Guess what? You’re spending a lot more money on training and development than you thought. And a lot of it is being wasted. Let me explain.
Corporate training is one of the few business functions that happens everywhere all the time. Whenever a new employee joins your team or a new project starts, there is a need for training. So a manager assigns someone to be the trainer. That person develops a course, buys a tool or maybe even hires a training vendor. The next thing you know you have dozens of little training groups across your company.
We know this is true. During the past six months my company has worked with three different companies to rationalize their training spending, and the findings are astounding. One global manufacturing company found more than $130 million in “unrecorded” training spending in the business units. The corporate training department knew about much of this, but had no idea of the problem’s magnitude.
I just spent a day with Dave DeFilippo and Deborah Lorenzen, the new CLO and chief operating officer of BNY Mellon’s newly established corporate university. DeFilippo was recently appointed as the CLO and he reports directly to BNY Mellon’s president, Karen Peetz. Part of his mandate is to bring the company’s learning into a single operating model. The first part of his strategy is to bring together leadership, operational training and all curricula under one roof.
DeFilippo and team have already found 34 different management programs — many overlap or are inconsistent with each other — more than 9,000 courses and a wide variety of operational training staff who report to local line management doing fantastic things. Under DeFilippo’s leadership these groups will be streamlined to save money, and more importantly to create better alignment, focus and business results.
Years ago, my company published a simple model to help rationalize training — we call it the Training Investment Model — based on a concept from consultant Tom Hilgart. This model (Figure 1) lets you easily look at all your courses and group them into “change the business” vs. “run the business.” If you look at the grid, you may find too many things in the upper left and not enough in the upper right.
Without an integrated learning architecture, each trainer or instructor may reinvent the wheel. They use their own tools, language, tracking process and often their own competency models. Bringing these programs into an integrated model can be powerful. Not only will training be more consistent and use standardized tools, there will be more money to spend on the “upper right” strategic programs.
Last year the U.S. training industry spent more than $70 billion on programs, staff and technology, and our businesses are suffering from one of the biggest skills gaps we have seen in decades. Consider what we could do if we rationalized all of that spending and created an integrated plan. Now is a good time to look at training across your entire organization and bring it together. You’ll not only save money, but dramatically improve your business impact.
Josh Bersin is founder of Bersin, now known as Bersin by Deloitte, and a principal with Deloitte Consulting LLP. He can be reached at editor@CLOmedia.com.