L&D essential in economic crises

by 14 Oct 2008

INVESTMENTS IN business-focused learning pay off better than most structural and process changes that organisations have attempted in recent years in order to improve performance.

A recent report from the UK has found that any organisation that is poor at learning will not survive long in a world in which changes in operating conditions are accelerating, and the ability to cope with the unexpected is increasingly critical.

“Particularly in tough economic times, a sign of a survivor business is that it will continue to invest in building capability – from R&D to L&D,” said Andrew Lambert, director of the Corporate Research Forum.

“This is worth remembering as organisations go through the usual process in a recession of combing through their finances to identify cuts. Historically, marketing and training have frequently been singled out for attention.”

In tough economic times, Lambert said, there is a tension between spend on activities that don’t necessarily have an immediate return on investment, because their effects are long-term, and the fact that marketing and investment in capabilities are essential for any recovery strategy.

“The wise course is not to adopt knee-jerk and blanket cuts, but to be selective. Perhaps there are some L&D activities that are a nice-to-have, and which can be shelved or dropped. The sharp focus on value that occurs in a recession can be beneficial,” he said.

The report found that line managers – including top management – generally need a considerable amount of help in becoming effective facilitators of workplace learning – indirectly through their choices and directly as coaches. Relatively few are “naturals”.

Senior leaders must act as role models for learning, in leading by example and taking an active part in both leadership development and talent development, according to the report.

“Business-focused L&D inherently starts by saying ‘What forms of development enhance performance and capability?’, rather than just taking training and trying to fit that to people’s needs,” Lambert said.

“The reality is that experiential learning is far more valuable than most course-based activity, and thus L&D needs to be focused as much on what people learn at work as when they step back and undertake some formal learning activity.”

In addition, as with any other part of an HR function, L&D needs to be cognisant of business strategy, influence this where necessary and tie in its activities clearly to organisational goals. This is a far cry from the old training department and requires far higher levels of competence, according to Lambert.

“This includes getting smarter about measurement and evaluation. Gathering evidence on what works and doesn’t should be a priority for L&D professionals, and the report points to the work already done in this area,” he said.

Interestingly, the report found that some L&D functions were becoming detached from HR. Organisations that are very strategic in their learning approach, and particularly focus on learning’s contribution to transformation, have distinguished between classic HR functional focus on the present and the focus of organisational development and L&D on future performance and capability.

Learning & development: what do you keep?

• Investment in the talent cadre, however defined. If an organisation stops investing here, this is a sure-fire signal that the organisation is struggling. It may find that the talent – typically more mobile than other employees –chooses to go elsewhere at the first opportunity.

• Second, senior executives have a tendency to value coaching higher than, say, leadership courses, partly because of the tailoring to their needs. Many feel particularly in need of the facility to discuss the challenges they face in a recession with a skilled coach. So, while not every organisation may maintain its spend on coaching when times are tough, our research reveals that it is more likely to be retained as a priority, particularly if the firm has been rigorous in ensuring that coaching is clearly linked to organisational as well as personal goals.

• Third, core skills training that clearly supports revenue generation or loss prevention – because these are exactly what an organisation needs to get through a tough patch.

• Investment analysts are criticised for being somewhat shallow and simplistic in their examination of company investment, particularly in terms of human capital measures. They could do well to enquire in some detail about the approach of an organisation regarding L&D spend, in order to assess company survivability and potential for recovery.

Source: Corporate Research Forum

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