lts. We can be doing the best training in the world, developing the best classes, bringing the best instructors, and having the best content, but if it doesn’t make a difference for the business, then it really is irrelevant.
I often tell people about benchmarking, because benchmarking is a great tool that almost all training organizations use at one time or another. You may look at a benchmarking report and say, “Wow, the average company in my industry spends $800 dollars per employee per year and I’m only spending $400. So, I must be under-spending and I should be going to my management and showing them this benchmarking report and making the case for doubling the budget.” And what I would say is if you’re spending $400 and your benchmarks are spending $800 and you’re getting no value for the $400 you’re investing, you’re probably overspending; you’re overinvesting. On the other hand, if you’re getting $30 back for every dollar you invest, you probably ought to quadruple that investment, not just double it. So when we do benchmarking, we have to make certain that we do it in the context of value creation. And that’s why I say it’s not about training, it’s about results.
So let me just shut this down with one final observation. There’s something Ronald Regan use to say all the time, “This tide raises all ships.” And I think that’s the case for training and what happens when we transform ourselves from a functional orientation to a value creating machine that in fact this tide does raise all ships. For the training organization, it means that the people in that organization are doing work that makes a difference for the company they work for and that they leave at the end of the day saying they’ve made an impact and feeling like they’ve made an impact. I’m not certain that everybody can say that today.
The second thing is for the employees of those companies where we’re doing really terrific training on important business issues. The employees find that their work is more rewarding, it allows them to do things that are important to the company and the business, their skills are being built so that they perform at much higher levels, and they also leave at the end of the day feeling like they’ve made a difference.
And lastly, for the executives who fund all this stuff that we’re talking about, when they look at it, they have confidence (unlike the lack of confidence that many of them have today) that the money they’re putting into developing their people is in fact making a difference for the business and for their people. So, in that regard, “this tide really does raise all ships.”
With that, I welcome your comments. I would appreciate your feedback and maybe another day, there will be another blog.
click on the link below for the podcast version of this blog post.
Smoke Screens about Outsourcing
Let me just call up smoke screens, again, about outsourcing and I’ll tell you why—this is an interesting one that has dual smoke screens. The next one is that “I lose control.” I talked about this earlier but let me be just a little bit more specific.
The argument goes like this. If I outsource parts of training to an outsourcing provider or a third-party provider, I will lose control. And that’s as stated by senior training leaders. I take there’s a real issue with that.
• First off, in most training organizations, what we know is that there’s more training going on outside than inside the training organization. That does not sound like control to me. The opportunity is to get one’s arms around the total spend, direct and indirect, and manage the total spend, which we often find is not going on. There’s a hidden spend in training that’s 2-4 times more than the direct spend, and it’s an issue because it’s unmanaged. I have said for many years that training inside an organization is the largest unmanaged spend companies have, particularly big companies. If you think it’s a $1,000 per employee/ year, it’s actually $4,000 per employee/year. So, that’s the real spend, that’s what you ought to be managing, and that’s what nobody’s ma