How to Strategically Reposition the Internal Training Organization

In 1954, Peter F. Drucker retold the parable of the three stonecutters. It goes something like this:

Asked what they were doing:

• The first replied, "I am making a living."
• The second replied, "I am doing the best job of stone cutting in the country."
• The third replied, "I am building a cathedral."

After reading this article, we hope many in the training/learning profession view their role as "building a cathedral." This is the first in a series of articles that attempts to set the stage for strategically repositioning the internal training organization (ITO).

Though practical examples rather than theoretical, this article has a core thesis: Corporate economic performance rests on knowledge and its applications. Done correctly, knowledge increases corporate wealth, which, in turn, increases societal wealth.

Human beings apply knowledge. For them to do so requires systematic, well-organized training/learning programs in a variety of forms. The results of learning and knowledge applications must increase productivity and innovation.

Stated differently: New wealth creation is a function of two explanatory variables—productivity improvement and innovation. The beacons of productivity and innovation must become the guideposts for judging, or at least appraising, the effectiveness of training/learning activities.

Training Myopia: What Business Are We Really In?

Back in the ‘60s, the article "Marketing Myopia" published in the Harvard Business Review by Theodore Levitt, then-distinguished professor of marketing at the Harvard Graduate School of Business, made a tremendous impact on senior level executives.

Levitt said most company management teams were looking at their businesses with tunnel vision, what he termed myopia.

He implored people in the airline business or railroad business to broaden their perspectives to realize that they were actually in the transportation business.

Their customers wanted to be moved from one location to another by some affordable, efficient means of transportation, and they didn't really care whether the vehicle was a plane, train, bus or car.

Levitt implicitly stated that before an organization broadens its vision, it must be sure it has the core competencies or specific knowledges required for success.

Product-Oriented Versus Market-Oriented Definitions

Management should avoid a market definition that is too narrow or broad. Marketing guru Philip Kotler provided the following illustration in an early edition of his classic textbook Marketing Management:

"Consider a lead-pencil manufacturer…If it sees itself as a writing instruments company, it might expand into the production of pens…

… If it sees itself as a writing-equipment company, it might consider making word processors…The broadest concept of its business is that of a communications company, but this would be stretching things too far..."

Because of Levitt's article, many organizations looked beyond their specific products and/or services and attempted to define the specific value they were providing to their customers.

As a result, organizations selling, say, maintenance services decided they were in the corrosion control business; oil companies redefined themselves as natural energy companies; watch/clock manufacturers redefined themselves as being in the time business (this opened up their horizons to oven clocks, vault timers and the like).

Encyclopedia Britannica redefined itself as being in the information distribution business; Carrier changed from defining its business as making air conditioners and furnaces to providing climate control in the home; Missouri-Pacific Railroad reinvented itself by defining the company as "a people-and-goods mover."

How Does This Apply to Internal Training Organizations?

For starters, those of us involved with the internal training function would be better served if we stopped thinking we're in the training/learning business and started realizing we are in the business of creating corporate wealth, instead.

Properly viewed, the internal training organization is charged with the awesome responsibility of preparing/enabling employees to achieve greater productivity and innovation, that is, greater corporate wealth.

This kind of thinking will elevate your expectations, get you to ask the right questions about the current and future role of training/learning in your organization, and, above all, liberate you to create and grow opportunities for your training/learning activities.

Admittedly, this may be a foreign thought process to many readers. But it will soon click. Keep reading. Your "aha" moment will arrive. So, let's get started.

How Training (an American Invention) Created the Foundation of Societal Wealth

In the book Wealth of Nations (1776), Adam Smith discussed how it took centuries for a country to build a core competency. Germany, for example, "because of grueling winters coupled with lots of snow, learned to be woodworkers and make clocks and violins. It took almost 200 years for them to do so." Smith called this "the tradition of labor."

"America, in its early beginnings," noted Drucker, "bribed English craftsmen and supplied them with false papers to come to America and teach us how to build textile machinery and dye cotton….New England became an industrial power around 1810."

Translated, America founders put NIH (Not Invented Here) behind them–and learned to copy with unique adaptation/enhancement from the best. Americans aggressively sought out the knowledge of experts in foreign countries and practiced what might be called today creative swiping or innovative imitation.

In short, swiping from the best with pride telescoped the 200 years involved in Adam Smith's tradition of labor to a decade or so. America, because of its initial practice of creative swiping quickly built a thriving economy and was enabled to turn out high-quality products by importing needed expertise.

Apprenticeship

The next big workforce productivity breakthrough was apprenticeship. First introduced in Germany, apprenticeship led to the formation of specialty skill craft guilds. These guilds were credited with speeding up the skill acquisition learning process.

According to Drucker, "Prior to World War I, unions were craft monopolies; membership in them was restricted to sons or relatives of members. They required apprenticeship of five to seven years, but had no systematic training or work study...

...Nothing was ever allowed to be written down; there were not even blueprints or other drawings of the work to be done…The members were sworn to secrecy and were not permitted to discuss their work with non-members."

The 200 years required to build a nation's skills, observed by Adam Smith, was reduced or compressed into five to seven years because of the exposure to the experience of master craftsmen, that is, apprenticeship learning. That was considered real progress. And it was.

Moving from Apprenticeship Learning to Training

Next, came the invention of TRAINING. It was the greatest workforce productivity revolution of all time.

Training was, in reality, the invention of Frederick Winslow Taylor (1856 –1915). Taylor was the first to study, and reengineer (i.e. redesign) work so that the worker could become more productive—enabling workers to work smarter not harder.

Taylor studied, analyzed and divided work into a series of systematic, well-organized steps each of which had to be done in one right way, its own best time and with its own right set of tools.

This led directly to the invention of training. Why? Because Taylor's approach converted the work to be done into a methodology that could be quickly and easily learned.

Take, for example, Taylor's first project which has become his most famous study. He analyzed a laborer shoveling sand. He figured out which steps to eliminate and how to do the job with the least physical strain on the operator.

Further, he found the traditional shovel was the wrong size, wrong shape and it had the wrong handle. He then proceeded to redesign the shovel for maximum output with minimum effort.

As a consequence, the laborer's productivity (output/hours worked) nearly tripled. The job became easier and enabled the laborer to be paid a much higher wage.

Taylor was probably America's, if not the world's, first industrial engineer and first instructional course designer. Taylor made manual work capable of being taught, learned and practiced.

In short, he enabled a "craft skill" (i.e. ad hoc experience, anecdote and the like) to be converted into a step-by-step methodology or systematic learning program.

The result of Taylor's work? Five or seven years of apprenticeship was reduced to weeks or months of systematic, well-organized learning, that is, training. Now, people could acquire both elementary and advanced skills fast and successfully via training rather than apprenticeship.

Training makes many kinds of apprenticeship obsolete. Training substitutes systematic learning for exposure to experience. Training enables people to put knowledge, skills and tools to work in a very short period of time. Training enables us to acquire in less time and with the less effort what took years of apprenticeship to learn.

Bottom Line: Training telescoped five or more years of apprenticeship learning into six months or even 90 days.

Historians Believe Taylor's Contribution to Training Helped Win World War II

Taylor's greatest impact all told was probably in training. Many believe Taylor's approach to training explains, more than any other factor, why the United States was able to defeat both Germany and Japan in World War II.

The United States Armed Forces during World War II applied Taylor's methodology to train thousands of recruits and draftees to serve as navigators, electricians, pilots, cooks, welders, riveters, quality inspectors, paramedics, masons and hundreds of other skilled positions.

To get these young men and women up to speed, trainers compressed years of experience into months (sometimes weeks) of organized and systematic learning. Formal course work replaced apprenticeship. The Armed Forces used systems and programs as the foundation for a great variety of skills–clerical, supervisory, engineering and medical.

It was commonly believed before World War II that years of mentoring, coaching and practicing were necessary to attain first-class skills in the manual crafts. During the war however, average people without great native talent or intelligence became highly skilled craftsman after 60 to 90 days of training...and enjoyed the learning experience.

Taylor's Training: Foundation of Post-World War II Economic Growth

Taylor-based training, observed Drucker, endowed a relatively low-wage workforce with world-class productivity in practically no time:

"All the earlier economic powers in modern history–Great Britain, the United States, Germany–emerged through leadership in new technology…The post-World War II economic powers–first Japan, then South Korea, Taiwan, Hong Kong, Singapore–all owe their rise to Taylor's training..."

In his excellent book, The New Convergence, Nobel Peace Prize winner Michael Spence shows how workforce productivity exponentially increased (because of training and retraining) in all advanced countries (and now in developing nations)... and why those productivity increases correlate with a huge expansion in both the standard of living and quality of life.

Said Drucker: "Consider that (55) years ago, there wasn't a person in South Korea who had any tradition of skill or craft if only because Japan didn't allow its neighbors to acquire any… Today, Korea can do almost anything any advanced industrial nation does, thanks to training..."

Knowledge is the Source of New Corporate Wealth

Karl Marx was thought by many to be brilliant. He was. For starters, he had an uncanny knack for asking the right questions. Unfortunately, he was not so good at getting the right answers.

What creates wealth? Marx's answer was the worker. He called his answer the labor theory of value. He was close but no cigar. He missed the underlying contributor to enabling human beings (i.e. the worker) to create wealth.

What is that enabler? It's KNOWLEDGE. The real source of wealth is KNOWLEDGE.

Drucker's Insights About Knowledge

"Knowledge is a specifically human resource. It's not found in books (and can't be obtained through spell-binding lectures). Books (and lectures) contain information; whereas knowledge is the ability to apply information to specific work and performance. And that only comes with a human being, his brain or the skill of his hands."

"We now know that the source of wealth is something specifically human: knowledge…If we apply knowledge to tasks we already know how to do, we call it ‘productivity’…If we apply knowledge to tasks that are new and different, we call it ‘innovation.’"

The beacons of productivity and innovation must be our guides in judging whether or not wealth creation is occurring.

If an organization, by whatever means, continues to improve productivity of all key resources and innovative standing, it's going to be profitable. This, we assert, should be the primary focus of all training/learning activities.

Labor, most notably the knowledge worker, has to be equipped with the right knowledge(s) to achieve productivity improvement and innovation. That's what creates wealth for the organization which, in turn, creates societal wealth.

Productivity Improvement: Applying Knowledge to Tasks We Are Already Doing

The American economy is expected to grow at the abysmally low rate of 2 percent per year over the next decade or so. Translated, this means we can expect a slow/low growth economy that will force organizations to re-strategize and cut costs.

ITOs will have to formulate new programs and activities to equip professional, managerial, technical and administrative workers with the skills required to effectively carry out tasks required by new corporate agendas.

Structured Learning Programs Boosts Workforce Productivity

What's the purpose of providing employees with a structured learning program on, say, new concepts in production planning scheduling and control? Or structured learning programs on maintenance management, sales management, facilities management, call center management, warehousing management, manufacturing management, shop floor control, digital marketing and the like?

Think about it for a moment. The purpose is greater productivity—getting more output (or better outcomes) with the same amount of resources or the same output with less resources. It’s really not much different from Taylor's redesign of the task of shoveling.

By enabling employees to learn how to put into practice new techniques, technologies and methodologies should result in increased productivity. That's what most learning and knowledge applications are all about.

This means information presented in all forms has to be put into actual practice to be useful. It has to result in increased productivity. So, applying knowledge to tasks we already know how to do, increases productivity. Remember that! It will serve you well when talking to your CEO and/or CFO.

People have to be trained, and re-trained in many instances, to correctly apply the information to obtain the desired results. Ultimately, if successful, corporate wealth increases because resource productivity increases.

Productivity in Knowledge Work and Service Work Demands We Build Continuous Learning into the Job and Into the Organization

Many global ITOs are spreading best internal practices through the use of organized continuous learning activities. They bring together various groups–market researchers, chemical engineers, digital marketers, maintenance managers, warehouse supervisors for social media get-togethers.

Many companies have star plants, which are held up as examples to other plants located around the world. Knowledge gained in one part of the world can be used to gain advantage in another. By comparing the performance of different divisions via the use of measurement, the worst performers learn what the best are doing to get superior results.

There is a need for workers, whether unskilled, skilled or knowledge workers, to share with others what they have learned to improve their performance.

Continuous learning, as opposed to structured learning, must ask knowledge workers the following question on a continuous basis: "What have you learned that can make your job and the job of all of us (doing a similar thing) more productive, better performing, and better achieving?"

We believe ITOs must organize these social media get-togethers. Sharing best internal practices increases both individual and organizational productivity. And this leads directly to wealth creation via productivity improvement.

The Discipline of Innovation–It's Capable of Being Taught, Learned and Practiced

An established company in an age demanding innovation–but not capable of innovation–is doomed to decline and extinction. And management in today's low/slow growth economy that does not know how to stimulate, direct and make effective innovation is incompetent to its task.

Innovation is not improvement. Improvement aims at making the already successful better still. It's a never-ending activity that requires specific quantitative goals, such as annual improvements of three to five percent in cost, quality and customer satisfaction.

Improvement starts with feedback from the frontline: people who actually make the product and will deliver the service, salespeople, and, of course, the end-users.

After feedback information is collected and analyzed, the company's scientists, engineers or product designers must convert the front line's suggestions and queries into changes in product, process or service. But, again, improvement is not innovation.

Innovation is sometimes confused with managed evolution. Managed evolution, observed Drucker, is the use of a new product, process or service to spawn an even newer product, process or service.

A Quick Example of Managed Evolution

Interestingly, many years ago, Drucker was a consultant for ServiceMaster (a multi-billion-dollar corporation) and helped them define "What is our business?"

He (and members of the management group) determined they had great strength in applying Taylor-based training methods and, as a consequence, could quickly and easily prepare low-skilled people to do a very specific type work.

Essentially ServiceMaster is a low-tech organization that specializes in providing supporting functions–such as termite and pest control, landscape maintenance, office maintenance and home care for the elderly.

Elizabeth Edersheim in The Definitive Drucker said: "The core of the company's business is to offer professional management of the jobs that most of its clients consider menial and a nuisance to oversee… The real secret to the company's success, however, is its unique ability to develop sometimes illiterate hires into highly productive, motivated and quality-conscious service workers."

Drucker believed that ServiceMaster was the perfect example of an organization that grew–and continues to grow– through managed evolution. Specifically he said:

"ServiceMaster started with the systematic application of industrial engineering to hospital maintenance and the training of low-skill people…It then evolved this, step-by-step, into office maintenance and the care of elderly shut-ins…Managed evolution is always market driven; it often requires, however, new, or at least newly developed, technology and tools."

What is Innovation?

Innovation is the specific function of entrepreneurship, whether in an existing business, a public-service institution or a new venture started by two friends in a garage.

Innovation is doing truly and different things. Innovation is much more than spinoffs from science and engineering. It is creating new value.

The measure of innovation is the impact on the environment. The iPod, iPhone and iPad are examples of real innovation with tremendous societal impact.

Can Innovation Be Taught?

Drucker and others provided the equivalent of a structured learning program that enables managers to easily and quickly acquire what had, since the beginning of time, been accessible only to the near-genius. What formally required trial-and-error learning now requires formalized study, hard work, and, in some cases, imagination.

In short, internal entrepreneurship can be learned. It's an acquired skill. (We will discuss this in future articles). For example, fast-track managers can be taught what kind of innovation is likely to become a major product or process, a major new business, a major market.

Managers can be taught how to identify areas where innovation is needed; managers can be taught how to develop the right organizational structures to nurture innovation.

Managers can be taught how to budget for innovation as opposed to budgeting for the ongoing organization; managers can be taught how to formulate and implement the appropriate entrepreneurial strategies and venture management systems, and much more.

Implications for ITOs

Innovation is not a "Eureka moment." Thanks to the work of Drucker and many others, fast-track managers can be "trained" to produce and manage innovation. Once again, training can be used to create new wealth via structured learning programs and organized continuous learning activities dedicated to the subject of innovation.

In this period of extreme slow economic growth, innovation will be required to thrive and survive. Producing and managing innovation is an essential and acquirable skill for management.

Yes, managing innovation is an acquirable management skill. Repeat that to yourself five times. Innovation can be taught, learned and practiced.

In the final analysis, ITOs that convert this truism into operating reality will help create new corporate wealth for their organization.

Summary and Conclusions

There are two components to creating corporate wealth–productivity improvement and innovation. The right kind of training can significantly increase workforce productivity and create wealth-producing innovation.