The top-line findings of Freemont Learning’s recently completed comprehensive “State of Management Development” study — which is based on in-depth interviews with CLOs of 50 large global companies — are not surprising. Budgets are down — way down. Management development budgets were down on average 22 percent year-over-year.<br /><br />At the same time, internal demand was up significantly. In fact, 75 percent of CLOs reported that managers and executives are asking for more help even as management development budgets are being slashed. Specifically, managers and executives are asking for support in leading their organizations through the dramatic and often uncomfortable changes that have resulted from the current recession.<br /><br />So how are CLOs responding to the dual challenges of decreasing budgets and increasing demands, and what do these trends mean for 2010?<br /><br /><strong>Six Ways of Doing More With Less</strong><br />Freemont Learning found CLOs employing a combination of pragmatism, focus and innovation in response to challenges. There are six management development approaches that distinguished them in the course of the research.<br /><br />1. Focusing on key managers: Forced to rationalize, many CLOs reported they were focusing more on high potentials and new managers, to the exclusion of broader groups of seasoned managers. When asked to identify the management development program they were most protective of, 39 percent of CLOs identified a high-potential program and 32 percent identified a new manager program, but only 2 percent identified a program for a broad group of experienced managers.<br /><br />2. Becoming their own general contractors: Many CLOs said they were bringing more delivery of management development programs in-house or only outsourcing the parts of programs that they must. What’s driving this? Certainly budget is a concern, and also the desire of CLOs to keep their own staff fully utilized, but that’s not the whole story. When CLOs were asked to rate their company’s satisfaction with programs delivered by different groups — business, schools, training firms, independent consultants and internal trainers — virtually no difference in overall satisfaction was found. All groups averaged right around a four on a one-to-five scale. The high satisfaction with internally delivered programs has given CLOs the air cover they need to push more delivery internal, even for higher-level executive groups.<br /><br />3. An increase in blended learning: Finally, the industry may be seeing an end to the aversion toward e-learning for management development. While many CLOs expressed disappointment with previous e-learning experiments for management development, it appears they are starting to figure it out. Forty percent of CLOs said they are now employing blended learning for new management development programs. Examining the designs of these programs revealed they were often quite sophisticated, employing not just synchronous and asynchronous e-learning, but also online moderated, manager-only communities, on-demand rapid response virtual sessions and user interfaces to assist managers in finding what they need.<br /><br />4. Trading group development for individual development: One casualty of the budget cuts, as mentioned previously, is traditional management development programs for broad groups of experienced managers. To accommodate the development needs of these suddenly left-out managers, CLOs are devising low-cost individual development options, such as in-house coaching and mentoring and even homegrown surveys. While not ideal, these options are certainly better than nothing.<br /><br />5. Creating suitcase programs: CLOs are devising suitcase programs where they create a curriculum and take it to local offices around the globe. The programs are delivered by local trainers and local leaders, sometimes with one or two people traveling with the program. Some suitcase programs also employ videos of senior executives and videoconferencing.<br /><br />6. Continuing to experiment: One encouraging finding of the study is that it seems budget cuts have not cut too deeply into CLOs’ willingness to take risks in program format and design. To cite an example, the CLO of a major travel company decided to completely revise her flagship management development program. Instead of a weeklong classroom program filled with business school case studies, she now brings 25 high-potential managers at a time to a Costa Rican village that has aspirations to become an ecotourism destination. The cohort’s members work closely with the villagers, applying their skills in marketing and finance, and also using their capacity for physical labor to help the villagers create the needed infrastructure. The cohort then mentors the next cohort, which will be sent to a different village on the island. The whole program is coordinated by a unit of the company that organizes volunteer travel programs for its clients. It’s a creative program design, leveraging a company’s core capabilities for use in management development.<br /><strong><br />Looking Forward</strong><br />Most CLOs thought that some of the budget cuts and their corresponding actions were temporary responses to economic conditions. However, many also thought that things will not be going back to the way they used to be anytime in the near future. Managers, and even executives, will be seeing much more of company training rooms and less of golf resorts in the future.<br /><br />Perhaps more importantly, CLOs are redefining their own roles in response to these cutbacks, and it appears this repositioning will be lasting and positive. There are four emerging roles of the CLO to look for in 2010 when it comes to management development.<br /><br />1. Building broader internal capabilities: Throughout the past several decades, many CLOs focused more on partnering with business schools and training firms for management development than actually designing and delivering these programs themselves. This was at least partly out of necessity. When a company is hiring and promoting large numbers of managers every year, the CLO has no choice but to outsource much of the management development operation. It’s likely that CLOs will use the current pause in hiring and promotion to bring more of the actual design and delivery of management development in-house. While this trend will challenge some CLOs and their staff, in the long run it will result in more agile and efficient learning organizations that are more in tune with the needs of their internal clients and better able to craft solutions to meet those needs.<br /><br />2. Fully embracing technology: For many companies, management development is something that is still done primarily face to face. This method will not be going away anytime soon, but leading organizations will be creating management development offerings that make full use of learning technologies. As competition for management talent begins to heat up again in 2010, look for some forward-thinking CLOs to begin using their technology-based management development strategy as a recruiting tool.<br /><br />3. Operating as a just-in-time organization: Management development programs are often planned many months in advance: the annual executive off-site will be in January; the high-potential program will launch in March; the new managers program in August. While there are clearly benefits to this sort of long-term planning, the last year has demonstrated that facts on the ground can change quickly and precipitously. The study revealed that many CLOs struggle to adapt to the rapidly changing needs of the organization. In the future, it is likely leading learning organizations will create a rapid response capability to address urgent needs. A sudden change in business conditions, a new acquisition and a new technology innovation all can have dramatic and immediate impact on a company’s management development agenda. In 2010, look for CLOs to form rapid response teams that can mobilize new management development initiatives with only weeks’ notice.<br /><br />4. Becoming a connector and an aggregator: Managers and executives must be able to see around the corner to anticipate trends, opportunities and threats. That’s part of the job description and often what separates a top manager from a middle-of-the-road one. The issue is that most managers do not have the time to simultaneously perform their day-to-day responsibilities and investigate the various trends that may impact their business. CLOs may fill this void by vetting and finding the right thought leaders and experts for the management team. Sometimes, for example, it might be as straightforward as finding an expert on doing business in Malaysia for a management team considering offshoring part of its operations to that country. Other times, for example, it might mean offering generational mentors to managers wanting to understand the behavior of the multiple generations of consumers they serve.
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