Strategic Employee Training

By Noe, R.A.

Edited by Paul Ducham

EMPLOYEE TRAINING AND LEARNING

At Walt Disney Company, over the last 10 years training has evolved to include flexible learning delivery, customized learning experiences, and collaborative development with internal training customers.Disney has moved from an instructor-led training approach to an approach that uses face-to-face instruction (classroom, on-the-job) combined with online instruction (game simulation, e-learning). This matches Disney’s business strategy, which has always emphasized matching the appropriate technology and methods to the audience regardless of whether the audience is a guest or an employee (cost member).

    A single training event or program is not likely to give a company a competitive advantage because explicit knowledge is well-known and programs designed to teach it can be easily developed and imitated. However, tacit knowledge developed through experience and shared through interactions between employees is impossible to imitate and can provide companies with a competitive advantage. Pixar’s development of successful computer-animated films such as WALL-E (a robot love story in a post-apocalyptic world of trash) and Ratatouille (a tale of a French rat who longs to be a chef) requires the cooperation of a team of talented directors, writers, producers, and technology artists who may be located in different buildings, have different priorities, and speak different technical languages. Pixar follows three operating principles: (1) all employees must have the freedom to communicate with other employees, regardless of their position or department, (2) it must be safe for everyone to offer ideas, and (3) the company must stay close to innovations occurring in the academic community. Pixar University offers a collection of in-house courses for training and cross-training employees within their specialty areas. But it also offers optional classes that provide opportunities for employees from different disciplines to meet and learn together. Screenplay writing, drawing, and sculpting are directly related to the business while courses in Pilates and yoga are not. The courses are attended by employees with all levels of expertise— from novices to experts—which reinforces the idea that all employees are learning and it is fun to learn together.

     The emphasis on learning has several implications. First, there is a recognition that to be effective, learning has to be related to helping employees’ performance improve and the company achieve its business goals. This connection helps ensure that employees are motivated to learn and that the limited resources (time and money) for learning are focused in areas that will directly help the business succeed. Second, unpredictability in the business environment in which companies operate will continue to be the norm. Because problems cannot be predicted in advance, learning needs to occur on an as-needed basis. Companies need to move beyond the classroom and instead use job experiences and Web-based training to teach employees skills while they focus on business problems. Third, because tacit knowledge is difficult to acquire in training programs, companies need to support informal learning that occurs through mentoring, chat rooms, and job experiences. Fourth, learning has to be supported not only with physical and technical resources but also psychologically. The company work environment needs to support learning, and managers and peers need to encourage learning and help employees find ways to obtain learning on the job. Also, managers need to understand employees’ interests and career goals to help them find suitable development activities that will prepare them to be successful in other positions in the company or deal with expansion of their current job.

      Creating and sharing knowledge refers to companies’ development of human capital. Human capital includes cognitive knowledge (know what), advanced skills (know how), system understanding and creativity (know why), and selfmotivated creativity (care why). Traditionally, training has focused on cognitive and advanced skills. But the greatest value for the business may be created by having employees understand the manufacturing or service process and the interrelationships between departments and divisions (system understanding) as well as motivating them to deliver high-quality products and services (care why). To create and share knowledge, companies have to provide the physical space and technology (e-mail, Web sites) to encourage employee collaboration and knowledge sharing. Ford Motor Company has communities of practice organized around functions. For example, all the painters in every Ford assembly plant around the world belong to the same community. At each plant, one of the painters serves as a “focal point.” If a local painter discovers a better way to improve one of the 60 steps involved in painting, the focal person completes a template describing the improvement and its benefits. The template is submitted electronically to a subject matter expert located at Ford headquarters, who reviews the practice and decides whether it is worth sharing with other assembly plants. If so, the practice is approved and sent online to the other assembly plants. Ford has collected $1.3 billion in projected value for the company and has realized over $800 million of actual value from its communities of practice.

     As companies recognize the value of training and development and view them as part of a broader learning strategy, seven key capabilities are needed, according to a survey by Accenture Learning.These capabilities are:

1. Alignment of learning goals to the business goals.

2. Measurement of the overall business impact of the learning function.

3. Movement of learning outside the company to include customers, vendors, and suppliers.

4. A focus on developing competencies for the most critical jobs.

5. Integration of learning with other human resource functions such as knowledge management, performance support, and talent management.

6. Training delivery approaches that include classroom as well as e-learning. .

7. Design and delivery of leadership development courses.

TRAINING LINKS TO BUSINESS STRATEGY

Three factors influence the company’s business strategy. First, the company’s mission, vision, values, and goals help to determine the strategy. These are usually determined by the top management team. The mission is the company’s reason for existing. It may specify the customers served, why the company exists, what the company does, or the values received by the customer. The vision is the picture of the future that the company wants to achieve. Values are what the company stands for. Second, a SWOT analysis (strengths, weaknesses, opportunities, threats) involves an analysis of the company’s operating environment (e.g., product markets, new technologies) to identify opportunities and threats as well as an Internal Analysis of the company’s strengths and weaknesses including people, technology, and financial resources. The business challenges may also represent an opportunity (or threat) to the company. Recall that these business challenges include globalization, the need for leadership, increased value of human capital, change, attracting and winning talent, and a focus on customers and quality. Third, the company has to consider its competition. That is, how will the company successfully compete? The decisions that a company has to make in determining how to compete are shown in Table 2.1.

   Although these decisions are equally important, companies often pay less attention to the “with what will we compete” issue, resulting in failure to reach the goals. This decision includes deciding how human, physical, and financial capital will be used. To use human capital to gain a competitive advantage requires linking the company’s human resources practices (such as training and development) to the business strategy.

     Consider how training contributes to the business strategy at Nokia Corporation. Nokia, the world leader in mobile communications, has over 68,000 employees and net sales of $30 billion. Nokia’s business strategy is to build trusted customer relationships by offering compelling and valued consumer solutions that combine the best mobile devices with context-enriched services (business mobility and Internet). Nokia’s vision is a world where everyone can be connected and feel close to what is important to them. Nokia consists of the following business units: Devices, Software and Services, Markets (management of supply chains, sales, and brand and marketing activities), Nokia Siemens Networks (infrastructure and related services business), NAVTEQ (provider of digital map data for automotive navigation systems and other mapping applications), and the Corporate Development Office (which focuses on strategy and future growth and supports the other units). Nokia wants to create personalized communication technology that enables people to create their own mobile world. Nokia continues to target and enter segments of the communications market that the company believes will experience faster growth than the industry as a whole. As the demand for wireless access to services increases, Nokia plans to lead the development and commercialization of networks and systems required to make wireless content more accessible and rewarding for customers.

    The management approach at Nokia, known as the “Nokia way,” consists of the Nokia values, its organizational competencies, and its operations and processes used to maintain operational efficiency. The company has built its current and future strength on the Nokia way. The Nokia way has resulted in a flat, networked company emphasizing speed and flexibility in decision making. Nokia’s values include “engaging you” (customer satisfaction and engaging with all stakeholders, including employees), “achieving together” (trust, sharing, working in formal and informal networks), “passion for innovation,” and “very human” (understanding that how the company does business impacts people and the environment). Continuous learning provides employees with the opportunity to develop themselves and to stay technologically current. Employees are encouraged to share experiences, take risks, and learn together. Continuous learning goes beyond formal training classes. At Nokia, continuous learning means that employees support each other’s growth, developing and improving relationships through the exchange and development of ideas. E-learning is used to provide employees with the freedom to choose the best possible time and place for personal development.

     Nokia’s top management is committed to continuous learning. Figure 2.3 shows how Nokia links training and development to its business strategy. For example, the business group presidents are the “owners” of all global management and leadership programs for senior managers. They personally provide input into the development of these programs but they also appoint “godfathers” from their management teams. These godfathers participate actively throughout the program and are also designers of program content. Together with the training and development staff, the godfathers help the learning processes in the programs. Most of the programs involve strategic projects (Action Learning) learninpants are responsible for completing. Top managers invest time in reviewing the projects and have the authority to take action based on the project team recommendations.

      The value of continuous learning translates into personal and professional growth opportunities including a commitment to self-development, coaching, learning solutions and training, management training, a vibrant internal job market, and performance management. Employees are encouraged to create their own development plan and use available learning solutions and methods. Coaching with highly skilled colleagues helps employees develop and gives them the opportunity to share ideas and goals with each other. Nokia employees have access to a wide variety of training and development opportunities, including learning centers and the Learning Market Place Internet, which has information on all the available learning solutions including e-learning and classroom training. Through the learning centers, Nokia has integrated the learning activities of all the business groups into one place. Nokia believes that by mixing participants from across business groups, knowledge is created because traditions and experiences can be shared among employees. In addition to formal programs offered in classrooms or on the Internet, Nokia emphasizes on-the-job learning through job rotation and through managers giving their employees challenging new job assignments. There is also a wide range of opportunities for managers to improve their management and leadership skills. The emphasis on the internal labor market encourages employees to improve their skills by changing jobs. Nokia’s performance management process, known as Investing in People (IIP), involves twice yearly discussions between employees and their managers. The IIP process consists of objective setting, coaching and achievement review, competence analysis, and a personal development plan. The entire IIP process is supported electronically. Employees can choose their profile from the company intranet, conduct a self-evaluation, create a personal development plan, and investigate what learning solutions are available at the learning centers.

       Nokia uses a combination of measures to evaluate the value of training. Nokia always asks employees for their immediate reactions after they have completed a program. Other measures include attainment of competence and resource strategy in all parts of the company. Top management believes that the largest benefit of the learning is that employees have opportunities to network, creating more knowledge, reinforcing continuous learning, and creating committed employees.

TABLE 2.1 Decisions a Company Must Make about How to Compete to Reach Its Goals

1. Where to compete? In what markets (industries, products, etc.) will we compete?

2. How to compete? On what outcome or differentiating characteristic will we compete? Cost? Quality? Reliability? Delivery? Innovativeness?

3. With what will we compete? What resources will allow us to beat the competition? How will we acquire, develop, and deploy those resources to compete?

Figure 2.3

STRATEGIC EMPLOYEE TRAINING

Strategic training and development initiatives are learning-related actions that a company should take to help it achieve its business strategy. The strategic training and development initiatives vary by company depending on a company’s industry, goals, resources, and capabilities. The initiatives are based on the business environment, an understanding of the company’s goals and resources, and insight regarding potential training and development options. They provide the company with a road map to guide specific training and development activities. They also show how the training function will help the company reach its goals (and in doing so, show how the training function will add value).

           There is a tendency to have a disconnect between strategy and execution of the strategy. To avoid this, learning professionals need to reach out to managers to ensure that the strategic training initiatives and training activities are aligned with the business strategy and the necessary financial resources and support are provided to carry out the training activities. This requires consideration of people and cultural issues that might inhibit execution of training initiatives. In addition, the success or failure of previous training activities should be identified and addressed to ensure that future training activities support strategic training initiatives and are successfully implemented.

           Table 2.2 shows strategic training and development initiatives and their implications for training practices. Diversify the learning portfolio means that companies may need to provide more learning opportunities than just traditional training programs. These learning opportunities include informal learning that occurs on the job through interactions with peers; new job experiences; personalized learning opportunities using mentors, coaches, and feedback customized to the employee needs; and the use of technology (including Web-based training). Such training is self-paced and available outside a formal classroom environment. Consider how Freddie Mac, the mortgage finance company based in Virginia, provides learning when it is needed.A Freddie Mac employee who has a learning need can go to the learning portal on the Web to find solutions. The learning portal includes online courses, books, videos, discussion groups, and articles. Learning consultants are available to help employees use the learning portal, address special needs, and incorporate learning needs into their personal development plan. Accenture Resources Group, a consulting company in New York, uses informal learning as a way to increase communications between executives, managers, and consultants in the field. Each Accenture consultant is assigned to a community of 100 people that meets four times a year. The community meetings often feature senior executives leading discussions on topics such as leadership and the creation of shareholder value.

             Expand who is trained refers to the recognition that because employees are often the customer’s primary point of contact, they need as much if not more training than managers do. Also, to provide better customer service to suppliers, vendors, and consumers, companies need to distribute information about how to use the products and services they offer. Companies are beginning to train suppliers to ensure that the parts that suppliers provide will meet their customers’ quality standards. To be successful, companies have to be able to deal with changes in technology, customer needs, and global markets. Training needs have to be quickly identified and effective training provided. That is, companies have to accelerate the pace of employee learning. Also, companies are relying on Electronic Performance Support Systems (EPSS) that provide employees with immediate access to information, advice, and guidance. EPSS can be accessed through personal computers or handheld computers whenever they are needed. Because customers now have access to databases and Web Sites and have a greater awareness of high-quality customer service, they are more knowledgeable, are better prepared, and have higher service expectations than ever before. Employees must be prepared to improve customer service. Employees have to be knowledgeable about the product or service, they need to have customer service skills, and they need to understand the types of decisions they can make (e.g., can they make an exception to the policy of no cash refunds?). Providing development opportunities and communicating them to employees is important to ensure that employees believe that they have opportunities to grow and learn new skills. Such opportunities are important for attracting and retaining talented employees. Capturing and sharing knowledge ensures that important knowledge about customers, products, or processes is not lost if employees leave the company. Also, giving employees access to knowledge that other employees have may quicken response times to customers and improve product and service quality. For example, rather than “reinventing the wheel,” service personnel can tap into a database that allows them to search for problems and identify solutions that other service reps have developed. Aligning training and development with the company’s strategic direction is important to ensure that training contributes to business needs. Companies need to identify what employee capabilities (e.g., knowledge, skills) are needed and whether training programs and services are helping to improve these capabilities. Lastly, a supportive work environment is necessary for employees to be motivated to participate in training and learning activities, use what they learn on the job, and share their knowledge with others. Tangible support includes time and money for training and learning as well as work areas that encourage employees to meet and discuss ideas. Psychological support from managers and peers for training and learning is also important.

           How might a company ensure that its training and development initiatives are linked to its business strategy? Table 2.3 shows the questions that a company needs to answer to identify and develop its strategic training and development initiatives. To help answer these questions, trainers need to read the annual reports, strategic plans, earnings releases, and analyst reports for their companies. To understand the business strategy and its implications for training, it may be useful to invite managers to attend training and development staff meetings and present information on the company’s business strategy. Also, in companies with multiple divisions, it is important to understand each business, including how it measures effectiveness, how it monitors and reports performance, and what challenges it faces, such as supply chain management, new product development, competitive pressures, or service warranty issues. 

Table 2.2

TABLE 2.3 Questions to Ask to Develop Strategic Training and Development Initiatives

1. What is the vision and mission of the company? Identify the strategic drivers of the business strategy.

2. What capabilities does the company need as a result of the business strategy and business environment challenges?

3. What types of training and development will best attract, retain, and develop the talent needed for success?

4. Which competencies are critical for company success and the business strategy?

5. Does the company have a plan for making the link between training and development and the business strategy understood by executives, managers, and employees or customers?

6. Will the senior management team publicly support and champion training and development?

7. Does the company provide opportunities for training and developing not only individuals but also teams?

TRAINING AND DEVELOPMENT

After a company chooses its strategic training and development initiatives related to its business strategy, it then identifies specific training and development activities that will enable these initiatives to be achieved. These activities include developing initiatives related to use of new technology in training, increasing access to training programs for certain groups of employees, reducing development time, and developing new or expanded course offerings. For example, one of the strategic training and development initiatives for American Express Financial Advisors, located in Minneapolis, Minnesota, is to prepare employees to offer world-class service. Training the company’s customer service representatives is especially important because of the breadth of the job requirements. The customer service representatives have to be able to discuss the content of financial products as well as handle transactions of these products over the phone with both customers and financial experts. Also, the representatives work in the securities industry, which is highly regulated, and some are required to have a license to sell securities. American Express’s emphasis on training is related not only to the company needs but also to the basic business principle that it costs less to serve customers well and keep them than to try to replace them after they have left. Providing good customer service and maintaining customer loyalty depend on how well customer service representatives work the phones, take orders, offer assistance, and develop relationships with customers.

      When new employees report for work in the customer services section of American Express, they begin an eight-week training program designed to help them succeed in building and solidifying the company’s client base. First, they split their days into learning about American Express’s investment products and practicing how they will work with the company’s financial advisers and clients. After employees complete the initial training and begin to work on the phone with actual clients, they still receive at least two weeks of training each year. The ongoing training includes a mix of classroom and Web-based training on subjects such as new financial products or changes in security regulations. Online training modules are used to teach computer skills such as how to use a new software product or how to reduce the number of screens a representative must go through to retrieve a particular piece of information. American Express’s training includes active participation by the trainees. Customer service trainees are given time to review material, ask questions, and practice on the computer systems they will be using.

         Sun Microsystems, a manufacturer of computer workstations and workstation software based in Santa Clara, California, has made sure its training function and training activities support its business strategy. Sun’s mission statement (shown in Table 2.4) discusses how Sun views computer networks (a vision of network participation driven by shared innovation, community development, and open source leadership). Sun has established a history of innovation and technology leadership, helps companies in every industry leverage the power of the Internet, has established relationships with leading suppliers of computing solutions that Sun can rely on to develop integrated solutions, and is committed to high-quality service and technical support. In his letter to stockholders in the 2005 annual report, Scott McNealy, then chairman of the board and chief executive officer, identified six priorities: making money; growing; capitalizing on acquisitions; leveraging partners; reenlisting champions (creating passion for Sun in customers, partners, employees, and shareholders); and simplifying the business. The training and development activities that Sun develops can help the company achieve these business priorities.

     A good example of how a training function can contribute to business strategy is evident in the changes made by SunU, the training and development organization of Sun Microsystems. 20 SunU realigned its training philosophy and the types of training it conducted to be more linked to the strategy of Sun. Sun was in a constantly evolving business due to new technologies, products, and product markets. SunU found that its customers wanted training services that could be developed quickly, could train many people, and would not involve classroom training. Because of its importance for the business, Sun was also interested in maintaining and improving the knowledge and competence of its current work force.
    Table 2.5 presents the questions that SunU used to determine how to better contribute to the business strategy. Note that the questions SunU asked not only deal with the delivery of training, but also attempt to understand internal customer needs and potential business needs as determined by Sun’s business strategy.

        As a result of the need to better align the training function with the needs generated by the business strategy, SunU took several steps. First, it developed a new approach to determining the knowledge and skills that the employees needed to meet business goals. SunU identified several basic competencies (such as customer relations). A team of trainers at SunU constantly reviews these competencies and discusses them with key senior managers. For example, in the customer service competency, vice presidents and directors of sales and marketing are interviewed to identify training needs. As a result of this process SunU learns more about the business needs and is able to develop relevant training. To help deliver training quickly to a large number of trainees without relying on the classroom, SunU developed videoconferencing programs that allow training to be delivered simultaneously to several sites without requiring trainees to travel to a central location. To help maintain and improve the knowledge and abilities of its employees, SunU developed a desktop library that enables all employees to access CD-ROMs containing up-to-date information on technologies and products as well as profiles on customers and competitors. SunU also delivers Web-based training to more than 400,000 students, and more than 80,000 online training sessions are accessible daily to employees, customers, suppliers, and partners.

      In 2001, when SunU was faced with the business need to train and certify all Sun employees in Sun Sigma (Sun’s version of Six Sigma quality training) in less than six months, SunU turned to online training. SunU’s training program needed to reach employees who worked in 170 different countries and who spoke a variety of languages, and it needed to be tailored to both individuals and groups. The customized course material was incorporated into e-learning, which allowed SunU to train twice as many employees as would have been possible in a classroom approach. The Sun Sigma training initiative was able to save the company approximately $1.2 million.

TABLE 2.4 Sun Microsystems’s Vision, Mission, and Strategy

Vision: “The Network Is the Computer.” Sun drives network participation (the Participation Age) through shared innovation, community development, and open source leadership. Mission: To create the technologies and fuel the communities that power the Participation Age.

Strategy: We engineer solutions for our customers’ biggest, most important problems. We share our solutions to grow communities, increase participation, and create worldchanging new market opportunities. We will build and run the world’s participation infrastructure, The network, to make sure the job is done right.

TABLE 2.5 SunU’s Analysis to Align Training with Business Strategy

Customers

Who are our customers and how do we work for them?

Organization

What is the nature of practices required to complete our mission?

Products and Services

How do we ensure that our products and services meet strategic requirements?

Research and Development

How do we stay current in the training and learning fields and use our knowledge in these areas?

Business Systems

What are the processes, products, tools, and procedures required to achieve our goals?

Continuous Learning

How do we recognize that learning at Sun Microsystems is continuous, is conscious, and comes from many sources?

Results

How do we obtain results according to our customers’ standards?

TRAINING METRICS

How does a company determine whether training and development activities actually contribute to the business goals? This determination involves identifying and collecting outcome measures, or metrics. The metrics that are typically used to identify training success or effectiveness include trainees’ satisfaction with the training program; whether the trainees’ knowledge, skill, ability, or attitudes changed as a result of program participation (cognitive and skill-based outcomes); and whether the program resulted in business-related outcomes for the company.

    The business-related outcomes should be directly linked to the business strategy and goals. Business-related outcomes could evaluate, for example, customer service, employee satisfaction or engagement, employee turnover, number of product defects, time spent in product development, number of patents, or time spent filling management positions. Some companies use the balanced scorecard as a process to evaluate all aspects of the business. The balanced scorecard is a means of performance measurement that provides managers with a chance to look at the overall company performance or the performance of departments or functions (such as training) from the perspective of internal and external customers, employees, and shareholders.The balanced scorecard considers four different perspectives: customer, internal, innovation and learning, and financial. The emphasis and type of indicators used to measure each of these perspectives are based on the company’s business strategy and goals. The four perspectives and examples of metrics used to measure them include:

• Customer (time, quality, performance, service, cost).

• Internal (processes that influence customer satisfaction).

• Innovation and learning (operating efficiency, employee satisfaction, continuous improvement).

• Financial (profitability, growth, shareholder value).

        Metrics that might be used to assess training’s contribution to the balanced scorecard include employees trained (employees trained divided by total number of employees), training costs (total training costs divided by number of employees trained), and training costs per hour (total training costs divided by total training hours). For example, EMC Corporation, a technology company, uses a balanced scorecard to track and measure learning. Company performance is tracked quarterly with metrics measuring business alignment, work-force readiness, time-to-market, globalization, and effectiveness. The company has also implemented performance metrics that are directly linked to present and future business needs. Employees are given individual development plans that are based on an analysis of their jobs. Ingersoll Rand requires its business units to make strong business cases for new spending. Following this model, Ingersoll Rand University shows that learning makes a difference and contributes to the business strategy by using metrics such as expected benefits, one-time versus ongoing costs, shelf-life of learning products, and employee participation rates in its programs. Each year Ingersoll Rand University (IRU) provides the company with an annual report communicating accomplishments, challenges, strategic directions, and operational efficiencies. For example, IRU has offered process improvement workshops related to Lean Six Sigma (a quality initiative), which is a business priority. IRU has been able to demonstrate that its workshops have resulted in saving the company hundreds of thousands of dollars by reducing vendor delivery costs by 76 percent. The process of identifying and collecting metrics is related to training evaluation.

 

MANAGERS' ROLES

The roles that employees and managers have in a company influence the focus of training, development, and learning activity. Traditionally, employees’ roles were to perform their jobs according to the managers’ directions. Employees were not involved in improving the quality of the products or services. However, with the emphasis on the creation of intellectual capital and the movement toward high-performance work systems using teams, employees today are performing many roles once reserved for management (e.g., hiring; scheduling work; interacting with customers, vendors, and suppliers). If companies are using teams to manufacture goods and provide services, team members need training in interpersonal problem solving and team skills (e.g., how to resolve conflicts, give feedback). If employees are responsible for the quality of products and services, they need to be trained to use data to make decisions, which involves training in statistical process control techniques. Team members may also receive training in skills needed for all positions on the team (cross training), not just for the specific job they are doing. To encourage cross training, companies may adopt skill-based pay systems, which base employees’ pay rates on the number of skills they are competent in rather than what skills they are using for their current jobs.

      Research suggests that managers in traditional work environments are expected to do the following:

• Manage individual performance. Motivate employees to change performance, provide performance feedback, and monitor training activities.

• Develop employees. Explain work assignments and provide technical expertise.

• Plan and allocate resources. Translate strategic plans into work assignments and establish target dates for projects.

• Coordinate interdependent groups. Persuade other units to provide products or resources needed by the work group, and understand the goals and plans of other units.

• Manage group performance. Define areas of responsibility, meet with other managers to discuss effects of changes in the work unit on their groups, facilitate change, and implement business strategy.

• Monitor the business environment. Develop and maintain relationships with clients and customers, and participate in task forces to identify new business opportunities.

• Represent one’s work unit. Develop relationships with other managers, communicate the needs of the work group to other units, and provide information on work group status to other groups.

      Regardless of their level in the company (e.g., senior management), all managers are expected to serve as spokespersons to other work units, managers, and vendors (i.e., represent the work unit). Of course, the amount of time managers devote to some of these roles is affected by their level. Line managers spend more time managing individual performance and developing employees than midlevel managers or executives do. The most important roles for midlevel managers and executives are planning and allocating resources, coordinating interdependent groups, and managing group performance (especially managing change). Executives also spend time monitoring the business environment by analyzing market trends, developing relationships with clients, and overseeing sales and marketing activities.

     The roles and duties of managers in companies that use high-performance work systems (such as teams) are shown in Table 2.6. The managers’ duty is to create the conditions necessary to ensure team success. These roles include managing alignment, coordinating activities, facilitating the decision-making process, encouraging continuous learning, and creating and maintaining trust.

      To manage successfully in a team environment, managers need to be trained in “people skills,” including negotiation, sensitivity, coaching, conflict resolution, and communication skills. A lack of people skills has been shown to be related to managers’ failure to advance in their careers.

table 2.6

TOP MANAGEMENT SUPPORT

The CEO, the top manager in the company, plays a key role in determining the importance of training and learning in the company. The CEO is responsible for

• A clear direction for learning (vision).

• Encouragement, resources, and commitment for strategic learning (sponsor).

• Taking an active role in governing learning, including reviewing goals and objectives and providing insight on how to measure training effectiveness (governor).

• Developing new learning programs for the company (subject-matter expert).

• Teaching programs or providing resources online (faculty).

• Serving as a role model for learning for the entire company and demonstrating a willingness to constantly learn (learner).

• Promoting the company’s commitment to learning by advocating it in speeches, annual reports, interviews, and other public relations tools (marketing agent).

     For example, James Hackett, CEO of Steelcase, a company in the office furniture industry, declared publicly that learning is the core of Steelcase’s strategy. The key, said Hackett, is for Steelcase to study space and help companies use it more efficiently and effectively. At Ingersoll Rand, to ensure that top managers understand and support the role that training and development can play in the company, a “ladder of engagement” model has been created. Top managers are engaged in training and development in many different ways, including providing input into learning program development, serving as trainers or co-trainers, visiting courses as executive speakers, or serving as advisory council members for Ingersoll Rand’s corporate university.

INTEGRATION OF BUSINESS UNITS

The degree to which a company’s units or businesses are integrated affects the kind of training that takes place. In a highly integrated business, employees need to understand other units, services, and products in the company. Training likely includes rotating employees between jobs in different businesses so they can gain an understanding of the whole business.

GLOBAL TRAINING

The development of global product and service markets is an important challenge for U.S. companies. For companies with global operations, training is used to prepare employees for temporary or long-term overseas assignments. Also, because employees are geographically dispersed outside the United States, companies need to determine whether training will be conducted and coordinated from a central U.S. facility or will be the responsibility of satellite installations located near overseas facilities.

     Consider how globalization has affected the training practices of KLA-Tencor, a manufacturer of equipment and systems for semiconductor manufacturers. KLA-Tencor has factories in China, Taiwan, Singapore, and India in order to better serve its customers, such as Intel, which also have global locations. At KLA-Tencor, employees are trained in installing and servicing machine tools in its global operations. Employees also need to know how to adjust the machines to maximize productivity so they can educate customers on how to use them more effectively. Technology training is provided regionally because trainees need hands-on experience with the machines. KLA-Tencor finds local instructors who are qualified to teach in the local language. The local instructors are trained in how to deliver the technical training and use the machines. Before teaching courses on their own, the local instructors co-teach a class with another trainer to ensure that they are comfortable and proficient in delivering training. Network Appliances, a data storage technology company, is headquartered in the U.S. but has locations in the Middle East, Asia, and Africa. NetApp University provides training to account managers, systems engineers, technical support employees, customers, and maintenance suppliers. NetApp training centers in overseas locations provide training that is delivered in English. Some courses, such as customer training, are available in 23 different languages.

       At Intel, a semiconductor and microprocessor manufacturer, providing for the company’s global strategic needs begins with a needs assessment. Regardless of whether employees are in China or Arizona, they are going to receive the same training content. Intel’s programs are delivered by local instructors (subject-matter experts, not full-time trainers) who tailor the training content to meet the needs of the learners at each location. Intel uses local instructors to ensure that the training content is not too generic or U.S.-focused. Typically, the content is 80 to 90 percent consistent across the company, but instructors have the flexibility to use examples that are geographically and/or business-unit relevant.

BUSINESS CONDITIONS

When unemployment is low and/or businesses are growing at a high rate and need more employees, companies often find it difficult to attract new employees, find employees with necessary skills, and retain current employees. Companies may find themselves in the position of hiring employees who might not be qualified for the job. Also, in these types of business conditions, companies need to retain talented employees. In the knowledge-based economy (including companies in information technology and pharmaceuticals), product development is dependent on employees’ specialized skills. Losing a key employee may cause a project to be delayed or hinder a company’s taking on new projects. Training plays a key role in preparing employees to be productive as well as motivating and retaining current employees. Studies of what factors influence employee retention suggest that employees rate working with good colleagues, challenging job assignments, and opportunities for career growth and development as top reasons for staying with a company. Across all industries, from high tech to retailing, companies are increasingly relying on training and development to attract new employees and retain current ones. For example, companies such as Eli Lilly (a pharmaceutical company) and Microsoft are successful in terms of financial returns. They are typically found on lists of great places to work (for example, Fortune magazine’s list of “Best Companies to Work For”). They are quite successful in attracting and retaining employees. Not only do they provide employees with very competitive pay and benefits, but they also are committed to training and development. Retailers such as Macy’s and Nordstroms cannot generate sales unless they have enough skilled employees.For example, Macy’s begins its employee retention strategy by starting with executives. Executives are accountable for retention of the employees who report to them. Managers have been trained to run meetings and conduct performance evaluations (skills that influence employees’ perceptions of how they are treated, which ultimately affects whether they remain with Macy’s). Macy’s has also provided training programs and courses for employees

      For companies in an unstable or recessionary business environment—one characterized by mergers, acquisitions, or disinvestment of businesses—training may be abandoned, be left to the discretion of managers, or become more short term (such as offering training courses only to correct skill deficiencies rather than to prepare staff for new assignments). These programs emphasize the development of skills and characteristics needed (e.g., how to deal with change) regardless of the structure the company takes. Training may not even occur as a result of a planned effort. Employees who remain with a company following a merger, acquisition, or disinvestment usually find that their job now has different responsibilities requiring new skills. For employees in companies experiencing growth—that is, an increased demand for their products and services—there may be many new opportunities for lateral job moves and promotions resulting from the expansion of sales, marketing, and manufacturing operations or from the start-up of new business units. These employees are usually excited about participating in development activities because new positions often offer higher salaries and more challenging tasks.

      During periods when companies are trying to revitalize and redirect their business, earnings are often flat. As a result, fewer incentives for participation in training—such as promotions and salary increases—may be available. In many cases, companies downsize their work forces as a way of cutting costs. Training activities under these conditions focus on ensuring that employees are available to fill the positions vacated by retirement or turnover. Training also involves helping employees avoid skill obsolescence.

HUMAN RESOURCE MANAGEMENT PRACTICES

Human resource management (HRM) practices consist of the management activities related to investments (time, effort, and money) in staffing (determining how many employees are needed, and recruiting and selecting employees), performance management, training, and compensation and benefits. The type of training and the resources devoted to training are influenced by the strategy adopted for two human resource management practices: staffing and human resource planning.

Staffing Strategy

Staffing strategy refers to the company’s decisions regarding where to find employees, how to select them, and the desired mix of employee skills and statuses (temporary, fulltime, etc.). For example, one staffing decision a company has to make is how much to rely on the internal labor market (within the company) or external labor market (outside the company) to fill vacancies. Two aspects of a company’s staffing strategy influence training: the criteria used to make promotion and assignment decisions (assignment flow) and the places where the company prefers to obtain the human resources to fill open positions (supply flow).

      Companies vary in terms of the extent to which they make promotion and job assignment decisions based on individual performance or group or business-unit performance. They also vary in terms of the extent to which their staffing needs are met by relying on current employees (internal labor market) or employees from competitors and recent entrants into the labor market, such as college graduates (external labor market). Figure 2.4 displays the two dimensions of staffing strategy. The interaction between assignment flow and supply flow results in four distinct types of companies: fortresses, baseball teams, clubs, and academies. Each company type places a different emphasis on training activities. For example, some companies (such as medical research companies) emphasize innovation and creativity. These types of companies are labeled baseball teams. Because it may be difficult to train skills related to innovation and creativity, they tend to handle staffing needs by luring employees away from competitors or by hiring graduating students with specialized skills. Figure 2.4 can be used to identify development activities that support a specific staffing strategy. For example, if a company wants to reward individual employee contributions and promote from within (the bottom right quadrant of Figure 2.4), it needs to use lateral, upward, and downward moves within and across functions to support the staffing strategy.

       Another staffing strategy is deciding what skills new employees will be expected to possess and what skills the company will develop through training. MidAmerican Energy was having trouble finding skilled, ready-to-hire meter readers and increasing the diversity of its meter readers.Turnover was 50 percent, and customers increasingly complained about incorrect meter reads, which translated into higher bills. These problems were blamed on the company’s traditional hiring, which involved employee referrals. As a result, MidAmerican decided to change its hiring practices in order to hire more skilled people. First, MidAmerican identified that the important skills for the job were reading for information, locating information, and observation. Next, MidAmerican Energy decided to use tests on these skills as part of the hiring process. The tests ask questions that assess these skills in the context of the work of meter readers. As a result of the tests, turnover has been reduced, customer service has improved, the diversity of the work force has increased, and new meter readers are completing MidAmerican’s apprenticeship programs more quickly.

Human Resource Planning

Human resource planning includes the identification, analysis, forecasting, and planning of changes needed in the human resource area to help the company meet changing business conditions. Human resource planning allows the company to anticipate the movement of human resources in the company because of turnover, transfers, retirements, or promotions. Human resource plans can help identify where employees with certain types of skills are needed in the company. Training can be used to prepare employees for increased responsibilities in their current job, promotions, lateral moves, transfers, and downward job opportunities that are predicted by the human resource plan.

FIGURE 2.4

UNIONIZATION

Unions’ interest in training has resulted in joint Union-Management programs designed to help employees prepare for new jobs. When companies begin retraining and productivity-improvement efforts without involving unions, the efforts are likely to fail. The unions may see the programs as just another attempt to make employees work harder without sharing the productivity gains. Joint union-management programs ensure that all parties (unions, management, employees) understand the development goals and are committed to making the changes necessary for the company to make profits and for employees to both keep their jobs and share in any increased profits.

STAFF INPUT

How often and how well a company’s training program is used are affected by the degree to which managers, employees, and specialized development staff are involved in the process. If managers are not involved in the training process (e.g., determining training needs, being used as trainers), training may be unrelated to business needs. Managers may also not be committed to ensuring that training is effective (e.g., giving trainees feedback on the job). As a result, training’s potential impact on helping the company reach its goals may be limited because managers may feel that training is a “necessary evil” forced on them by the training department rather than a means of helping them to accomplish business goals.

      If line managers are aware of what development activity can achieve, such as reducing the time it takes to fill open positions, they will be more willing to become involved in it. They will also become more involved in the training process if they are rewarded for participating. Constellation Energy, located in Baltimore, Maryland, links employee learning to individual and organizational performance.Each summer the company is involved in its business planning process until December, during which time a comprehensive five-year plan detailing organizational and business goals and objectives is developed. The human resources plan, which includes learning, ensures that employee development strategies are aligned with business strategies. Individual development plans and goals jointly established between employees and their managers are established based on the business goals and objectives and human resource needs. Managers are held accountable for developing employees. One of the competencies they are evaluated on is human capital management, which includes employee engagement, talent management, and diversity. Part of each manager’s bonus is based on the evaluation he or she receives on this competency.

       An emerging trend is that companies expect employees to initiate the training process. Companies with a greater acceptance of a continuous learning philosophy require more development planning. Companies will support training and development activities (such as tuition reimbursement and the offering of courses, seminars, and workshops) but will give employees the responsibility for planning their own development. Training and development planning involve identifying needs, choosing the expected outcome (e.g., behavior change, greater knowledge), identifying the actions that should be taken, deciding how progress toward goal attainment will be measured, and creating a timetable for improvement. To identify strengths and weaknesses and training needs, employees need to analyze what they want to do, what they can do, how others perceive them, and what others expect of them. A need can result from gaps between current capabilities and interests and the type of work or position the employee wants in the future.

figure 2.5

FACULTY MODEL

Training departments organized by the faculty model look a lot like the structure of a college. Figure 2.5 shows the faculty model. The training department is headed by a director with a staff of experts who have specialized knowledge of a particular topic or skill area. These experts develop, administer, and update training programs. For example, sales trainers are responsible for sales skills training (cultivating clients, negotiating a sale, closing a sale), and computer experts provide training on topics such as using e-mail and the World Wide Web as well as software design language.

The faculty model has several strengths. First, training staff are clearly experts in the areas in which they train. Second, the training department’s plans are easily determined by staff expertise. The content and timing of programs are determined primarily by when they are available and the expertise of the trainers. Organizing by the faculty model also has several disadvantages. Companies that use the faculty model may create a training function that has expertise that does not meet the needs of the organization. Trainers in a faculty model may also be unaware of business problems or unwilling to adapt materials to fit a business need. This can result in demotivated trainees who fail to learn because course content lacks meaning for them—that is, it does not relate to problems or needs of the business. Programs and courses that may be needed may not be offered because trainers are not experts in certain areas. Skill and knowledge emphasized in programs may not match the needs of the company. To overcome these disadvantages of the faculty model, managers need to frequently survey training’s customers to ensure that course offerings are meeting their needs. Expert trainers also need to ensure that they adapt course materials so they are meaningful for participants.

CUSTOMER MODEL

Training departments organized according to the customer model are responsible for the training needs of one division or function of the company. For example, trainers might be responsible for programs related to information systems, marketing, or operations. The trainers might also be human resource generalists whose job responsibilities include a broad range of human resource functions such as training, performance management, hiring, and benefits. Figure 2.6 shows the customer model. This model overcomes a major problem of the faculty model. Training programs are developed more in line with the particular needs of a business group rather than based on the expertise of the training staff. Selection, training, compensation, and development are all based on a common set of knowledges, skills, abilities, or competencies. That is, training is integrated with other human resource responsibilities. Trainers in this model are expected to be aware of business needs and to update courses and content to reflect them. If needs change such that training is no longer available from a source inside the company, the trainers may use outside experts (e.g., consultants). Materials provided by a training staff organized by this model are likely to be meaningful to trainees.

     There are several disadvantages to this model. First, trainers have to spend considerable time learning the business function before they can be useful trainers. Second, a large number of programs covering similar topics may be developed by customers. These programs may also vary greatly in effectiveness. It may be difficult for the training director to oversee each function to ensure that (1) a common instructional design process is used or (2) the company’s quality philosophy is consistently emphasized in each program. For example, quality training may be developed separately for marketing and for operations employees. This type of structure is likely to be unattractive to trainers who consider presentation and teaching to be their primary job function. In the customer model, trainers are likely to be employees from the functional area (e.g., manufacturing engineers) who have great functional expertise but lack training in instructional design and learning theory. As a result, courses may be meaningful but poor from a design perspective (e.g., have inadequate feedback and practice opportunities).

     For example, Transamerica Life Companies has identified skills that are needed companywide. These skills include communications, accountability, initiative, and collaboration. Transamerica Life also has identified technical knowledge that is needed only in certain business units of the company. These skills and this knowledge are used to make hiring, promotion, and compensation decisions. All employee training and development activity focuses on knowledge and skills that are needed companywide or within a business unit.

figure 2.6

MATRIX MODEL

In the matrix model, trainers report to both a manager in the training department and a manager in a particular function. Figure 2.7 shows the matrix model. The trainer has the responsibility of being both a training expert and a functional expert. For example, as Figure 2.7 shows, sales trainers report to both the director of training and the marketing manager. One advantage of the matrix model is that it helps ensure that training is linked to the needs of the business. Another advantage is that the trainer gains expertise in understanding a specific business function. Because the trainer is also responsible to the training director, it is likely that the trainer will stay professionally current (e.g., up-to-date on new training delivery mechanisms such as the Internet). A major disadvantage of the matrix model is that trainers likely will have more time demands and conflicts because they report to two managers: a functional manager and a training director.

figure 2.7

CORPORATE UNIVERSITY MODEL

Because of the trend to centralize training, many companies use the corporate university model, as shown in Figure 2.8. The corporate university model differs from the other models in that the client group includes not only employees and managers but also stakeholders outside the company, including community colleges, universities, high schools, and grade schools. Training functions organized by the university model tend to offer a wider range of programs and courses than functions organized by the other models. Important culture and values also tend to be emphasized more often in the training curriculum of corporate universities than the other models. The university model centralizes training to make sure that “best training practices” that may be used in one unit of the company are disseminated across the company. Also, the corporate university enables the company to control costs by developing consistent training practices and policies. For example, when Capital One Financial Services created Capital One University, it reduced learning and Development Cost and training staff by one-third and reduced course offerings by 43 percent. The company consolidated five training organizations into a facility called Town Center, located in Richmond, Virginia. The Capital One University has four goals: meeting business needs, building organizational capability, establishing and sustaining operational excellence, and creating a world-class experience.

      Corporate universities also can help effectively utilize new technology. The University of Toyota, a division of Toyota Motor Sales, oversees external vendors’ development of classroom and e-learning training for employees and dealerships. Trainees were frustrated because there was considerable variability in course navigation and quality. The group responsible for uploading courses to the company’s learning management system and distributing the courses to learners was also frustrated because it had difficulties integrating different software and explaining to users why courses coming from the university had different bandwidth requirements. To ensure that courses meet minimum standards for quality and usability, the University of Toyota has developed a single set of development standards, benchmarks, purchasing specifications, and best practices. The information is housed on e-Source, the university’s Web site. Vendors are required to visit e-Source to bid on any e-learning projects for Toyota University. Courses that do not meet the specifications are revised at the vendor’s expense. E-mail bulletins are sent to course owners and developers to notify them of any content additions or changes to the Web site.

      Both large and small companies have started their own universities to train new employees and to retain and update the skills and knowledge of current employees. Caterpillar University comprises six colleges: leadership, marketing and distribution, technology, business and business processes, Six Sigma, and product support. The deans of the colleges report to the president of the university. Caterpillar’s CEO, vice presidents, and two group presidents provide policy guidance, approve budgets, and identify priorities for the university. One priority was to support new business growth goals through the development of leaders who are willing to collaborate with others, have a global mindset, and understand the financial aspects of the business. The College of Marketing and Distribution focuses on providing a comprehensive curriculum for sales professionals and sales marketing managers. It includes product knowledge, sales skills, and management skills. All learning goals are tied to business goals. The College of Product Support focuses on training dealer employees to meet certification standards. Caterpillar University staff members help the business units deal with their learning needs. Lead learning managers in each unit have a dual reporting relationship to the university and to the unit’s human resource manager. The learning managers work with the business unit managers to set up learning plans.

      Hamburger University, the corporate university for McDonald’s Corporation, is charged with continuing to teach the core values that founder Ray Kroc believed were the key to success: quality, service, cleanliness, and value.McDonald’s conducts research design to identify the characteristics of its work force that influence learning. As a result, Hamburger University has transitioned away from teaching courses with a lecture format and is moving toward fewer large group sessions and more interactive learning in classes of 25–35 students, which are then further divided into small groups for discussion and exercises. McDonald’s changed its learning format to accommodate how most of its students (who would be considered Generation Y) learn. The typical education level of frontline service workers has influenced curriculum design through the development of more easily understandable coursework. E-learning is used to deliver the basics of restaurant operations or management training and classroom instruction and simulations are used to help the learner apply the basics on the job. Because students come from around the world, learners are provided with headphones that connect them with translators who provide instruction in the learner’s native language during class. Besides classroom instruction, Hamburger University includes a simulated kitchen and drive-thru window. Despite having learners at the university who are already familiar with behind-the-counter operations, everyone takes part in the simulation, making real food and filling orders just as they would at a real McDonald’s restaurant. Learners have performance goals to meet and receive feedback from fellow learners and trainers.

     Are corporate universities effective? Corporate University Xchange surveyed corporate universities at 170 different companies. The top five organizational goals of corporate universities were to improve customer service and retention, improve productivity, reduce costs, retain talented employees, and increase revenue. The survey found that measuring business impact was a high priority. Seventy percent of the companies surveyed measure business impact through product and service quality and customer service, and more than 50 percent measure reductions in operating costs and increased revenues. For example, CoreTech Consulting Group in King of Prussia, Pennsylvania, found that compensaton was less of an issue with its employees than growth opportunities and career development.CoreTech started CoreTech University, which offers short training courses to help employees improve their technical and interpersonal skills. While the company spends approximately $4,500 per employee each year on training, it helps certify employees in different areas of information technology (e.g., a Microsoft certified systems engineer), which is tied directly to the company’s mission and goals. CoreTech even used the in-house courses offered by the university to create a separate for-profit training company that offers courses to the public. It has generated $325,000 in revenues through courses offered primarily to chief information officers and information technology managers.

     Ritz-Carlton Hotel manages 58 luxury hotels worldwide. The Ritz-Carlton hotels and resorts are renowned for indulgent luxury. Beautiful surroundings and legendary awardwinning service are provided to every guest. The Ritz-Carlton Leadership Center is designed to support the growth and expansion of the company’s products and services. The Leadership Center includes the School of Performance Excellence, which houses all the training and development for hourly employees; the School of Leadership and Business Excellence, which trains leaders; and the School of Service Excellence, which helps ensure high customer service. Programs at the School of Service Excellence are offered to other companies, which has resulted in yearly revenues for Ritz-Carlton of more than $1 million. These revenues help offset the costs of training and development for employees. For example, a new customized training certification system for housekeeping staff utilizes CD-ROM and Web-based training. The training is linked to the results of room inspections that highlight defects for the day, week, and year. The housekeeper can then identify the correct processes that are needed to remedy the defects. This just-in-time training has helped increase customer satisfaction scores at Ritz-Carlton. One hotel increased its satisfaction with cleanliness from 82 percent to 92 percent within six months.

      Steelcase’s business is making workspace more effective to facilitate innovation, productivity, efficiency, and creativity. To highlight Steelcase’s capabilities for effective workspace design and to facilitate learning, creativity, and collaboration, Steelcase University Learning Center was developed. Many organizations visit annually to benchmark the university, the social network capabilities, and the learning tools. Also, the Steelcase University Learning Center has centralized all of the company’s training and development efforts—reducing redundancies, facilitating consistency, and ensuring knowledge sharing. The learning center includes 70 percent formal and 30 percent informal learning space, putting into practice research results regarding how learning and social networking occur. The learning center provides flexible, informal space that allows employees to meet privately as well as interact in groups, facilitating cooperation and collaboration. Nine classrooms and ten breakout areas include flexible furniture and the newest technology. Each room and area can be changed to fit the specific needs of the users. The learning center is also the gathering place for Cross-Functional Teams. Activities held in the learning center include town hall meetings, lunch-and-learn sessions, and virtual teaching sessions. The learning center is also known as the place for employee leadership development. The company’s global leadership teams can use the center to meet both physically and virtually.

figure 2.8

CREATING A CORPORATE UNIVERSITY

Creating a corporate university from scratch involves several steps. First, senior managers and business managers form a governing body with the responsibility of developing a vision for the university. (This group answers questions such as, What are the university’s policies, systems, and procedures? What are the key functional areas for which training courses will be developed?) Second, this vision is fleshed out, and the vision statement is linked to the business strategy. For example, Ingersoll Rand has a business goal of obtaining 38 percent of its revenue in 2010 from new product innovation.As a result, most of the programs and courses offered through Ingersoll Rand University discuss how to get close to the customer, innovation, and strategic marketing. The programs are designed for teams working on real business issues. Subject matter experts and managers teach these programs, which are scheduled based on key product launch dates. Third, the company decides how to fund the university. The university can be funded by charging fees to business units and/or by monies allocated directly from the corporate budget. Fourth, the company determines the degree to which all training will be centralized. Many universities centralize the development of a learning philosophy, core curriculum design, and policies and procedures related to registration, administration, measurement, marketing, and distance learning. Local and regional on-site delivery and specialized business-unit curriculum are developed by business units. Fifth, it is important to identify the needs of university “customers” including employees, managers, suppliers, and external customers. Sixth, products and services are developed. The Bank of Montreal uses a service team that includes a client-relationship manager, a subject-matter expert, and a learning manager. The client-relationship manager works with the business units to identify their needs. The subject-matter expert identifies the skill requirements for meeting those needs. The learning manager recommends the best mix of learning, including classroom training as well as training based on, say, the Web or CD-ROM. The seventh step is to choose learning partners including suppliers, consultants, colleges, and companies specializing in education. Eighth, the company develops a strategy for using technology to train more employees, more frequently, and more cost-effectively than instructor-led training. Ninth, learning that occurs as a result of a corporate university is linked to performance improvement. This involves identifying how performance improvement will be measured (tests, sales data, etc.). For example, Sprint’s corporate university, the University of Excellence, has developed the Standard Training Equivalent (STE) unit, an evaluation tool for its customers who are internal business units.The STE unit is equal to one hour of the traditional instructor-led classroom time that would be required to deliver a course to a group of employees at a central location. An STE unit consisting of a one-hour course over the company intranet is worth much more than the same amount of time spent in the classroom. The STE program helps the University of Excellence demonstrate its value to Sprint’s business units, who fund the university. Finally, the value of the corporate university is communicated to potential “customers.” Questions about the types of programs offered, how learning will occur, and how employees will enroll are addressed.

BUSINESS-EMBEDDED MODEL

Many companies are organizing their training function so that they can better control their training costs and ensure that training is aligned with the business strategy but at the same time respond quickly to client needs and provide high-quality services.The businessembedded (BE) model is characterized by five competencies: strategic direction, product design, structural versatility, product delivery, and accountability for results. Strategic direction includes a clearly described goal and direction to the department as well as a customer focus that includes customizing training to meet customer needs and continuously improving programs. A BE training function not only views trainees as customers but also views managers as customers who make decisions to send employees to training and views seniorlevel managers as customers who allocate money for training. Table 2.8 contrasts a BE training function with a traditional training department. Compared to a traditional training department, a BE function is customer focused. It takes more responsibility for learning and evaluating training effectiveness, provides customized training solutions based on customer needs, and determines when and how to deliver training based on customer needs. To ensure that EMC’s business strategy is supported by training, the company uses learning councils and development frameworks. Every business unit, including sales, technical, and engineering units, has education and development performance consultants who serve on the unit’s learning council. The consultants report to EMC’s central training organization, thus ensuring that the needs of the business units are discussed when training delivery or design is discussed. EMC uses a consistent training design framework, which makes it easier for managers and employees in all business units to understand how training leads to skill development and career advancement.

      The most noticeable difference between a BE function and a traditional training department is its structure. The traditional training organization tends to operate with a fixed staff of trainers and administrators who perform very specific functions such as instructional design. In traditional training departments developers and instructors often take a “silo” approach, focusing only on their particular responsibilities. This approach can hinder the development of successful training programs. In BE training functions all persons who are involved in the training process communicate and share resources. Trainers—who are responsible for developing training materials, delivering instruction, and supporting trainees—work together to ensure that learning occurs. For example, access to project managers and subject-matter experts can be provided by developers to instructors who usually do not have contact with these groups. The number of trainers in BE training functions varies according to the demand for products and services. The trainers not only have specialized competencies (e.g., instructional design) but can also serve as internal consultants and provide a wide range of services (e.g., needs assessment, content improvement, customization of programs, results measurement). 

Current Practice: Business-Embedded Model with Centralized Training

Because many companies are recognizing training’s critical role in contributing to the business strategy, there is an increasing trend for the training function, especially in companies that have separate business units, to be organized by a blend of the BE model with centralized training that often includes a corporate university. This approach allows the company to gain the benefits of centralized training but at the same time ensure that training can provide programs, content, and delivery methods that meet the needs of specific businesses.

       At Carter & Burgess, a professional services company, every learning program is aligned with the business strategy. Because the company has federal contracts, employees must complete yearly compliance training and professional education courses to maintain their licenses. Other learning programs are determined based on an annual needs analysis, exit interviews, and information from focus groups and stakeholders. The training and development team lets offices determine their training needs based on business needs. Office managers review the training programs and decide which ones they want to invest in. The training and development team monitors the usage of training and consults with the office on strategy and delivery. Allowing customization based on office needs, while at the same time centralizing strategy and training delivery, has helped to decrease costs. A companywide commitment to a single external vendor of training practices has resulted in a savings of more than 34 percent in the first year.

       Nextel Communications provides wireless communications services in the United States.The company offers a suite of advanced wireless services that include digital wireless mobile telephone service; walkie-talkie features, including its Nextel Direct Connect; Nextel Nationwide Direct Connect; Nextel International Direct Connect; and wireless data transmission services. To stay ahead of the changing business environment, Nextel’s training organization embeds business training managers (BTM) in every business function. The BTMs report to the training organization but they are expected to contribute to the business teams and to earn their trust and respect as a way to appreciate the businesses’ learning needs. The BTMs are also learning experts for the business units. Because the BTMs have a detailed understanding of the business units they support, they are better able to take into account long- and short-term business goals when choosing or designing training and to identify metrics that show how the training impacts the business.

       Prior to the formation of a strategic training organization and Nextel University, business functions determined their own training needs and funded their own training initiatives. The result was limited knowledge-sharing across the company, costly redundancies in training programs, and training that was developed simply as a response to business function management requests without a consideration of how training fit into the business function’s strategy or whether training really was appropriate. Now, all company programs with significant impact or cost must be accepted by Nextel’s program oversight committee. Committee members include representatives from information technology, engineering, new product development, marketing, legal, and the human resource development (HRD) organization. By involving HRD in the program approval process, Nextel ensures that any training and development needs are included at the beginning rather than at the end of the project and that adequate training funds are allocated to programs and products. Training and development are linked directly to critical business decisions, and new products and programs are cost-effective, timely, and support the business strategy.

     At Nextel, all funding for training and development is controlled by the HRD organization. To reduce training and development costs and to ensure that these activities are linked to business needs and are of high quality, each employee has a development plan. The Business Management Institute is responsible for Nextel’s core business literacy. Its functions include all business management training and new-hire orientation. Nextel’s Leadership Institute provides services to 150 employees who are viewed as the next company leaders. Nextel University enables efficiency and quality in training program design, development, and implementation. It provides a variety of technical, management, and sales training. Besides creating training on an as-needed basis, Nextel University increases the company’s talent pool by participating in programs that develop the company’s future leaders.

     Is Nextel’s HRD organization paying dividends? Recent surveys suggest that internal customers are satisfied and that more than 90 percent of business function leaders believe that HRD is doing a good job of supporting company business objectives and goals.

Table 2.8