10 Tips for Surviving and Thriving in Tough Economic Times

There are many circumstances that can create challenges in a learning organization’s budget. Of course, the economy leads the list of causes, but there are other contributors, such as consolidations, mergers, adding additional charters without commensurate increases in budget, and major shifts in an enterprise’s strategy. In this article, I have gathered ten tips that learning organizations are using to survive and thrive in these challenging times. TIP #1 – CHANGE THE VIRTUAL-TO-CLASSROOM MIX Many organizations suggest that the ideal ratio of virtual and classroom training is 80 percent virtual and 20 percent classroom. There is just no better way to train masses of people, especially when they are spread out over multiple sites. But instead of hiring hundreds of trainers, or maintaining expensive travel budgets, organizations are turning to virtual delivery to deal with declining budgets and expanding needs. Alice Muellerweiss, Dean of the Department of Veterans Affairs Learning University (VALU) described her opening hand of cards this way at the Enterprise Learning! Summit in March 2012: “In January 2010, when I first came over to the V.A. Learning University, I was given a budget, told that I had 16 people, and that I had to train 135,000 people in the first year. And three months were already gone.” After the initial shock, she said her wheels began to turn. “I couldn’t just go build schools and travel people. I had to change the way I thought about delivering education.” In response she turned VALU into an almost completely virtual learning organization. TIP #2 – LEVERAGE OTHER PEOPLE’S COURSEWARE This was a personal favorite of mine when I was in the private sector. In my mind, courseware fell into three tiers: >> Tier 1: “Vanilla, out-of-the-box” courses like standard training for Project Management, Microsoft, Oracle, and a host of similar offerings; >> Tier 2: "Slightly Customized" courses, which might be my own organization’s particular implementation of an SAP or Oracle product; and >> Tier 3: "Proprietary" courses which might be "our secret sauce," or training on my enterprise’s latest product offerings and services. As you move up the tiers from vanilla to proprietary, the value of the courseware to an organization increases substantially. Armed with that knowledge, I approached a vendor of mine who was a provider of thousands of courses in the Tier 1 category and asked the vendor to allow me to “slightly customize” each of their courses to meet my organization’s specific needs. These were small changes, like adding my company’s unique security requirements or our own project management methodology, but they were necessary for the courses to be meaningful in my organization. The upgrades allowed the generic courses to have the impact of a Tier 2 or Tier 3 learning solution. The vendor’s initial tendency was to resist, explaining that their off-the-shelf courses were their intellectual property. But after I explained that I would probably never be able to get rid of them once their courses were a core part of my own course offerings, they eventually relented. Our net savings were substantial. We were able to shave 80-90 percent off our curriculum development time. So look around at other departments and agencies, as well as vendors whose courseware you can leverage. TIP #3 – LEVERAGE A COMMON TECHNOLOGY PLATFORM “Consolidating our agencies onto one LMS platform … positioned us well for collaboration,” said Wendy Frederick, Chief, Learning Systems Management Division, Bureau of Alcohol, Tobacco, Firearms and Explosives. “Independently, we’re not going to be able to accomplish what we want to. Resources are far outstripped by demand. The secret is to collaborate with other agencies to accomplish our goals.” Sharing similar courses across multiple agencies is one kind of efficiency gained by having a common LMS platform. Some types of courses that might be shared include compliance training and leadership courses. A less obvious benefit of a common LMS system is discovering that groups have a common demand for a particular course. For instance, several groups might have a need for Oracle training to fill a competency gap. Combining these groups could help you reduce the cost per student trained. Instead of sending one or two people from each agency to the vendor’s class, you could arrange to have the vendor come to a common site to deliver that training to all of them. Instead of paying individually for 10 people (about $7500/day), you might find it much cheaper to have that course delivered in-house by the vendor (about $3000/day). TIP #4 – GO WITH A CLOUD/SAAS LMS SOLUTION The savings from a Cloud or SaaS LMS solution comes in many forms, when compared to an on-premise installation: >>  Speed of implementation >> Maintenance and update services handled on your behalf; >> The ability to scale up or down for seasonal training or new product training, without having to maintain that high level of capacity year-round; >> Pricing that scales up or down with your use of the system; and >> Global infrastructure leveraging. In short, going with a solution that’s supported by a vendor … who, incidentally, thoroughly understands the product … can translate into a lot of savings. The hubs would support demand coming from several satellite operations, or spokes. In satellite operations, you would only provide the top five or 10 most popular courses. This, in effect, increases class sizes for the less popular or more advanced courses, because students from various spokes would travel to the hubs to take them. In the hub-and-spoke methodology, you maximize where you deploy your delivery resources. This is a favorite technique for deploying customer and partner training, although virtual instruction is starting to obsolete brick-and-mortar strategies when hands-on training isn’t a requirement. Efficiency in classroom deployment also considers classroom capacity issues. A cost-effective approach is to configure classrooms of varying sizes, creating classrooms that can hold 12, 18, or 24 students. This allows a much more effective use of the training facility’s square footage. And if you keep the classroom sizes in even numbers, additional cost savings can be achieved by having two students share the same computer, which, as a by-product, stimulates collaboration. Implementing shared classrooms provides even more flexibility. Let’s say that you need to be prepared to flex your operation from 50 to 100 classrooms, depending on business conditions. Instead of building 100 classrooms, you could build 50 classrooms, utilize shared conference rooms for another 30, and then arrange for outside classrooms for the remaining 20. With classroom build-outs costing between $60,000 and $150,000 each, you can reduce your costs considerably by leveraging shared facilities. TIP #6 – TASKED WITH MULTIPLE CHARTERS? THINK VIRTUAL LEARNING ENVIORNMENTS (VLES) In the private sector, over 44 percent of our readers reported that they have had to take on additional charters. Internal audiences, customers, and partners are now all being trained by one learning organization. Whether the driver of this movement was the economy or efficiency, taking on multiple charters was the number one trend in the public sector as well. Let’s say that you’re one of those organizations that just picked up a charter to teach multiple partners, each with thousands of employees. Generally, mixing the partner crowd in with an internal or customer audience needs to be tempered with rules of engagement. Appropriate rules might include “no solicitation of clients” in a customer venue or “no marketing or sales challenges will be discussed” in an internal training venue. But beyond these considerations, the new charter will certainly strain existing classroom and instructor resources. To manage this, some learning organizations are setting up Virtual Learning Environments (VLEs). The VLE can operate 24/7, show presentations on demand, provide collaboration rooms, libraries of documentation, and can even offer “office hours” where an expert can be made available to answer questions. The VLE works well for a partner audience that is trying to balance their need for your product knowledge with their own company’s need for sales and implementations. TIP #7 – NOT ALL COURSES REQUIRE THE SAME DEVELOPMENT RESOURCES With curriculum development times averaging 25-40 days to produce one day of classroom training, or 100 hours to produce one hour of online training, you have to think about how you want your limited curriculum development staff spending their time. Should your best attended course get equal time with your worst attended course, just because they are both the same length? Well, you’re going to protest that it still takes the same amount of development time, right? Yes, but your exposure is much greater on your top five best-attended courses. When I was running customer education for software companies, my top five courses generated 80 percent of my revenue. These were the ones that I wanted to be impressive, because they were my team’s first exposure to a new student. So we did an ABC analysis, and decided how to allocate time and resources based on how much revenue each course was driving. We challenged ourselves to re-scope or combine the 50 percent of our courses that were generating only 20 percent of our revenue. Whatever information we did not put into our courses, we made available through electronic or other means. TIP #8 – LEVERAGE ANOTHER ORGANIZATION’S EXPERTS FOR DELIVERY OF CONTENT These can be challenging discussions, especially if you have a customer charter. Remembering back to an age-old conflict between education and consulting, it wasn’t uncommon to see a consulting resource delivering one of my classes to keep up their billable time. The solution? Sit down with the consulting team and work out a way to pay them for teaching your classes. That keeps them billable, while at the same time you get their top-line expertise. But there are other ways to leverage experts within an organization. Our top sales classes for new hires were taught by our best sales people. In fact, it was part of a regional manager’s MBOs to teach new hires. If you look around your organization you will find hundreds of ways to leverage another organization’s talents. Think about who can help you deliver new hire orientation, and you’ll see that there are hundreds of choices that the new hires might enjoy. Who wouldn’t want to hear the company’s President or the Vice President of Product Development talk about new products or services? TIP #9 – USE A VARIABLE STAFFING MODEL This is a great way to reduce one of the largest expenses in your Organization. There is always an ebb and flow in business cycles. Retailing is the best example of seasonality, but seasons also occur around tax preparation, mortgage lending, construction, and many other industries. The most effective organizations look at those seasons closely and evaluate the amount of fluctuation occurring in their staffing needs. That fluctuation is then translated into a variable staffing model that relies on outsourced resources to fill the gap. If you experience a 20 percent shift in demand, then you might plan on outsourcing 20 percent of your staff. This stabilizes your internal staffing considerably, which is a great benefit in uncertain economic times. TIP #10 – REVIEW COMPETENCY MAPS In a competency-driven world, it’s not uncommon to find thousands or even tens of thousands of competencies being defined in larger organizations. It is those competencies, and their gaps, that drive much of your internal training business. Some of the largest enterprises are now creating committees to review those competency maps to streamline them across departments or Agencies. Leadership is a common one that gets multiplied by minor derivations in competencies. Those minor derivatives often translate into multiple courses, with fewer attendees in each. Standardizing competencies across the enterprise reverses that inefficiency. Let us know if you found these tips and techniques helpful. You can contact Joe DiDonato at jdidonato@2Elearning.com if you wish to share what your organization did to “survive and thrive,” and we’ll share that information in our blog at http://blogs.2Elearning.com. TIP #5 – STREAMLINE CLASSROOM MODELS: CREATE HUBS, SPOKES, AND SHARED FACILITIES The hubs-and-spokes methodology is kind of analogous to how airline industry routes planes. It can help you maximize the impact of your classroom-based services. Instead of teaching all of your courses in every single location, this methodology uses a regional approach. For example, in the US market, you might establish four main hubs: Washington DC, Chicago, Dallas, and San Francisco. You would offer all of your courses in these locations, including the smaller, more advanced courses. There are many circumstances that can create challenges in a learning organization’s budget. Of course, the economy leads the list of causes, but there are other contributors, such as consolidations, mergers, adding additional charters without commensurate increases in budget, and major shifts in an enterprise’s strategy. In this article, I have gathered ten tips that learning organizations are using to survive and thrive in these challenging times. TIP #1 – CHANGE THE VIRTUAL-TO-CLASSROOM MIX Many organizations suggest that the ideal ratio of virtual and classroom training is 80 percent virtual and 20 percent classroom. There is just no better way to train masses of people, especially when they are spread out over multiple sites. But instead of hiring hundreds of trainers, or maintaining expensive travel budgets, organizations are turning to virtual delivery to deal with declining budgets and expanding needs. Alice Muellerweiss, Dean of the Department of Veterans Affairs Learning University (VALU) described her opening hand of cards this way at the Enterprise Learning! Summit in March 2012: “In January 2010, when I first came over to the V.A. Learning University, I was given a budget, told that I had 16 people, and that I had to train 135,000 people in the first year. And three months were already gone.” After the initial shock, she said her wheels began to turn. “I couldn’t just go build schools and travel people. I had to change the way I thought about delivering education.” In response she turned VALU into an almost completely virtual learning organization. TIP #2 – LEVERAGE OTHER PEOPLE’S COURSEWARE This was a personal favorite of mine when I was in the private sector. In my mind, courseware fell into three tiers: >> Tier 1: “Vanilla, out-of-the-box” courses like standard training for Project Management, Microsoft, Oracle, and a host of similar offerings; >> Tier 2: "Slightly Customized" courses, which might be my own organization’s particular implementation of an SAP or Oracle product; and >> Tier 3: "Proprietary" courses which might be "our secret sauce," or training on my enterprise’s latest product offerings and services. As you move up the tiers from vanilla to proprietary, the value of the courseware to an organization increases substantially. Armed with that knowledge, I approached a vendor of mine who was a provider of thousands of courses in the Tier 1 category and asked the vendor to allow me to “slightly customize” each of their courses to meet my organization’s specific needs. These were small changes, like adding my company’s unique security requirements or our own project management methodology, but they were necessary for the courses to be meaningful in my organization. The upgrades allowed the generic courses to have the impact of a Tier 2 or Tier 3 learning solution. The vendor’s initial tendency was to resist, explaining that their off-the-shelf courses were their intellectual property. But after I explained that I would probably never be able to get rid of them once their courses were a core part of my own course offerings, they eventually relented. Our net savings were substantial. We were able to shave 80-90 percent off our curriculum development time. So look around at other departments and agencies, as well as vendors whose courseware you can leverage. TIP #3 – LEVERAGE A COMMON TECHNOLOGY PLATFORM “Consolidating our agencies onto one LMS platform … positioned us well for collaboration,” said Wendy Frederick, Chief, Learning Systems Management Division, Bureau of Alcohol, Tobacco, Firearms and Explosives. “Independently, we’re not going to be able to accomplish what we want to. Resources are far outstripped by demand. The secret is to collaborate with other agencies to accomplish our goals.” Sharing similar courses across multiple agencies is one kind of efficiency gained by having a common LMS platform. Some types of courses that might be shared include compliance training and leadership courses. A less obvious benefit of a common LMS system is discovering that groups have a common demand for a particular course. For instance, several groups might have a need for Oracle training to fill a competency gap. Combining these groups could help you reduce the cost per student trained. Instead of sending one or two people from each agency to the vendor’s class, you could arrange to have the vendor come to a common site to deliver that training to all of them. Instead of paying individually for 10 people (about $7500/day), you might find it much cheaper to have that course delivered in-house by the vendor (about $3000/day). TIP #4 – GO WITH A CLOUD/SAAS LMS SOLUTION The savings from a Cloud or SaaS LMS solution comes in many forms, when compared to an on-premise installation: >>  Speed of implementation >> Maintenance and update services handled on your behalf; >> The ability to scale up or down for seasonal training or new product training, without having to maintain that high level of capacity year-round; >> Pricing that scales up or down with your use of the system; and >> Global infrastructure leveraging. In short, going with a solution that’s supported by a vendor … who, incidentally, thoroughly understands the product … can translate into a lot of savings. The hubs would support demand coming from several satellite operations, or spokes. In satellite operations, you would only provide the top five or 10 most popular courses. This, in effect, increases class sizes for the less popular or more advanced courses, because students from various spokes would travel to the hubs to take them. In the hub-and-spoke methodology, you maximize where you deploy your delivery resources. This is a favorite technique for deploying customer and partner training, although virtual instruction is starting to obsolete brick-and-mortar strategies when hands-on training isn’t a requirement. Efficiency in classroom deployment also considers classroom capacity issues. A cost-effective approach is to configure classrooms of varying sizes, creating classrooms that can hold 12, 18, or 24 students. This allows a much more effective use of the training facility’s square footage. And if you keep the classroom sizes in even numbers, additional cost savings can be achieved by having two students share the same computer, which, as a by-product, stimulates collaboration. Implementing shared classrooms provides even more flexibility. Let’s say that you need to be prepared to flex your operation from 50 to 100 classrooms, depending on business conditions. Instead of building 100 classrooms, you could build 50 classrooms, utilize shared conference rooms for another 30, and then arrange for outside classrooms for the remaining 20. With classroom build-outs costing between $60,000 and $150,000 each, you can reduce your costs considerably by leveraging shared facilities. TIP #6 – TASKED WITH MULTIPLE CHARTERS? THINK VIRTUAL LEARNING ENVIORNMENTS (VLES) In the private sector, over 44 percent of our readers reported that they have had to take on additional charters. Internal audiences, customers, and partners are now all being trained by one learning organization. Whether the driver of this movement was the economy or efficiency, taking on multiple charters was the number one trend in the public sector as well. Let’s say that you’re one of those organizations that just picked up a charter to teach multiple partners, each with thousands of employees. Generally, mixing the partner crowd in with an internal or customer audience needs to be tempered with rules of engagement. Appropriate rules might include “no solicitation of clients” in a customer venue or “no marketing or sales challenges will be discussed” in an internal training venue. But beyond these considerations, the new charter will certainly strain existing classroom and instructor resources. To manage this, some learning organizations are setting up Virtual Learning Environments (VLEs). The VLE can operate 24/7, show presentations on demand, provide collaboration rooms, libraries of documentation, and can even offer “office hours” where an expert can be made available to answer questions. The VLE works well for a partner audience that is trying to balance their need for your product knowledge with their own company’s need for sales and implementations. TIP #7 – NOT ALL COURSES REQUIRE THE SAME DEVELOPMENT RESOURCES With curriculum development times averaging 25-40 days to produce one day of classroom training, or 100 hours to produce one hour of online training, you have to think about how you want your limited curriculum development staff spending their time. Should your best attended course get equal time with your worst attended course, just because they are both the same length? Well, you’re going to protest that it still takes the same amount of development time, right? Yes, but your exposure is much greater on your top five best-attended courses. When I was running customer education for software companies, my top five courses generated 80 percent of my revenue. These were the ones that I wanted to be impressive, because they were my team’s first exposure to a new student. So we did an ABC analysis, and decided how to allocate time and resources based on how much revenue each course was driving. We challenged ourselves to re-scope or combine the 50 percent of our courses that were generating only 20 percent of our revenue. Whatever information we did not put into our courses, we made available through electronic or other means. TIP #8 – LEVERAGE ANOTHER ORGANIZATION’S EXPERTS FOR DELIVERY OF CONTENT These can be challenging discussions, especially if you have a customer charter. Remembering back to an age-old conflict between education and consulting, it wasn’t uncommon to see a consulting resource delivering one of my classes to keep up their billable time. The solution? Sit down with the consulting team and work out a way to pay them for teaching your classes. That keeps them billable, while at the same time you get their top-line expertise. But there are other ways to leverage experts within an organization. Our top sales classes for new hires were taught by our best sales people. In fact, it was part of a regional manager’s MBOs to teach new hires. If you look around your organization you will find hundreds of ways to leverage another organization’s talents. Think about who can help you deliver new hire orientation, and you’ll see that there are hundreds of choices that the new hires might enjoy. Who wouldn’t want to hear the company’s President or the Vice President of Product Development talk about new products or services? TIP #9 – USE A VARIABLE STAFFING MODEL This is a great way to reduce one of the largest expenses in your Organization. There is always an ebb and flow in business cycles. Retailing is the best example of seasonality, but seasons also occur around tax preparation, mortgage lending, construction, and many other industries. The most effective organizations look at those seasons closely and evaluate the amount of fluctuation occurring in their staffing needs. That fluctuation is then translated into a variable staffing model that relies on outsourced resources to fill the gap. If you experience a 20 percent shift in demand, then you might plan on outsourcing 20 percent of your staff. This stabilizes your internal staffing considerably, which is a great benefit in uncertain economic times. TIP #10 – REVIEW COMPETENCY MAPS In a competency-driven world, it’s not uncommon to find thousands or even tens of thousands of competencies being defined in larger organizations. It is those competencies, and their gaps, that drive much of your internal training business. Some of the largest enterprises are now creating committees to review those competency maps to streamline them across departments or Agencies. Leadership is a common one that gets multiplied by minor derivations in competencies. Those minor derivatives often translate into multiple courses, with fewer attendees in each. Standardizing competencies across the enterprise reverses that inefficiency. Let us know if you found these tips and techniques helpful. You can contact Joe DiDonato at jdidonato@2Elearning.com if you wish to share what your organization did to “survive and thrive,” and we’ll share that information in our blog at http://blogs.2Elearning.com. TIP #5 – STREAMLINE CLASSROOM MODELS: CREATE HUBS, SPOKES, AND SHARED FACILITIES The hubs-and-spokes methodology is kind of analogous to how airline industry routes planes. It can help you maximize the impact of your classroom-based services. Instead of teaching all of your courses in every single location, this methodology uses a regional approach. For example, in the US market, you might establish four main hubs: Washington DC, Chicago, Dallas, and San Francisco. You would offer all of your courses in these locations, including the smaller, more advanced courses.

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