flesh,” he explained. “Pine Street is leaders teaching leaders. We plan to use (e-learning) more, but we believe in a blended approach. We use a blend of what we think is effective: role-plays, case studies, mock debates, etc.”
Kerr uses Kirkpatrick’s Four Levels of Evaluation as a metric to gauge course effectiveness. “Research shows that people’s satisfaction predicts whether they would return and whether they would recommend it to others. We use that. The second level is, did they learn it? We seldom do that at Pine Street,” Kerr said. “Level three is the most interesting to us—are they using it? Frequently at Pine Street we have pre-measures in advance of a course. We’ll give out surveys to the participants who are about to come in and we’ll say, ‘Please give this out to three, four, five, six people who know you.’ They could be subordinates, bosses, peers, clients. We ask how often these people are seen exhibiting the behaviors that will be taught in the course. Whether it’s risk-taking, use of information, calling meetings, leading, participating, delegating or empowering. Then three or four months after the course, out come the same questions to the same people and we’re looking for changes in the area that the course would predict. Now, a psychometrician would say that’s correlation, not causation, you can’t prove it, but if we get people who change their behavior in the way the course was teaching them, we’re happy to take credit.”
Kirkpatricks’ Level 4, documented cost-savings or productivity en-hancements, and direct ROI elicited some fairly strong feelings from Kerr. “Those are always silly,” he said. “If you’re taking leadership decision-making–what we do–you can’t prove that at the end of our course people are making 9 percent better decisions and saving $3 million. The respect for Pine Street, the love of learning, the fact that the leaders are involved—that’s one side benefit of leaders teaching leaders. They’re so close to us, they don’t come after me for metrics. Right or wrong, they believe they would know. They’re getting feedback all the time. The clients are here all the time; the senior leaders are here all the time. I’m immunized from that Mickey Mouse stuff. The reason I’m so disparaging of it, it’s really hard to do. It leads to gaming and political behavior and absurdity. People like Pine Street. It’s gotten as favorable a reaction as it’s got a right to get. We have brought some useful things to the firm. I ask more rigorous questions of myself and of my colleagues at Pine Street. What are you doing compared to what needs to be done? Is your pace adequate? I am more critical than my leaders. I think they’re pleased; I hope they are. There’s a lot we still want to do.”
Future training plans include delving deeper into the e-learning realm, building courses online and using simulations in training. “I love simulations,” Kerr said. “We’ve underutilized games and exploring leadership training through simulations. We’re going to get into that in 2005 because it fits into the Goldman culture.”
According to Kerr, the pieces are also in place for the Leadership Acceleration Initiative, which will build a suite of courses, or leadership and management curriculum, around leadership transitions in a logically sequenced life-cycle approach to training and development. People will get training as they acquire new challenges. Learning will connect mentoring, networking, formal training and stretch assignments.
Name: Steve Kerr
Title: Managing Director and Chief Learning Officer
Company: Goldman Sachs
Successes: Within the past 12 months Pine Street, the learning arm of the company, has successfully completed:
- A one-year course for 85 VPs and their managers that included classroom training, coaching and three stretch assignments, all driven by personal action plans prepared jointly by participants and their managers.
- A program on board effectiveness (jointly with Harvard Business School and the Goldman Sachs Foundation) for 30 managing directors seeking to join nonprofit boards. The program included a day-and-a-half session at Harvard during which each Goldman Sachs participant was accompanied by the executive director of the nonprofit organization he or she was joining.
- Several leader effectiveness programs whose attendees were Goldman Sachs clients and their counterparts at Goldman Sachs. More than 150 clients have taken part in these programs.
Learning Philosophy: “For most people, experience-based learning is of greater value than classroom-based instruction. Developmental feedback, interpreted with the aid of experienced coaches, is also of great value. To be most effective, classroom instruction should be organized around the transitions that people experience as they progress in their careers.”
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