We announced major news in the $135 billion worldwide corporate training industry this week: after four years of budget cuts, spending increased on corporate L&D increased by 9.5% last year. This is a major uptick shift in corporate HR spending. Companies now realize that they simply cannot find the skills they need in the workforce and have to reinvest heavily in corporate training.
But how and where should this money go? Should companies go back to the 1980s and build a corporate university again?
The answer is no. Today the world of corporate training has been revolutionized, and in this article I will highlight the five keys to success in building a learning organization.
1. Remember that corporate learning is "informal" and HR doesn't own it.
If you ask any business leader "how people learn," their most common answer is "on the job." And this is correct - sales people learn by making sales calls, engineers learn by doing design, customer service people learn by solving problems. The key to success then is not to provide a lot of formal training, but rather create an environment that supports rapid on-the-job learning.
Our research shows that companies which adopt "formalized informal learning" programs (like coaching, on-demand training, and performance support tools) outperform those that focus on formal training by 3 to 1. In these companies the corporate training team doesn't just train people, it puts in place content and programs to help employees quickly learn on the job. This means developing training in small, easy-to-use chunks of content and making it easy to find as needed.
2. Promote and reward expertise.
Today's workforce is more specialized than ever. Your most talented people in sales, manufacturing, engineering, and design are not in management - they are doing their jobs. High-impact learning organizations unleash these experts and put in place programs to promote and reward even greater levels of expertise.
You should also reward such expertise. Give engineers career progression in their discipline; give people time to study and improve their own skills; publicize and promote the success of experts. Such programs tell the organization that "expertise matters" and "we are willing to invest in your own skills."
The Federal Reserve Bank of Cleveland gives its bank examiners a 7-year apprenticeship program to help them develop into senior bank examiners. During this period of time they are continuously trained through apprenticeship and presenting the results of their work to more senior practitioners.
3. Unleash the power of experts.
Since you know these experts are there, let them share information and make them available to others. Do you have an internal directory of experts which enables them to promote their own skills and experience? Easy to build and something every company should have.
And remember that experts are everywhere, so let people share what they've learned easily.
A great example of such knowledge sharing is the Cheesecake Factory's video learning portal. The head of corporate training for this fast-growing food chain put in place a YouTube-like learning portal which lets any employee upload a video of themselves doing their job well. Employees can share "how to make a hamburger" or "how to best clean the floor" and share it in any way they wish. Within only a few weeks of building this system people rapidly started using their cell phones to create instructional videos and share hilarious stories about how they solve problems on the job. The system went viral in a few weeks.
4. Demonstrate the value of formal training.
Formal training has not gone away, and it still plays a huge role in career development and professional networking. If you have lots of formal training available, managers should be incented to promote such opportunities and help people make time to learn. Yes, it might take them away from their jobs for a few days, but ultimately the return is much greater productivity and satisfaction.
As one high-performing healthcare executive put it: "We are paying our managers to develop people for the entire organization. If I find them hoarding talent or preventing people from improving their own skills, they won't be in management any longer."
5. Allow people to make mistakes.
The best organizational learning (and individual learning) occurs right after you make a huge mistake. These are the most important learning opportunities your company has.
Take a lesson from the military, the largest learning organization on the planet (they only do two things: fight and train - and most of the time it's the latter). Whenever a maneuver is completed, there is always an "after-action review." This is a formal process which forces the team to socialize what worked, what didn't, and what processes will be changed to improve the outcome next time.
What happens in your organization when someone fails or makes a mistake? Do you punish the participants? Or do you take the time to diagnose what happened and put formal programs in place to improve? One of the tenets of six-sigma is continuous improvement - and the foundation of continuous improvement is a culture of "learning from mistakes."
There are lots of ways to build a learning organization, and they all get back to management. If you build a culture which gives people time to reflect, develop and share expertise, stay close to customers, and learn from mistakes you will outdistance your competition and thrive in the face of huge market change. Take a lesson from companies like Apple, IBM, and Google: build expertise and promote organizational learning, it will pay off big time.
Josh Bersin , CONTRIBUTORI analyze corporate HR, talent management and leadership.
Opinions expressed by Forbes Contributors are their own. Jan 18 2012