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Wednesday, July 08, 2009

Future of the Business of Learning

As part of preparing for the July 23 free online session on the Future of the Business of Learning, I've had a bunch of conversations with CLOs/VP Learning, CEOs of Training Companies, Marketing and Sales Consultants to Training Companies, Industry Analysts, Software and Services Vendors.

I am really looking forward to July 23 when we come together to discuss this. It's going to be interesting. There are some real nuggets that I'm finding that you will hear about. I would highly encourage you to join in and book the day. If nothing else, seeing the Intuit case study to think through and discuss outsourcing to your customers and rethinking return on training investment.

Register Here

There's a bit more detail on the particular sessions via the link above. I will announce the panelists in a day or two.

I felt compelled to capture a few thoughts as I've been having these conversations:

Tough Times - No One Jumping

Statistics are made real when you run into actual examples. For example, 10% unemployment doesn't always translate. Having friends or family lose their job hits home.

When you talk to someone who's training business is off 20-30%, it hits home. Imagine your paycheck getting cut 25%. Actually, if you are a smaller training company, it's worse than that. You likely are now scraping by with virtually zero paycheck. And possibly incurring debt.

At the same time, while we all know this is tough times from training, no one I've talked to is on the ledge ready to jump. Instead, I think that everyone recognizes that there's always going to be need for skill development. And overall, learning is more important than ever.

Mature or Declining Industry?

When I first introduced this topic, I probably should not have used an analogy between publishing and training. No one knows for sure what the total spend on training (using formal learning methods) will be in the future. Will it overall go up a lot? Down a lot? Stay relatively the same? Training is definitely in much better position than publishers who relied on advertising dollars.

I personally believe that the overall market for training using formal learning models is going to be on a long, slow downward trend. We are currently experiencing a big drop (similar to the drop in 2001). Training never quite recovered from the 2001 drop. And likely after this drop, we won't quite recover again.

My guess is that even the most optimistic person sees a relatively modest growth percentage and pessimists probably line up with me.

But what I find is that anytime I say that Training (using Formal Learning Models) might be transitioning into a relatively flat or declining industry – people hear - "Training is Dead." (see Long Live? for an example).

So, please help:

How can I effectively explain that training might be a mature or declining industry and still keep folks listening?

One thing I have tried to do is use an analogy. On a phone call the other day, I used the unfortunately analogy of the railroads. At one point railroads were in hyper growth mode, then they matured and consolidated. Then they were supplanted by cars, trucking and airlines as other forms of transportation. I don't think that any of the railroads managed to really transition themselves into other forms of transportation. It's a classic example of the innovator's dilemma (see The Innovator's Dilemma of Learning). Of course there are still railroads.

This did not go over well. Partly it was that there was a funny moment when I realized how tough things were for the auto and airlines. But also, no one wants to see themselves as the railroads.

Differentiation and Innovation Opportunities

No matter your take on the overall training spend, there's clearly lots of differentiation and innovation opportunities. A lot of what I've been hearing is about successful differentiation in the marketplace. Training companies and internal training organizations who focus on things that matter to organizations or who have offerings that are more than content seem to be having a better time of it.

There's also some incredible innovation going on as well. The Intuit example that will be presented and the implications of it for internal and external training organizations is going to be worth the entire time investment.

Tough Questions – Tougher Answers

I hope you won't come on July 23 expecting easy answers. The core question that I asked:

While training as a publisher of courses and courseware faces an increasingly challenging market, what other things can learning businesses successfully sell to internal or external customers?

is definitely a tough question. ISA did a session in March looking at a very similar question and it's clear there are no easy answers.

A big part of what makes these questions tough was beautifully captured by Tom McKee, CEO of Ken Blanchard,

You can't sell what people aren't willing to buy.

Many of our internal customers are simply not ready to buy solutions that look like something more than courses and courseware. There are exceptions and definitely opportunities for innovation. But realistically, a lot of what we will be talking about is what organizations should be doing today to be in position for the future.

This is going to be fun, hope you will join the conversation.


Sandy said...

Hi Tony,

I'm not so convinced that it's a maturing or declining industry as much as it is a changing industry trying to define itself within the onslaught of ever-changing, latest and greatest technologies. Almost every day there's something new to muddy the waters.

I think you said it well back in November 2006 (The Big Question for November - Future of ISD/ADDIE/HPT?)

"Much of what we'll be doing in the future is not creating content ahead of learning, but working alongside, real-time of our learning community helping them with content, helping them to become better learners, and looking at the content that is being created and improving it, providing structure or guides."

To me, everything old is new again. It's always been said that most learning (70%) takes place informally in the workplace. What the future holds is a way to finally empower and give structure to informal learning (wikis, blogs, podcasts, etc) in ways we couldn't before now. Just like the cell phone has perhaps replaced the phone booth, technology makes learning more flexible, more networked, but can't possibly disrupt it into extinction.

Tony Karrer said...

Sandy - what a fantastic way to say it - "changing industry" ... "almost every day there's something new to muddy the waters"

I don't think it's only latest and greatest technology. It's a lot more than that. Pace of change. Job fragmentation. Short tenure. Short times to adapt. Means fast learning and acting like an expert without being an expert is required.

John said...

Hi Tony,

Perhaps the analogy you are looking for isn't the railroads, but the automobile industry.

In the past, we were content to build and buy vehicles of all shapes and sizes, but they were all based on the same underlying design - combustion engines. Over time the efficiency of the engines improved, quality of the vehicles improved, and all sorts of new gadgets were added (GPS, MP3 players, etc.), but still a combustion engine (aka the classroom, thinking success = volume of training?).

Then along came hybrid and electric vehicles. Market conditions (oil prices, consumer demand, etc.) changed. Those companies that recognized it early are now in a position to capitalize. Those that didn't are hoping they can avoid extinction.

This wasn't without it's challenges. Not every new hybrid manufacturer will make it (same with some eLearning vendors, tools, web 2.0 products). But those who get it will succeed, and will ultimately lead their markets.

Mark Oehlert, in recent seminar, had a slide that spoke to incremental vs. revolutionary improvements (borrowed from Kathy Sierra, he said). The point was that incremental improvements can only get you so far. At some point you hit a big frickin' wall, and you need something revolutionary to get over it.

It appears that the 'traditional' take on Training & Development is about to hit that wall. If we don't transform into something new, something that our consumers are asking for, we are unlikely to be in business much longer. As you've stated, this doesn't mean what we do today instantly goes away, but we must start thinking differently.

Sandy said...

Great discussion, Tony, and especially important to instructional designers like myself who feel the pressure to change hats day-to-day or become irrelevant. The dilemma I see time and again is that organizations say they understand that the real value of training is to solve business problems, but few actually practice it in my experience. When training depts focus on linking training to business goals, they'll have a better chance of becoming a profit center and not an expense to be cut.

Gary Wise said...

I have to agree with Sandy the industry is changing, but am not sure if it is technology that's changing it or it is the velocity of learning moments confronting our workers. We could certainly argue the chicken/egg thing on this one. With tough times upon us, no one wants to back off of a productive task to take time-out for training. The velocity of business is demanding more with less...and who can take time off-task for formal training? I'm seeing that mindset more and more - I.E...if it ain't compliance-related...or the new Medical Records system going live - it's optional!

We cannot stop training our workers, but we can shift where it happens and when it happens. And that's not the classroom or on-line learning. And that’s not the traditional training paradigm either. Maybe what's happening in this industry is a re-invention that embraces the shift from traditional formal learning to informal.

Hmmm, wonder if my LMS will morph into a LMSLCMSEPSS? ...with single sign-on...of course.

Amit Garg said...

John makes a great point.

I agree automobile industry is a better analogy for the changing training industry.
With new technology informal learning is set to become really big. In future the focus would actually shift to how to 'create' opportunities for informal learning and may be even 'manage' it to increase its effectiveness.

Only thing I am not sure of is if the pace of change is equally frantic everywhere - in all geographies or all industries. I doubt it is. While learning 2.0 gradually takes over, we would continue to see traditional training in decreasingly smaller pockets for a long time - as we would see combustion engines.