Peter Casebow in Edinburgh and Jay Cross in Berkeley chat for four minutes on how Internet Time Alliance collaborates and how Good Practice supports management development.

YouTube. 4 minute intro.

How Managers Learn. 8 minutes

Good Practice
Internet Time Alliance

There’s more to come.

MAKING BUSINESS DECISIONS: THE HEART AND THE HEAD

Jay Cross examines decision making on learning at work, and gives the lie to some myths about the use of business metrics.

To “earn a seat at the table” where the business managers sit, you must:

1. Speak the language of business
2. Behave like an officer of the corporation
3. Think like a business person
4. Act like a business person

This applies to any corporation, in both the public and private sectors. It is vital to understand how a business person makes decisions – and in particular the weight they give (or not) to numbers and facts when doing so. It is equally vital to understand that different officers of your corporation will approach decisions about learning in very different ways depending on their circumstances.

Business is about making sound decisions. Every business decision is a trade-off. (If there’s no trade-off, it’s a no-brainer.) An important corollary: There is no free lunch. List the pro’s of doing something and the con’s of doing something else. Be aware of what you’re trading off when making a decision. Every trade-off is a risk. That doesn’t mean you should shy away from risk. Quite the contrary, for no risk means no reward. A decision-maker who disregards risk is a fool, a pauper, or both.

Fortune favors the bold. An astute businessperson seeks the most lucrative balance of risk and reward. Every business decision is made with less than perfect information, and every decision entails taking a risk. Most investment decisions trade off risk and reward.

Every business decision is made with less than perfect information, and every decision entails taking a risk. Most investment decisions trade off risk and reward. The way to make sound decisions is to judge when you have enough information to move ahead and when the level of risk is acceptable. He who hesitates is lost. Saying “We don’t have enough information” is not an acceptable excuse. If the timing is not right, it would be better to say, “The downside is losing $500,000, and we can’t identify the range of probability around that occurring any finer than 25% to 75%.”

When you talk about the bottom line, you damn well better know what it is. I don’t mean to insult your intelligence, so permit me to explain that I didn’t understand the difference between profit and revenue until I took a correspondence course in accounting five years after graduating from college. If you are not fully fluent with terms like revenue, earnings, cost, cash flow, margin, and value, take a look at here and get a friend to explain the workings of the basic business model.

THE ENVIRONMENT OF BUSINESS

Everything is relative, including evidence and “hard numbers.” An executive, a manager, a training director, and a worker each have different but valid ways of evaluating the effectiveness of learning.

People see what they focus on; they don’t see what’s really there. An alcoholic sees the liquor stores other people breeze by. A foodie always remembers whether or not she has eaten at a particular restaurant. A top executive sees long-term trends; a factory labourer sees the clock. (Training directors see learners; everyone else sees workers or employees.)

Let’s walk in the shoes of different people and see what they notice.

Knowledge Workers

The knowledge worker’s objective is to learn what it takes to do the best she can. The learned worker enjoys the fulfillment of a job well done, the rewards that go with high performance, and the accumulation of marketable skills. Today’s workers are out for themselves. Not selfishly but realistically. Free agents. They recognize that their careers will last many times longer than their employer. Our market driven world drives people to increase their personal marketability. Incoming workers are more demanding than previous generations. They have no patience for irrelevant exercises, be they useless curriculum or teaching what they already know. Their watchwords are “Don’t waste my time” and “Less is more.”

A great industrial worker might be half again as productive as his middle-of-the road peer. A great knowledge worker can be several hundred times as productive as his peer. These people need the room to excel. They want their organizations to give them the dots but they want to connect the dots for themselves. Workers want learning that is ‘pull’, i.e. they find and use what they feel they need, instead of ‘push’, i.e. someone else decides the subject matter for them.

The incoming generation of knowledge workers demand opportunities to learn through their work; otherwise, they will pick up and go elsewhere.

Training Directors

In the industrial age, the worker was told she was not paid to think. In the knowledge era, workers are paid to think. And they need to keep current with a buzz of things racing by.Workers expect to learn things in small chunks. Learning has shifted from something outside of work to something embedded in work. Stand-up instruction is giving way to peer learning.

The training director’s objective is to help his sponsors achieve their goals. Sponsors? Usually this is the people with the authority and wherewithal to sign the checks. Training cannot rate itself; it doesn’t own the yardstick.

Business managers set objectives; training directors help achieve them. ‘Proof’ that training is working is when sponsors believe it is.

Pity the training director. There’s more and more to learn. The old training they’re accustomed to doesn’t work well any more. They must interpret business needs into learning opportunities. And even as knowledge workers take responsibility for their own learning, the training director is likely to be held accountable when learners’ performance is underwhelming.

Typical assessment measures – the four or five levels – are at best pieces of a much larger puzzle. “Level Four” will always be out of reach because the instruments of measurement belong to another level in the organization.

The shift from training (we tell you what to learn) to learning (you decide what to learn) increases the scope of the director’s job from classes, workshops, and tests to the broad array of networks, communities, meta-learning, and learning culture.

You live your life as if everything is a miracle or nothing’s a miracle; for the training director, the sky’s the limit or the job is untenable. Today’s training director must gain control by giving control.

Here are some things one might add to any training director’s job description:

• Supporting the informal learning process

• Creating useful, peer-rated FAQs and knowledge bases

• Supplementing self-directed learning with mentors and experts

• Using smart tech to make it easier for workers to collaborate and network

• Encouraging cross-functional gatherings

• Helping workers learn how to improve their learning skills

• Explicitly teaching workers how to learn

• Enlisting learning coaches to encourage reflection

• Calculating life-time value of a learning “customer”

• Explaining the know-who, know-how framework

• Creating a supportive organizational culture

• Setting up a budget for informal learning (There’s no free lunch.)

• Positioning learning as a growth experience

• Conduct a learning culture audit

• Adding learning and teaching goals to job descriptions

• Encouraging learning relationships

• Supporting participation in professional communities of practice

Managers

Getting things done is the role of managers. Meeting this quarter’s numbers is the number one priority. “Long-term” means one year. Great execution merits a great bonus and more rapid promotion. Execution is judged by relative success in meeting planned objectives.

Common measures are gain in market share, increased revenue, customer satisfaction, and other business metrics. The manager does not necessarily care what it takes to hit the numbers. If people could gain new skills by popping smart pills instead of training, pharmaceuticals would push training aside. Sometimes the numbers are even manufactured.

A couple of hundred years ago, the factory system kicked off the industrial revolution. The need for coordinated action led to working hours, the urban workforce, specialization of jobs, the quest for efficiency, and the separation of management and workers. In the west, the educational system adopted German methods of schooling soldiers to convert feisty farmers and hunters into obedient factory workers.

Great ideas have a life cycle. They grow from obscurity among enthusiasts and fanatics to nearly universal acceptance and eventually to decline, as the world passes them by. Business managers cling to ROI and conventional training because they are known entities, not because they are right. These conceptual blinders retard the pace of progress.

We recently toured a corporate headquarters where staying late at work was prized by managers. Time on the job was thought to be correlated with output when the job is tending an assembly line. In knowledge work, overwork leads to stress and a reduction in cognitive acumen. It’s better to have a team that leaves on time to exercise than one that is chained to its desks.

Executive management

Top management is led by what creates value for stakeholders. This generally involves innovation, staying power, adherence to corporate values, and sufficient organizational flexibility to keep ahead of the speed of change. Shareholder confidence along these dimensions fuels market capitalization.When investors judge that the firm can innovate, improve, and grow, the value of its shares increases, as does the take-home pay of the executive.

All learning, informal or formal and anything inbetween, should be evaluated with the same metric: whether people who participate in it are doing the job.

Executives realize that competing successfully in business requires teams of inspired employees – mentally equipped to make sound decisions on the fly; able to execute good ideas in a snap; and proactive when it comes to taking initiatives and bringing innovation.

Being on the front line dealing with customers, these employees don’t have time to run every idea up the management flagpole. Leaders want to field a team that’s in the game and ahead of the crowd. They want to pile on innovation that meshes smoothly with what people already know. They want organizations that make bold moves and respond to change as if by instinct. The overall goal: an environment where people learn faster and better than the competition.

Getting there takes more than a lavish investment in training. Time is frequently more important than money.” “We are moving from a world in which the big eat the small to a world in which the fast eat the slow,” says Klaus Schwab, director of the World Economic Forum.

Let’s look at how senior decisions are really made. The staff has shopped various projects around, gathered the figures, done due diligence on suppliers, run the numbers, assessed the impact of changes in the marketplace, and prepared terse summaries for each scenario. Six business cases for new investments, bound with a clear sheet up front, rest in a pile on the coffee table at the executive vice president’s weekend cabin. (This is going on simultaneously at the CEO’s place by the lake, the COO’s condo, and a few other spots.)

A couple of projects are no-brainers; these are so integral to the organization’s mission, giving a go-ahead is a mere formality.

Projects that enter new territory, eLearning for example, warrant more detailed consideration. If you were to eavesdrop on the executive’s internal thought processes, you’d hear something like this:

[Inner dialog] “Good Heavens, this effort is going to cost us $8 million and change. But our people are our hope for the future. The analysis shows that we’re already spending nearly that much on training. I wonder what Mikey thinks. The ROI is better than building another fab plant but some of the underlying numbers are soft. Of course there’s no guarantee that the fab plant wouldn’t be another white elephant when it comes on stream in three years. The breeze is picking up outside. I bet it rains tonight. Without eLearning, we’ll never become an eBusiness. Some of our systems are pretty creaky right now and would benefit from streamlining.We need to shrink cycle times throughout our organization. This eLearning infrastructure would give Charlie a platform for broadcasting and reinforcing his message about transforming our organization. The Net Discounted Cash Flow is $2 million better than if we took this on ourselves. And the real problem there is that our IT staff would be swamped. And this would wait in line behind the other missioncritical projects they’re working on. Keeping up with eLearning is not a core activity for us; we should outsource as much of it as we can. I wonder what Charlie thinks. The ballgame comes on in about ten minutes. Where do I come out on this one? I’m optimistic about the potential. It feels right. I’ll back it at the Executive Committee Meeting on Monday. I better call the wife to let her know I arrived safely. I could use a slug of single malt about now….”

Don’t believe it? Most senior executives have more faith in gut feel than numbers. The numbers are input. The decision is broader than that.

Five years ago, an Information Week survey revealed that “more companies are justifying their ventures not in terms of ROI but in terms of strategic goals… Creating or maintaining a competitive edge was cited most often as the reason for deploying a business application.”

Decision making at work is as much about what the heart says (based on experience and values) as the head (dictated by the numbers). To give yourself a chance to lead on learning in your organization you need to understand and appeal to both – at all levels.

McKinsey Quarterly is a great online publication. Astute. And partly free.

This month McKinsey reveals the results of a global survey on building organizational capabilities.

Nearly 60 percent of respondents to a recent McKinsey survey¹ say that building organizational capabilities such as lean operations or project or talent management is a top-three priority for their companies. Yet only a third of companies actually focus their training programs on building the capability that adds the most value to their companies’ business performance.

We defined a capability as anything an organization does well that drives meaningful business results.

Further, some three-quarters of respondents don’t think their companies are good at building the capability that is most important.

So far, so good. Now, for the sand in the Vaseline,

Lack of alignment

Despite the importance of capability building on the strategic agenda, executives’ responses indicate they’re not very good at executing: only about a quarter think their companies’ training programs are “extremely” or “very effective” in preparing various employee groups to drive business performance or improve the overall performance of their companies (Exhibit 2).

Calling Bob Mager.* Why do the execs think a flaw in their culture is a training problem? You no more use training for culture change than you’d use Google to learn to swim.

What else goes wrong

Companies also struggle to measure the impact of training on business performance: 50 percent of respondents say their companies keep track of direct feedback, and at best 30 percent use any other kind of metric. In addition, a third of respondents don’t know the return on their companies’ training investment. Because companies don’t know the impact of training, they appear to set their agendas using different measures, including prioritizing by employee role, which may not actually result in the most impact to the bottom line.

This is piffle. If a company wants to know whether its training is effective, it needs to talk with a sample of employees to find out if the learning is showing up on the job. It should check with supervisors to find out if workers are performing better. Besides, business people bet on uncertainty all the time. What’s the value of a CEO brought in from the outside? Which ad dollars drive sales?
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* Mager famously asked, “Could he do it if you held a gun to his head?” If he could, you’ve got a motivation problem, not a training problem.

Teach a man to fish…

PKM: Figuring out what’s important to you, how to find it, how to keep up with it, how to make sense of it, how to recall it when you need it anew, and how to share it with others — this is ground zero for mining the riches of the web. Bookstore shelves overflow with books on blogging, but I’ve yet to see one on PKM.

Harold Jarche has written some great posts about PKM. But for those of you have a tough time seeing the trees for the forest, I decided to clean up my PKM framework and show you what I do rather than talk about it.

My links page is my launch pad. I’ve maintained a page like this for a dozen years. It may be my ADD; I need some semblance of structure. The launch page begins with frequent destinations. The little lobster signals my restaurant page; the plane, my travel numbers and suppliers. (These are screen shots; go to the links page if you want to play with the real thing. You’ll find some pages that are private.)

To the right of the clocks are a Google search of all my sites and an Amazon search box; I use these incessantly.

Mind you, I”m forever tweaking the launch page as my interests (and the web) change. Below the frequent destinations, I keep URLs of online services I tap into. To the right, blogs… although the list is a little flaky. I read a dozen blogs in the mail and many more in Google Reader.

To the right of that section are feeds I like and local organizations & events.

I use the bottom of the page to store frequently used graphics. No more searching all over for a common icon.

That’s the top layer of my Personal Knowledge Management set-up.

If you visit the links page, you’ll see subsidiary pages such as the Research page and my  Delicious tags.

I stash the social connections on my home page:

The home page is also the entry into my articles, groups, books, and so on:

One page I recommend visiting is this page of other people’s work. I plan to expand it soon.

Seminal Documents

How do you organize your PKM?

I set the foundations of my approach before we had tags, billions of choices, and responsive search engines. There’s bound to be an easier way.

The web and social networks are evolving their own conventions of appropriate behavior.

People have learned to avoid cluttering mailboxes with broad cc’s. Flames are far fewer than in the old days. Most bloggers no longer feel they must blog every day. Most people know that it’s worthwhile to lurk when joining a new community to identify its standards before jumping into the fray.

One area that noobs fail to understand is that it is not cool to “scrape” other people’s blogs. By scrape, I mean taking an entire web post rather than taking an excerpt and linking to the original.

Google Alerts emails me when sites take my content lock, stock, and barrel. Every week I come upon sites that break one or more of these taboos:

• Do not re-post someone else’s blog posts in their entirety.
• Do not imply that you wrote a post if you did not.
• Do not strip out author names and links.
• Do not use frames to make it difficult to get to the original post.
• Do not remove links to the original material.

I’ve been happy to share my thoughts in blogs and free articles for more than a decade. I enjoy the exposure. But I don’t enjoy being abused.

One association takes my every post, puts it behind a members-only wall, and puts its copyright notice on the bottom of every page. A now-defunct university posted an entire white paper by Clark Quinn and me but stripped our names from it. Several automated blogs repost my work with ads alongside. My colleagues at Internet Time Alliance are experiencing the same phenomena.

What’s your take on this issue?

Dan Pink’s Drive, The Surprising Truth About What Motivates Us, provides convincing arguments in favor of intrinsic motivation. We have had too limited a view of what drives performance and we need a whole new operating system for some of the places where science says one thing and business does another. The patches are just barely holding the old beliefs in place.

The book’s website puts it this way:

Most of us believe that the best way to motivate ourselves and others is with external rewards like money—the carrot-and-stick approach. That’s a mistake, Daniel H. Pink says in, Drive: The Surprising Truth About What Motivates Us, his provocative and persuasive new book. The secret to high performance and satisfaction—at work, at school, and at home—is the deeply human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world.

Drawing on four decades of scientific research on human motivation, Pink exposes the mismatch between what science knows and what business does—and how that affects every aspect of life. He demonstrates that while carrots and sticks worked successfully in the twentieth century, that’s precisely the wrong way to motivate people for today’s challenges.

Most if-then incentive systems do more damage than good. Give somebody a contingent reward and they lose interest after a short while. That which had once been fun is transmuted into work. Pink gives one example after another of paying a contingent bonus and seeing performance decline.
Setting goals can backfire, too. People who put the goals first often cut corners to accomplish them. Also, goals fight against self-determination.

The new values displace the shareholder value maximization mandate, making its workers/partners part of the larger whole. HBS MBAs are signing a pledge to be principled and weigh the balance of profit and what feels right.

Students today do things just for the hell of it. Money is not as big a motivator as doing the right thing. They live and breathe networks. They aren’t about to stay still because they know how to leverage the powerful of information and timing.

Dan Pink, photo by Jay

Dan has a following; I expect he’ll raise enough of a ruckus that execs will take action. Higher salary and smaller bonus. Or bonus pays your contributions to charity and churches.

People need free reign in making their work what they want to do; that’s what works with intrinsicly motivated workers. The big payoff arrives when companies are doing the sort of greater good that makes a team proud.

Working Smarter, the 2010 Edition, is priced like lobster in an upscale restaurant. The price is whatever we feel like.

Current price of hardcopy = $16   After March 16, $20

Current price of download = $10  After March 16, $16

Enlargement

This post continues the discussion among the members of the Internet Time Alliance about appropriate terminology for learning in the network era. This is an exploration, not an ultimatum.

The main point is getting the job done. That pays the bills. Everything flows from working smarter.

All learning is social, so that’s not really a useful distinction unless we’re stressing social networked learning.

Learning has replaced training as the term of choice. (For more on that issue, see transcript of tonight’s #lrnchat.)

There’s a continuum from top-down, mandated learning (“formal”) to self-directed, intrinsically-motivated learning (“informal”). Unfortunately, “formal” and “informal” are tainted words that invite misinterpretation. Formal can mean stodgy or accepted. Informal can mean casual or flippant.

I prefer calling the bookends of the spectrum of corporate learning….

• Traditional learning — institutional control, paternalism
• Independent learning – demand-driven choice by the learner

Traditional learning is not better than independent learning or vice-versa; context determines utility.

What are your thoughts about this?

Related posts

Understanding learning (Jane Hart)

Social media and self-directed learning (Harold Jarche)

Formalizing informal learning (Clark Quinn)

Interdependent Learning (Harold Jarche)

Informal Snake Oil (moi)

Christian Crumlish has a fantastic job. He maintains Yahoo’s design pattern library. He gets to think about the little things that make the web work that you never have time to think about.

Christian teamed up with Erin Malone to write this incredible book just out from O’Reilly. When my electrician cut my power at 9:30 am and didn’t restore it until 2:30 pm, I used my time off the grid to dig in.

The book draws on the logic, organization, and faith of Christopher Alexander’s A Pattern Language. Check out the book’s wiki to see what I mean.

I’ve been reading and interacting with the web since Sir Tim went online. However, I hadn’t thought of the net as an accumulation of patterns of identity, presence, reputation, collecting, broadcasting, feedback, collaboration, and community. It’s like seeing an aerial photograph of your neighborhood for the first time. I have a better vision of the forest because the book explains a lot about its trees. Take a look at the pattern of Identity or Personal Dashboard to grok what this way of thinking is about.

Designing Social Interfaces

Working Smarter, the 2010 Edition, regularly sells for $19.98 (hardcopy) and $12.00 (download). This week the hardcopy version is marked down to $16, the download to $10.

Here’s an excerpt.

I’m investigating the price-sensitivity of demand. The price will probably go up again next week.