Why is training the first to go?

Keep CalmI often hear learning professionals bemoan the fact that the learning function “gets no respect.” More specifically, when times are tough, I often hear that “learning is the first budget to be cut.” It is seen as nice to have, not essential.

How could this be? In a complex and rapidly changing world, don’t we need to staff our companies with people who can think on their feet, process data quickly and accurately, and make good decisions?

$170M Savings

We saw a striking example of the impact of a well-designed learning process in our work with the claim organization within a Fortune 200 property and casualty insurance company. The problem was that claim adjusters were not documenting medical disability claims using objective, specific language to justify their decisions. Insurance companies measure the potential losses from such things by doing random audits of files to determine how many cases they would lose if they were taken to trial – a statistic called Loss Improvement Opportunity or LIO. In this case, the LIO was three hundred million dollars ($300M) – five times industry average. An expensive custom eLearning program had been put into place, but it didn’t solve the problem.

Our solution was a two-week learning process that taught the concepts related to medical disability management via eLearning. Then, using web meetings plus discussion forums, we introduced a sequenced case study. Next, learners were given a sample file, and asked to post questions they would ask of the medical specialist in private forums seen only by them and the instructor. Instructors role-played medical specialists in a web meeting to answer these questions. Learners then documented the file (which had no “right answer”) using the SMART principles they had been taught. Senior adjusters served as coaches and gave detailed feedback on the cases, then another web meeting was held to discuss key learnings. The process was repeated with a second file and – if required for certain learners – a third.

Six hundred claim adjusters were trained using 12 senior claim adjusters as coaches over a six week period. Within two years, the loss improvement opportunity dropped from $300M to $130M – a $170M savings.

A 10x Increase in Speed to Proficiency

We saw a second example of the impact of a well-designed social learning process in our work with the underwriting organization of the same company.

The company had a problem. Each year, they recruited 20-30 college seniors to be underwriters and sent them for eight weeks of training at headquarters over the summer. Then they would send them to various field offices across the US. When they were sent into the field, all too often they would systematically unlearn the new techniques and best practices taught in headquarters. Senior underwriters in the branch – often in supervisory positions – would tell the newcomers about the “real world” and “how things are really done.” New ways of using information technology to research customers and other techniques taught in class were discouraged by old timers.

First, we created an online community for the recruits. Prior to hire, from January through June, the trainees interacted with an underwriting VP as well as program alumni. In the coffee shop they discussed the favorite sports teams and where to jog when they came for training; in other rooms they were able to ask alumni questions about the underwriting profession. After the summer training, when they got to the field, the community center re-opened and trainees were assigned to participate in it for four hours a week for eight months. Underwriting techniques were reinforced with stretch assignments and successes shared in round-tables. Coaching rooms allowed them a private place to ask questions and receive feedback from their mentors and buddies – graduates of last year’s program. Bi-weekly conference calls provided other round table opportunities, and notes were posted in the community center

I asked the CLO why he was continuing this program for the sixth consecutive year of underwriter training. “We like it,” was his response.

“What could we tell our other clients?” we asked. “Tell them all we like it,” he replied.

“Could you put a number to ‘we like it?’” we inquired. “Forty million dollars. That’s how much each of these underwriters was underwriting after eight months in this program,” he explained.

“Was that compared to – say – $39 million otherwise?” we wondered. “No,” he replied. “This happens to be the amount underwriters with nine years of experience in our company write, on average. And we’re getting it after eight months – over ten times faster than with our old methods.

What would you give to be able to tell that story to your CFO?

Key Take Aways

As you can imagine, these programs were not the first to go when budgets were tight. Why? Let’s look at a few key factors.

  1. The learning programs were aligned with the business. In the first situation, each year the VP of Claims had to explain why their losses were five times the industry average. Solving this problem was a key priority for him, and the learning organization helped him do it.
  2. The results were business results. In neither of these cases did the Chief Learning Officer (CLO) report on how many people liked the programs. In fact, in the claims training, pretty much everyone hated it (except the CFO). The results were expressed in terms that were meaningful to corporate executives – cost containment and revenue increases.
  3. Program goals focused on job proficiency. The programs did not focus on compliance. The programs did not simply make people aware of concepts and processes. The programs required that learners demonstrate the skills they were to use on the job.
  4. Learning was a process that took the time that it took. In the first case, the program was a two-week process. In the second, it was an eight-month process. In both cases, however, the calendar and seat time was what was required to produce the required results.
  5. The programs were social. In the claim program, most of the social interaction was in the form of focused feedback from coaches. In the underwriting program, most interaction was in the form of being able to ask mentors and other learners how to handle various situations.

Are we our own worst enemies?

In the scores of companies – large and small – that I have worked with, I have observed that training programs like the ones above are the exception rather than the norm. Instead, I often see the bulk of the mind share, budget dollars, instruction and design efforts, and learner seat time focused on such things as:

  • Creating compliance training that often boils does to training “so we can say we did it,” for litigation risk management.
  • Rapidly developed eLearning that is all too often a “data dump” from subject matter experts, with little focus on (a) the skills the new worker needs, nor (b) how to best transfer the required knowledge and skills.
  • The communication and assessment of basic facts, rather than a focus on critical thinking.
  • Training events (i.e. courses and classes) rather than learning processes.

It might be an interesting exercise to audit the efforts of your training department by asking the following questions:

  • Do your activities address the key needs of corporate executives?
  • How much of your training focuses on compliance v. skill building?
  • Would line managers generally agree that after training, staff can hit the ground running, or do they believe that managers are still responsible for the bulk getting new folks up to speed?
  • What portion of your training is assessed?
  • What portion of those assessments use the metrics of the business, rather than learning metrics (i.e. Kirkpatrick Level 1 or Level 2 results)?

Bonus questions for those developing eLearning internally:

  • What portion of your eLearning courses incorporates a coherent instructional design v. simply disseminating content?
  • What portion of your development and review process focuses on catching minute grammar errors or finding the ultimate graphic for a slide?

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