Are You Spending Too Much on Training by Spending Too Little?




Costs cannot be viewed in a vacuum. They must be related to results.

Focusing training/learning resources on business-driven results is the best and most effective cost control. Costs are incurred for the sake of a result.

No matter how cheap or efficient a training effort, it's a waste, rather than a cost, if it's impossible to achieve expected or promised results.

Bottom line: If a training expenditure is deemed incapable of producing either business-driven and/or or needed core competency results from the very beginning, it must be viewed as a " match to money " initiative.

That said, in many instances "convenient rationalization" or lack of understanding of the subject matter being taught has caused many an ITO to spend too much on training by spending too little.

Two Ways You Can Spend Too Much By Spending Too Little

  1. You can spend more than you should spend to achieve the objective (s) you've set and are achieving; and, less obviously,
  2. You can spend too little, thereby making it impossible to achieve the objectives you've set out to achieve and wasting at least part of the funds you're spending to do the impossible with them.

Paradoxically, you can spend too much by spending too much or too little.

Outcome Versus Output/Efficiency Measurements

Internal service organizations of all kinds can be likened to government agencies. The internal training organization is an internal service organization.

Back in1993, David Osborne and Ted Gaebler published their national best-seller "Reinventing Government."

It contains one of the best discussions on the difference between measuring process/efficiency and measuring results. (Even though we're using a government example, most training executives will see the relevance to their internal training organization).

Said Osborne and Gaebler, "When the vast majority of government agencies set out to measure performance, their managers usually draw up lists that measure how well they carry out some administrative process: how many people they serve; how fast they serve them; what percentage of requests are filled within a set period of time...

… In essence, they measure their volume of output. But outputs don't guarantee outcomes…

……A vocational school might pump out more and more graduates of a welding program, for instance. But if those graduates can't find jobs as welders, what good is the program?…

… It may be generating impressive outputs without generating any positive outcomes…"

A Six Sigma/Statistical Process Control Manufacturing Example

W. Edwards Deming was a pioneer in quality management.

Indeed, he was truly an advocate for the use of Walter Shewhart of Bell Labs’ mid-1920s invention of statistical process control (SPC) as the method of choice to locate the root causes of problems in specific processes.

In a manufacturing process the cost associated with scrap, rework inspection, re-inspection, field service calls, warranty claims, returned items and the like can be calculated before a Six Sigma/SPC training program is initiated.

If these cost metrics are significantly reduced as a result of an SPC training program, the return on training investment can be computed given the before-and-after metrics.

Just to be clear: Deming showed how to apply SPC to processes of all kinds including those of hospitals, government agencies, internal service organizations and the like.

Why Many Organizations Wasted Huge Sums Of Money On SPC Training

In truth, Deming's SPC approach failed/stumbled in many organizations.

It's wonderful employees claim "the training program was great." However, the program could be of little value if it'ss not converted into measurable improvements in performance.

Many well-taught SPC programs produced zero results in terms of measurable improvements in given processes.

Oversimplifying a bit, let's just say the most successful SPC programs were specifically related to given processes that were studied by professional SPC experts & the right way to sample and carry-out the necessary SPC tasks were organized into a step-by-step learning program.

A Useful Digression

In essence, this is really the essence of Frederick Winslow Taylor's system of "Scientific Management." All work must first be studied, analyzed and divided into a series simple tasks.

Each task has to be done in one right way and systematically taught to those who are charged with the performance of those tasks.

Oral and written mastery of a given subject matter does not (in many training situations) guarantee successful outcomes.

Back To Our SPC Example

Off-the-shelf SPC training programs didn't work in the great majority of situations. Why? Because it couldn't be applied to the specific processes of the organization.

Only when SPC training was related to the organization's processes, and those responsible for a given process were taught exactly what to do and how to do it, did the training produce desired improvement metrics.

Our point? You can spend too much by spending too little.

The Rhetoric Of Six Sigma Process Improvement Training Budgets

Without doubt, the buying behavior of many Six sigma/process improvement training groups was/is heavily influenced by budget restraints. Deep down, many training executives know the limitations of what they’re purchasing.

However, they rationalize their behavior with a statement such as: “We’re only doing what top management asked us to do... We’ll do the best we can under the circumstances."

The Deming SPC methodology was stalled or has been abandoned in many organizations because training was ineffective in terms of promised results.

A typical episode between an internal training organization and a first-rate vendor of quality training/process improvement training programs was often characterized by the following dialogue:

Training Group: Tell us the steps we must follow to get our quality/process improvement training program started.

Supplier: We’d like to send in a data collection expert to generate measurements relating to specific processes and compute or obtain actual measurements related to scrap, rework, inspection, re-inspection, warranties and services and cost. From this he would develop a case study using your company’s own data.

Training Group: How much will that cost?

Supplier: We don’t really know until we review your processes. We could probably give you a better answer after the first week.

Training Group: We can’t do that. We must know now. What happens if you tell us you need five or six weeks? Our budget is not large enough. We have to train a lot of people in quality improvement.

Supplier: We just can’t know until we study the problem. We want to give your people real problems. We want them to craft solutions to actual problems. That’s the only way we can provide meaningful performance consulting.

Training Group: We just don’t have the budget for this. Let’s get started without doing these extras. Let’s see how it goes. Maybe we can convince our management to go along with what you suggest, but not now.

Supplier: Again, our training program also involves performance consulting. We go out on the plant floor with the employees. We first teach them what to do and how to do it. Then we ask them to do it under the guidance of a real pro, of course.

Next, we work with them to do the required analysis and implement the needed changes. We repeat this process several times until we’re sure they’ve got it. This is what we call training. It’s a lot more than education or awareness.

Training group: Doesn’t that extend beyond the three days we’ve specified in our RFP?

Supplier: Yes, but how else are we going to train your people? We don’t want to provide “hit and run training?’ Great lectures produce smiles, but smiles are not enough. Lectures are just a preparation for real learning.

Training Group: We’re sure you’re right. But we can’t afford it. You’ll just have to do it the old fashioned way. If management wants us to train 645 people in quality improvement, we must bring down the price to an affordable per student cost. Maybe you can throw in the extras. Remember, we’re going to be training 645 people. And if it works, maybe 2,000 more employees.

Supplier: But how can we make the program problem-specific and relevant to each group? Each group is involved with different processes. We could use textbook examples. But our experience indicates that doesn’t really work when it comes to teaching quality improvement via the use of control charts…

… Also, performance support and just-in-time training usually implies solving real problems. How can we generate real problems if you don’t have a budget for it? Wouldn’t it be better to “pilot” a program? Let us do it for just one group…

…Then, we can “dollarize” the before-and-after performance measurements. You can prove to yourselves and your management that there’s a big payoff if done right…

Training Group: Our management doesn’t want to hear this. They want us to train employees in quality/process improvement at the lowest possible price. If you can’t do it the way we want, we’ll get somebody else.

Supplier: Okay, we’ll do it your way. But just think about what we just discussed, pethaps we can run an experiment. Let’s see which one has a greater return.

Training Group: Fine, but when can you start training our first set of employees?

Supplier: We’ll begin the education process next week.

Whether or not this is a matter of budget restraints, lack of subject matter knowledge, or incompetency is not for us to judge.

But we do believe the vendor was correct in his assertions. And, ultimately, the quality/process improvement training programs proved ineffective.

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