This month we are focusing on the economic model of learning. Dave Wilkins, a long time colleague and wonderful friend, was kind enough to share one of my favorite articles he has written with us. It was originally printed in Learning Solutions magazine.

Dave Wilkins is a well known though leader in our industry. He speaks around the country on topics such as Social Learning and Adaptive LMS trends.

The Learning Long Tail

A few years ago, I read a book that changed my thinking across several subjects including economics, personal choice, networks, and popularity. More recently, it’s also changed my thinking about the way we conduct, deliver and manage corporate learning. More on that in a bit. The book was The Long Tail: Why the Future of Business is Selling Less of More. I read it at the request of a colleague and devoured it cover-to-cover during one long plane ride from Boston to San Francisco. I couldn’t put it down.

The Long Tail covers a lot of ground, but the main argument is that traditional economic models, the ones predicated on concepts of scarcity and physical goods, don’t do a great job of explaining the economics of digital assets. An example of a physical goods market is the music section in your local Walmart. There is a limited amount of physical space available to stock CD’s. To make a profit, those CD’s need to sell a certain number of copies each month. It’s a classic supply and demand economic scenario.

So how does Walmart decide which CDs to stock? It’s simple really; they just sell the biggest hits in the broadest music genre’s: Pop, Rock, Country, Jazz. You aren’t going to find many Punk Rock or Afro-Cuban Jazz albums at your local Walmart. In fact, 99% of the albums on the market today aren’t sold at your local Walmart.

On the other hand, you will find over 65 Afro-Cuban Jazz albums on iTunes. And a whole lot of everything else too. Unlike Walmart and physical retailers, electronic retailers like iTunes, Netflix, Amazon sell digital assets. They have unlimited shelf-space. They can “stock” as much as African Cuban Jazz as they want. More importantly, research shows that it will sell.

In every year since iTunes began, they have sold at least one copy of every single title they offer. Moreover, these one or two unit sales across millions of “less popular” items add up to millions and millions of sales. A quarter of Amazon’s book sales come from outside its top 100,000 titles. By contrast, the same top 100,000 titles are the full extent of the sales offering at your local Borders bookstore. It’s the Walmart music section on a broader scale – a larger set of offerings, but still heavily dependent on physical space and high sales per item.

Borders and Walmart are selling what’s known as the “short head” – the most popular, blockbuster sort of titles. Amazon is also selling the “short head,” but they also sell the “long tail” – the millions of less popular titles that might only sell a few copies a year. Through recommendation engines, ratings, reviews, and various other filtering techniques, shopping portals like Amazon, iTunes, and Netflix enable buyers to find and pursue content deep into the overall collection. For the first time, non-hits and niche content can be found as easily as summer blockbusters and the weekly top 40.

Implications for Learning

So what does all of this have to do with learning? Quite a bit actually. As learning professionals, we have our own economics of shelf space, “sales per item,” and scarcity. Our “shelf space” isn’t limited by physical space, but by time, the time available in a given week that learners can dedicate to training. Think of the shelf as a 40 hour work week. Most of the shelf is filled with work-related tasks, the individual production of each employee that contributes to the overall success of the organization. Within this larger shelf of hours, a relatively small percentage is dedicated to training and development. It might be just 5-10% of the overall shelf space.

Given the limited shelf space we have available, what do we offer to our buyers, Afro-Cuban Jazz or the Top 40? Think about it. We offer the Top 40, the hits, and the summer blockbusters. In the world of training, these are compliance, certification, and curriculum – the content that the greatest majority of learners must know. Even when we buy large libraries of off-the-shelf content, the libraries themselves are filled with the “hits” – OSHA compliance, Word, PowerPoint, Excel, Leadership Development etc…

There is nothing wrong with any of this. In fact, given the economics of the situation, this is exactly what we should offer – knowingly or not, we are following tried-and-true economic models. We are also limited by our own resource scarcity. Some training departments struggle even to deliver the Top 40. Throw in a few high-priority initiatives like a major application roll-out, a new product offering, or a change in corporate direction, and the typical training organization thinks immediately about outsourcing to one of thousands of custom content training companies that exist for just this reason.

Creating a Learning Long Tail

So now that we know what we are, the next question is “what do we want to be?” First, ask yourself if, in your current model, you are satisfying all of the learning demands of your buyers. Most research shows that 80% of the work people do on the job is learned outside formal learning. Clearly our buyers do have other interests and demands. Today, they are satisfying them outside of our formal channels through peer-to-peer exchange, email, one-off phone calls, water cooler conversation, and time-of-need mentoring. In other words, when they can’t find what they want in the “short head” offerings from their training department, they source their needs through the “long tail” expertise that exists in the information cloud of their extended network. They leave Walmart and buy from Amazon.

In other words, our learners are already living in the Learning Long Tail; the problem is that we’re not. It’s happening as a black market knowledge exchange over which we exert no influence, let alone control. We can’t report on it. We don’t even know who is participating and what they are discussing. We don’t know whether the information is accurate. Worse, almost all of the time learners spend finding and sharing good information isn’t leveraged by any other learners. Nearly all of the exchanges happen as one-off’s that are not captured or shared with any other learners.

Fortunately, the solution to all of these issues – the formalizing of learners’ informal exchanges – also provides a mechanism for increasing our shelf space, decreasing our costs for production, turning our content creation scarcity into abundance, and providing methods of oversight and approval for sensitive topics. What does it mean to formalize learners’ informal exchanges.

• Provide learners with the tools to share their own expertise: course creation, virtual classroom, discussions, chat, blogs, and customizable social profiles at a minimum.

• Provide learners with a place to share their assets: file exchanges, course uploads, publishing of virtual classroom schedules, shared spaces where they can chat, discuss and blog about specific topics and interest areas.

• Enable robust reporting on producers, consumers, and “hot” topics. Who is creating? What is being created? And who is consuming it? What are the trends?

• In addition to deep search, also include filtering technology like ratings, reviews, comments, and recommendation engines to help learners go deep into your content stack.

• Routing technology and process to ensure that sensitive topics are reviewed and approved before being submitted, and inaccurate material is flagged and removed before it can cause any damage.

• Notification and subscription mechanisms to automatically alert learners to new updates, replies, and edits to topics of interest.

Benefits of a Learning Long Tail

Approaches like those noted above help us move a lot closer to an Amazon or iTunes model. They ensure, first and foremost, that the content we’re all sharing is accurate and approved, particularly for sensitive subjects. They also enable us to increase our shelf space, not by adding more hours to the week, but by decreasing the length and changing the nature of the content. Participating in a discussion about work is a very different experience than taking a two hour long course on the same subject. The former is collaborating as “part of” a learner’s work; the latter is “taking training” about the work. The shelf space for the first activity is the learner’s entire work week; the latter is still bound by limitations on training interventions.

The costs of production in this model also change. The size of the training organization is the size of the company itself, maybe even the extended enterprise if you are willing to include partners, suppliers, and resellers. The costs of production are therefore spread across the collective contributors rather than just one central pool of instructional design experts. This also means that the challenge of resource scarcity in creating content is replaced with resource abundance, both in terms of content producers and in terms of the content itself.

Just as in the Long Tail of economics, the Long Tail of Learning is a theory of abundance, where learners have more opportunities to learn and teachers have more opportunity to teach. It's a world where everyone is both a teacher and a learner, where the content as varied as the work and as deep as the need. It's a world where the work is the learning and the learning is the work, and where traditional notions of training budgets and employee development time are augmented by flatter, more open models.

Does this mean certification, compliance, and curricula go away? No, of course not. Even with iTunes and Netflix and Comcast OnDemand, there are still hit shows, Top 40 music, and blockbuster movies. As we begin providing formal support and infrastructure to support our organization’s learning long tail, we still need to create, manage, and deliver the “short head.” What might this combined model look like?

The shift here lies in recognizing that every organization has a short head and a long tail. In formal, heavily regulated industries, more focus may need to be paid to the short head. In consulting or technology companies, perhaps more focus should be placed on the long tail. The Long Tail theory provides a model to think through these strategies, helping you to focus resources and development dollars in ways that deliver the most value and impact to your organization.

Citations

Anderson, Chris. (2006). The Long Tail: Why the Future of Business is Selling Less of More. New York. Hyperion.

Talent Management 2.0

Increasingly, organizations are beginning to realize that maintaining completely separate systems for talent management and learning management doesn't make a whole lot of sense. Neither system is really complete on its own. Talent management solutions enable companies to deeply track and manage skills and competencies, job profiles, career and succession plans. Learning management solutions enable companies to deeply track courses, certifications, compliance, and completions.

What really matters to most companies though is not whether someone already has a particular competency or has taken a particular course; what matters is how they best identify skill and competency gaps and remediate those through learning interventions. This is where the magic happens.

Unfortunately, this magic has been a bit tough to conjure up. Talent management suites have done a great job of helping organizations manage their talent and talent gaps, but they haven't been as great about the next inevitable question: "what do I do about it?" Learning management systems have done a great job in answering the "what do I do about it?" question, but have historically not been as good at answering "who needs the training and how is this tied to larger organizational goals?", an area where Talent Management solutions have made great strides.

Fortunately many LMS's are beginning to bridge that gap through skill gap analysis, searchable job profiles, and an ability to tie learning to specific goals. Additionally, with the changes made possible by advancements in technology, it's now possible to seamlessly combine best-of-breed solutions via web services integrations, REST API's, and single sign-on protocols, enabling organizations to go deep in both talent and learning management without sacrificing the benefits that come from sharing data about users, profiles, competencies, learning etc....

The benefits of such combined talent and learning solutions are beginning to catch the eye of analysts. Just recently, Josh Bersin of Bersin and Associates wrote an article about the business impact of advanced talent management offerings.

According to Josh, organizations with advanced talent management have

• 17% lower voluntary turnover rates

• 41% lower turnover rates among high performers

• 26% higher median revenue per employee

These same organizations are also

• 28% less likely to have had a major layoff in 2009
• 109% more capable of retaining high performers
• 87% more capable of "hiring the best people"
• 92% better at "responding to current economic conditions"
  
• 144% better at "planning for future talent needs."

Integrated talent management strategies that include both traditional talent management and learning management enable an increased focus on performance and tighter alignment of organization goals with organizational capabilities. As more and more companies embrace an integrated strategy and realize business benefits like those outlined by Bersin & Associates, organizations who still treat talent and learning as separate solos will find themselves outmaneuvered and outperformed by their competition.

Staying on Top of Learning Trends

Social learning. Mobile learning. Virtual worlds. Twitter. Social media. How do you keep up with it all? Conferences? Trade magazines? Analyst reports? All of these are great channels to be sure, but in the last few years, some new ones have emerged that provide weekly, even daily updates about what's going on in our space: blogs, Twitter chats, and learning communities. Some of our industry's biggest thought leaders: Jay Cross, Harold Jarche, Ray Jimenez, Clark Quinn, Jane Bozarth, Tony Karrer, Kevin Jones, Jeanne Meister - all update their blogs at least weekly, some daily. Why wait for a conference when you can hear their thoughts on a daily basis?

Many of these same thought leaders also participate in a weekly Twitter chat on Thursday nights from 8:30pm - 10:00pm EDT. The topic for last week was Virtual Worlds. The week before it was about Using Social Media to Support Live Events. Before that, the topic was Instructional Design: what's working well in today's world, and what do we need to change. While the topics themselves are great, the bigger value is the public exchange of ideas among thought leaders and "in-the-trenches" practitioners in our space. It's a great way to pick up new best practices and to keep up with the latest trends. For more on how to participate in the weekly LrnChat and to see a transcript of previous events, you can follow the LrnChat blog: http://lrnchat.wordpress.com/

Another great venue for connecting with your professional colleagues and industry experts are various learning communities that have been started by analysts and thought leaders in our space. One of the best is "Corporate Learning Trends and Innovations," a Ning group that was started by Jay Cross: http://learntrends.ning.com/. With 2,200 members, 137 discussion topics, and near weekly events hosted and run by members, it's a great resource to keep up with new trends in our space while forging new professional connections. Just last week, Tony Karrer hosted a four hour event where he invited vendors to discuss the latest trends in the learning space and to share their roadmaps as they adapt to the changing technology and demographic profiles in the workplace.

Other examples of learning communities include LearningTown which is run by Elliott Masie: http://www.learningtown.com/. LearningTown has over 8,000 members, 59 groups, and hundreds of discussion threads. The ELearning Guild (http://www.elearningguild.com/), run by Heidi Fisk, Brent Schlenker, and Bill Brandon, has 35,000 members and thousands of research documents and discussions. Many other conferences and analysts also have mini-communities of practice through Facebook and Linkedin "groups." Some of these can be quite active.

The best part about all of these social networking and community sites is that they increase the value and benefits of your other, more formal channels. While it's great to read about a topical subject in a monthly trade magazine like T+D or Talent Management, these resources provide even more value when you've had similar discussions on LrnChat or in a discussion forum on a community learning site. And how great would it be to meet-up with community or Twitter connections at live events like industry conferences. You instantly deepen your relationships and turn weak connections into stronger ones. Mixing the newer social channels with more traditional information channels can keep you more tightly plugged into trends, expand your professional network, and help you provide even greater value to your organization.

The Greening of the Training Company

There are many factors driving companies to go green these days, from the obvious cost savings, the diminished impact to the environment, to the benefits of the corporate image, and even the simple fact that it feels good to do good.

Going green is an area where the training department can have an immediate and measurable impact on the organization. Sustainability requires new ways of thinking and doing, and training is often the starting point for an organization's program rollout. We see that many times, going green is part of a larger change management rollout and training often leads this charge. By effectively training your organization on a green initiative, you are turning all employees into eco-friendly citizens.

Another area where the training department can have a material impact on a green initiative is in the methods used by the department. I see a shifting of more and more training done on-line. Whether education is done through more formal eLearning classes, informal collaboration tools, or through web conferencing, the savings are huge when compared to classroom training. Add up the cost of travel, expenses, and facilities and then add on the impact to the environment, and you have a strong case to go on-line and go green for training.

That being said, I would never suggest that all training should be done on-line. The good news is that instructor led training can also be part of the green initiative. Installing energy saving light bulbs and energy efficient computers in training rooms are great examples of positive environmental impact.

An extremely cost effective way to green your training is by going paperless as much as possible. Use on-line job aids to reinforce training, instead of printed handouts. The use of on-line libraries of books has become extremely popular, where the learner can search for the exact information they need and print out only those pages. Encourage this behavior and you will become a Green Ambassador in your organization.

I can't stress my last point enough: document EVERY change you make and assign a dollar amount to it. Remember that you are either increasing revenues or decreasing costs so make sure that you're getting credit for all of the good you are doing for the environment, your company, your department, your fellow employees, and for yourself.

As with all initiatives, a green program has to make good business sense. Always look for the synergies between your business initiatives and the environment. When you've found the overlap between profit and public good, you've found the sweet spot.

Show me the Money!

Do you ever hear the question "What will we get out of this?" when a new training program or learning tool is proposed?

88% of companies rate the impact of training experiences on performance as very high, as well as the importance of identifying ROI for both training and development. Unfortunately, only 27% actually utilize some sort of metric.*

I believe that we would be hard pressed to find anyone that would disagree that the importance of measuring return on investment isn't important. I also believe that Training and Development organizations are more hard pressed these days to do more with less than most other divisions.

Yet the VALUE that training and development provides is SIGNIFICANTLY important ESPECIALLY in a downward economy.

Fact: The U.S. Department of Labor Turnover Calculator assumes that a $90,000 per year employee costs the Company $370,000.

When the cost per employee is high, how much value do we place on the effectiveness of that employee? How can they be effective without proper training and support? And how do we clearly communicate how critical it is to continue to invest in training? How do we communicate effectiveness in such a way to get the ear of those that hold the pen to the checkbook?

I believe that developing a good business case isn't rocket science, but for many it can be overwhelming. There is no way in this short newsletter to convey all there is to share on the topic of building a good business case and developing ROI, especially as it pertains to training and performance. What I CAN do is provide a few links for you for some excellent reference materials.

A GREAT ROI case study.

Extra Space Storage recently acquired a much larger rival, vaulting
it into the number two spot in the U.S. self-storage industry. The
merger triggered an urgent need to align employees from the newly
purchased company to the goals of Extra Space Storage - not only
to ensure a consistent customer experience from coast to coast,
but also to minimize employee turnover, boost productivity and
comply with regulatory requirements.

In order to reach a geographically dispersed audience with
little time for classroom training, Extra Space Storage turned to
e-learning and learning management system technology. For a
relatively small corporate learning organization, the LMS is a
resource multiplier, enabling a nine-person training group to
deliver more than 250,000 training hours per year, with an average
of 136 hours per year for newly hired employees.

Click here to request the full case study.

The Myths & Mysteries of ROI

Patti P. Phillips, President & CEO of the ROI Institute, will discuss the high level considerations most organizations face when thinking about developing a strategy to measure the return on investment in learning programs. This session will explore the myths and mysteries of the use of ROI and why it has become a significant tool for the learning and development function, the use of ROI as a measurement tool , how ROI is the answer to increasing funding, building support for learning and development, and improving major projects and programs and more.

Click here to request the archived webinar.

A GREAT Read

The second edition of this bestselling book, 'Return on Investment in Training and Performance Improvement Programs,' guides you through a proven, results-based approach to calculating the Return on Investment in training and performance improvement programs. Author Jack J Phillips.


*Return on Investment in Training and Performance Improvement Programs, Jack Phillips, p.6, Google Books.

Are we off track with tracking??

In the learning world, the validation of what we do is done through tracking. Are we offering the correct training? Is it in the proper format? Is it the correct venue? If we are audited, can we access the necessary reports?

We track many things; knowledge assessments, certifications, compliance issues and smile sheets just to name a few. We look at what questions people got wrong or right, track if they liked the course, measure overall knowledge, examine skill sets and learning gaps. But what about this idea of adding social learning to the mix?

A question I hear often is how do we measure the effectiveness of 2.0 technology when it comes to a learning organization? How can we decide if social learning will ultimately be helpful? And if we do think it might, how do you manage that?

My first thought is why do we need to measure social learning at all? If people are connecting with others through forums or chat rooms, if they are accessing documents that others have posted, if they are commenting on courses, learning is taking place!

I understand that measuring the value of new technology to the cost to implement is critical, but I propose that we revisit WHAT we are measuring. Instead of tracking how many clicks, or how many posts, or how many documents were reviewed, why not back up and include this in a bigger view. What about looking at overall performance when related to job knowledge, product knowledge, job satisfaction, etc.

Creating a baseline survey to determine what is important within the organization is a big task, but ultimately can provide extremely valuable information....as long as the initial baseline is well thought through and the measurable is just that...measurable.

We will always need to report on information that involves compliance and certification, and I believe will always need to have a finger on the pulse of number of ILT classes vs. online and the value of an individual course. When we open Pandora's box of social learning, those lines become fuzzy but I believe the value goes up tenfold. Revisiting how to measure that success takes time, but ultimately will pay off for your organization.

The point? Track what needs to be tracked, create appropriate measurements at the beginning, and give social learning a chance!

If I hear any more about our economy I just might throw up, however.....

So I do get queasy turning on the news or picking up a paper and watching what is happening in our economy. The stock market gives your stomach a better flip than the latest ride at your local theme park.

Before you run for that barf bag, consider this.

Perception is that training and development gets whacked every time an organization needs to cut costs. True, it certainly can been seen as overhead. But there IS good news! At my company, I am witnessing companies making purchasing decisions for learning every week. Why?

Even though it does cost money to provide training, there are two very REAL points to consider. One is that it is now more important than EVER to make sure that your employees are performing at peak. They need to be more efficient, more effective, work that much harder, and go that extra mile. They need to have the product information or business practice documentation at their fingertips, if not seared into their brain. Providing optimum, just in time learning so that human performance is at it's best is CRITICAL.

Second, classroom training is expensive. Companies are looking for ways to cut costs yet still maintain excellence. Providing appropriate types of learning in an online format, either with a virtual class or with an online course is a wonderful and efficient way to not only potentially cut costs, but often increase retention.

So the next time you think the sky is falling, be encouraged. In the world of learning there is opportunity to see that sun shine.