Aberdeen Group

A study on the use of social media by Aberdeen found that top 20% of users of Web 2.0 tools in talent management experienced:

• 34% improvement in time-to-productivity among its people
• 31% improvement in employee retention/turnover
• 78% of employees indicate they were highly-engaged with the company (compared to 16% for “laggards”).

McKinsey

McKinsey recently correlated the relative value companies believed they were getting from various social media technologies. The study surveyed 1,000 participants. Included in the study results are answers to three key questions:

1. What Web 2.0 tools are companies mostly using?

2. What tools had the highest reported levels of tangible benefits (and the highest ratio of benefit to no benefit)?


3. What are the benefits?

   

   Companies that reported tangible benefits saw the following median improvements:

   • Increasing speed to knowledge – 30% improvement
   • Reducing communications costs – 20% improvement
   • Increasing speed of access to internal experts – 35% improvement
   • Decreasing travel costs – 20% improvement
   • Increasing number of successful innovations for new products or services – 20% improvement
   • Reducing time to market for products or services – 20% improvement
   • Increasing revenue – 15% improvement

Boudreaux Group

A survey by the Bordeaux Group found that most companies are still focusing on risks when thinking about social media. They looked at social media policies at 48 different companies and government agencies and found that only one-third were looking at social media as a positive opportunity with upside potential for employees and their organization. The survey further noted that few organizations are providing guidance to employees regarding specific social media practices and utilities.

Conclusion

These findings suggest a couple of things advocates should consider to further advance the cause in their enterprise:

1. The days of thinking about social media as frivolous are over. There’s little doubt that these tools are providing real business value.
2. Help IT and other stakeholders see the upside productivity and human capital benefits and not get lost in the weeds of excessive risk assessment. Many of these perceived risks are behavioral issues more than technical issues and this is where added training and additional policy and best practice guidelines can help.

These findings can also help you build a quantifiable business case to support your efforts above. Go for it!

If you’ve spent any time involved in efforts to select and deploy enterprise technology, it will not come as news to you that technology implementation is hard.  A host of research studies over the years show a surprisingly high percentage of enterprise technology failures¹.

The more strategic the technology, the wider the array of stakeholders impacted and the broader the purpose, the higher the risk and the cost of failure.  This puts HR software near the top of the list when it comes to potential for disaster.  On the other hand, the same factors that cause technology initiatives to be risky also increase the benefit when it’s done right. HR software is also at the top of the list when it comes to the potential for significantly increasing the ability of an organization to succeed at its core mission.

While technical challenges can be daunting, often failures don’t happen because the technology itself doesn’t work.  More often, failures are on the organization side.  Poor planning, unreasonable or fuzzy expectations, misaligned business processes and lack of buy-in from stakeholders are far more likely to bring a project down than technical issues.  As a result, change management has become a critical component in technology projects.  Without the requisite expertise and staff resources to address change management in a serious way, the prospects for success are not good.  However, change management is not enough.  The challenges are bigger than what can be resolved during the implementation of a single project.

Moving from Change Management to Governance

There are literally dozens of distinct formal approaches to change management—over 60 are listed in a recently published book on the subject². These range from “hard” approaches such as Six Sigma with its quantitative emphasis to “soft” approaches such as empowerment that focus on relationships or individual psychology.  Regardless of the specific approach used, most change management methodologies share two attributes.  First, they are built around a “whole system” view that examines the complex ways that a proposed change affects the interrelated systems and groups within an organization.  Second, they encourage meaningful engagement with stakeholders. 

Change management is good as far as it goes.  In theory, it brings people together to build consensus and alignment.  But in practice, change management efforts often come too late in the process and involve trying to sell people on decisions that were made without their input and with which they may not agree.  In essence, it becomes an effort to gain compliance.  And when it does, the risk of failure goes way up.

The larger problem is not managing change, but generating organizational alignment around objectives, strategy, tools and methods.  The approach for addressing this problem is referred to as governance.  Governance builds on the ethos of change management.  Like change management, it looks at whole systems and fosters meaningful engagement with stakeholders.  But where change management focuses on “who” and “how”, governance adds the “what” and the “why”.  And where change management typically revolves around implementation of a single initiative, governance begins earlier, takes an enterprise view, asks more strategic questions, draws connections across disparate projects and processes and looks at all stages of the lifecycle for each project. 

Unlike change management, governance is not a one-time task or event.  It is an ongoing discipline that leads to better decisions, more alignment with enterprise priorities and more buy-in from stakeholders.  Governance is a decision-making process and a philosophy of management, not an implementation activity.  It addresses question such as

• What are we trying to achieve?
• What is the best strategy to achieve it?
• What are the obvious and non-obvious effects of change on various groups within the organization and on existing people and processes?
• What’s the right balance of centralization or standardization versus local control?
• How do we make this a “win” for the people who will be impacted by this change as well as for the enterprise?
• What could go wrong and how do we make sure it doesn’t?
• How do business processes from each stage of the lifecycle of the project connect and what are the implications of these handoffs?
• How will we manage not only implementation, but also ongoing operation and continuous improvement?
• How does this initiative connect to other initiatives across the organization?
• How will we measure success?

While some of these questions might be asked as part of traditional change management, governance distinguishes itself with its focus on alignment with enterprise strategy and by taking a lifecycle view.  Where change management focuses on implementation, governance takes a “cradle to grave” perspective.  Governance works to identify handoffs and connect the dots between business processes that are done by different people at different times.  For instance, the people who manage an online learning library are rarely the people who create the content.  Yet if the content creators don’t follow standards for naming conventions, pre-requisites, revision management and content expiration, effective library management becomes nearly impossible.  By looking at the big picture, governance identifies problems and reduces risk.  And because many of these problems are intertwined with technology choices and implementation decisions, governance leads to more effective technology initiatives.

Designing an Enterprise Governance Model

Governance happens at many levels.  There is project level governance, department or regional governance and enterprise governance.  The larger the governance umbrella, the greater the impact on the organization.  Enterprise governance doesn’t happen overnight.  But keeping an enterprise perspective even when starting out with smaller governance domains pays off in the long run.  The goal is for small governance efforts to expand and eventually connect into an enterprise level governance model. 

One way to push enterprise level governance along is to draft a “straw man” enterprise level governance model.  An enterprise governance model typically consists of governance bodies at different levels of the organization.  These bodies often take the form of councils: decision-making bodies which may delegate topics to committees or centers of excellence to be fleshed out.  Each council has a charter describing its responsibilities, objectives, members and operating procedures.  While councils are primarily composed of leaders from various stakeholder groups, it is a good practice to include worker level representatives from key groups to get the broadest possible perspective.

A governance model can be represented in a diagram that shows the various governance bodies along with their relation to each other and to the various divisions and regions in the enterprise.  Here is a sample diagram for learning governance.

While this diagram is typical of what governance might look like in a large, decentralized enterprise, there is no “one size fits all” when it comes to governance.  Governance will look different in each organization.  In fact, one of the most critical success factors is that the governance model must match the unique culture and objectives of each organization.  Putting a highly-structured, authoritarian governance model in place in an organization with a history of decentralization and local autonomy will do more harm than good.  Organizations do not turn 180 degrees in a single step.  It is better to find the next logical step based on a realistic assessment of where the organization is now.

Governing from the Middle

Looking at a governance diagram such as the one above can give the impression that governance is a top-down phenomenon.  In the real world, that is rarely the case.  Governance initiatives are most often driven by the middle layer of an organization—Directors, Senior Directors and Vice Presidents.  Mid-level leaders are in a unique position with respect to governance.  They are privy to the concerns and objectives of top executives.  But they also have visibility downward into operational and business realities where the work gets done. Obviously, executive-level support is needed for governance initiatives.  However, this support is often obtained by insightful mid-level leaders making the case for governance and pitching the payoff to the organization.

Because governance is frequently driven by the middle level of an organization, it is important that the governance structure have formal process links both upward to executives and downwards to business units and workers.  The upward links ensure alignment with enterprise and executive priorities.  The downward links ensure that changes and initiatives will fly in the real world.  These links might take the form of councils, for instance an enterprise level council and a series of regional or business unit councils.  But there are other ways of creating links.  For example, in the case of downward links, a link might take the form of an account services model where members of the central team are assigned as advocates for their “customers” within the enterprise. 

Key Issues Addressed by Governance

In practice, governance work often revolves around a handful of crucial issues.  One of the most critical is creating the right balance between centralization and local autonomy.  Creating enterprise standards, shared services and aligned business processes can greatly increase organizational efficiency and effectiveness.  But forcing standards where they don’t fit or glossing over genuine local differences can be disastrous.  Since technology is where decisions become operational tools, the issue of local versus enterprise needs, along with decisions about which processes to standardize, often plays out within technology initiatives.  If you are caught implementing an HR system before these issues are thoroughly resolved, no amount of change management will salvage the project. 

Another common area of focus for governance is enterprise level planning and resource allocation.  Local decisions that make complete sense from the perspective of one part of the organization may not roll up into the most effective use of resources for the enterprise as a whole.  Without a consistent cross-silo process for looking at resource allocation, there is bound to be redundancy and wasted resources from an enterprise perspective.  Effective governance helps reclaim those wasted dollars while improving overall organizational performance.

Getting Started with Governance

Experience shows that governance works best when it is approached from the top and the bottom simultaneously.  Since the essence of governance is to increase and institutionalize meaningful interaction among stakeholders, anything that builds bridges across silos—business units, regions or job functions—contributes to better governance.  Formal efforts to create enterprise governance bodies should be combined with grass roots efforts to increase communication within the organization.  Communities of practice, focus groups, social networking and a variety of other techniques that strengthen connections between stakeholders create and reinforce a culture that supports governance.

The similarity in perspectives between governance and change management provide a useful avenue for moving toward governance.  Start by broadening and formalizing existing change management efforts.  For instance, create a project-level governance council around a particular project.  Give participants more say in decision-making.  In the case of technology projects, jointly design business processes, user interface and other key elements.  Reach out to stakeholders who have not been represented in the past.  Take stakeholder concerns seriously and find a way to address them.  If a system will require stakeholders to make changes that may be viewed as painful, find ways to create “wins” for these stakeholders so they have something to gain from the project to compensate.  And perhaps most importantly, frame the participation of stakeholders as an ongoing opportunity to provide direction—a day-to-day philosophy rather than an activity associated with system implementation. 

As governance at the project level begins to make a positive impact, it will naturally create momentum for a more in-depth look at broader governance opportunities.  The same is true if you start your governance effort with a department, business unit or region.  Success breeds success.  If you employ governance best practices, you will improve outcomes.  When these improved outcomes become visible, people in the organization will begin to connect the dots on how they were achieved and enterprise governance, as a concept, will take root. 

Conclusion

Governance does not eliminate the need for change management.  In fact, governance reinforces and expands change management efforts.  Doing change management without a clear strategy and broad consensus on a course of action is typically an effort in futility.  It’s like being responsible for marketing a product that doesn’t work.  No matter how well you do your job, the prospects for success are slim.  With governance, objectives will be clearer, decisions will be better attuned to reality and a broad consensus for action will exist before implementation starts.  That will make change management efforts really pay off.  And it will reduce the risk of you becoming a technology failure statistic. 

But there are question marks as well. The Skillsoft deal offers a good opportunity to stop and reflect on the state of the learning industry and the trends that may impact its future. A good case can be made that these trends will weaken the market for traditional industry offerings such as learning management systems and pre-packaged content while (eventually) rewarding vendors quick to adapt and innovate.

Here are three trends that are reshaping the learning industry for both vendors and customers.

1. The merging of Learning and Talent

As enterprises mature in their talent strategy, the focus moves away from learning content and toward more sophisticated employee development strategies. Content is no longer king. Leading companies are now crafting employee development solutions built around a rich web of approaches that include company-specific competencies, just-in-time training, mentoring, collaboration, knowledge management and sophisticated performance measurement. Traditional learning tools and content do not play well in this new world.

Leading LMS companies such as Saba and Plateau have seen the writing on the wall and are now selling systems that merge learning and talent functions. Unfortunately, these new tools require new organization-side skills and best practices that are frankly just now emerging. Just when enterprises have finally begun to master the complexities of learning management systems, they now face a potentially steeper learning curve for talent management systems. In the short term, the lack of methodologies and best practices means a tough slog for vendors and customers. But there is little doubt that integration of learning and talent is the future.

The storyline for content vendors like Skillsoft is less certain. The next step up for many organizations as they merge learning and talent is a move from generic content to content that is tailored to the organization. The move toward organization-specific competencies is a challenge for content providers. The value of Skillsoft’s library of aging courses may diminish quickly in this new environment. To thrive, Skillsoft will need to adapt. A move toward industry-specific content might buy some time, but means a smaller audience for each course built. Nor does it solve the underlying issue, which is less demand for courseware in general and an increasing preference for company-specific content that ties into competencies, performance management and other unique elements of each company’s talent strategy.

2. The advent of rapid e-learning development tools

The content industry arose in an era where developing e-learning content was a daunting task. Even a few years ago, the common development metric for e-learning content was that it took at least three to four times as long as the equivalent classroom-based course. Combine this with the specialized tools and skill sets required, and farming out e-learning development or purchasing pre-built libraries was a no-brainer.

With the advent of tools such as Articulate, it is now trivial for an instructional designer with basic PowerPoint knowledge to produce a Flash-based e-learning module complete with simple animation synchronized to narration. Obviously, subject matter expertise and design proficiency are still an issue. But combined with the move toward customized content, the new generation of tools has fundamentally changed the economics of the build-versus-buy decision.

It doesn’t help that many commercially available e-learning courses are not particularly sophisticated from an instructional design perspective. Many are based on standard templates that are not particularly attractive. The learner interaction is often superficial and unrelated to learning goals. Assessment is weak and revolves around recall level knowledge. Usability is inconsistent at best and frequently poor. In short, off-the-shelf content providers (and some custom developers) have created a relatively low bar for in-house content developers to clear.

We see a three pronged content strategy taking hold at many organizations:

1. An increase in in-house production of content for the growing set of topics where customization is desirable.
2. The use of multi-pronged, non-course-based learning approaches for critical topics and skill sets.
3. The continued purchasing of custom or off-the-shelf content where there is little in-house subject expertise or there is little value to customization.

This strategy makes sense for most organizations. And it’s relatively neutral for system providers. The de-emphasis on courseware is balanced by the increased ease of creating standards-compliant content where it makes sense. But the growth of the first two options comes at the expense of the third. So, the trend for content providers is not good.

3. Informal Learning

The move toward informal learning has been going on for some time and shows no signs of abating. This is an area where content providers have an advantage over learning system providers. Skillsoft’s Books24x7 acquisition is an example of how content providers can adapt to this trend by providing new types of content.

The problem for system providers is that the role of the system is often to track learning for performance assessment or compliance purposes. Almost by definition, informal learning cannot be easily tracked, nor in most cases is there any reason to do so. It is worthwhile to ask what the role of a learning management system is in a world where most learning happens informally. I have yet to hear a truly compelling answer to that question except to point out (rightfully) that there are many places where formal learning is still the best answer. The need for formal learning is not going away. But the mix is changing toward informal learning and performance support, which is not great news for system vendors, most of whom still rely heavily on the learning side of the business as they try to gain a foothold in talent management.

On the other hand, this shift does create an opportunity space for up and coming vendors and even nimble providers of traditional learning tools to offer innovative systems for informal learning. As with the shift toward merging learning and talent, the big barrier at this point isn’t the existence of tools. It’s that some of the most promising techniques, which are built around social networking and communities of practice, are hard to pull off in the real world. Building communities requires new skill sets, new processes, new policies and often culture change within the organization. Until strong best practices emerge in the industry, success with these tools will continue to be hit and miss and the growth of tool vendors who play in this arena will be painfully slow.

Conclusion

From a market demand perspective, it makes sense to see the learning industry as a late stage market where old revenue streams are starting to look long in the tooth. In Skillsoft’s case, it’s not clear if the new investors are really reading the tea leaves correctly and planning for major market shifts or if they are betting that an eventual economic rebound combined with traditional belt tightening and management tweaking will allow them to ride the old wave a while for a decent profit. In the end, we don’t expect tinkering to be enough. While LMS vendors have an obvious play in moving into the talent arena, the roadmap for content vendors is less certain. To thrive, Skillsoft and other content vendors need a new game plan that takes into account current trends.

The three trends outlined here create opportunities for industry players, old and new, to create new offerings and new revenue streams. The good news is that the winding down of one market leads to the emergence of another. The bad news is that technology evolves more quickly than organizations do.

Lost in the discussion about industry maturity is the issue of organizational maturity. Surveys like the one we published in CLO Magazine last year (found here) show that enterprises are still struggling with basic enterprise learning governance. This means that progress toward adopting new kinds of tools is bound to be slow and erratic. Even vendors that adapt quickly to the new landscape will face the challenges of any emerging market—immature technology, initial customer failures and slow growth. Success will require foresight, innovation and patience.

More importantly, vendors need to become adept helping their customers overcome organizational challenges as well as technical ones. While the near vacuum around governance, business process development and technology adoption is a short-term boon to consulting firms such as ours that specialize in these areas, the industry as a whole needs to focus on these topics to ease the transition to the next generation of learning and talent.

On the customer side, the emergence of powerful new approaches to learning and talent along with the advent of new tools provides a great opportunity. Forward thinking enterprises that embrace industry trends have a unique opportunity to distance themselves from the pack. While there will undoubtedly be some bumps along the road, the reward for organizations that master new approaches is huge. Already we are beginning to see success stories that promise to fundamentally alter the way organizations think about learning and talent.