So the WHY is covered. But the HOW….that’s a different story. Although companies’ PD needs have increased, most seem to be pursuing the same traditional methods – and many are getting less bang for their bucks.
According to a recent survey by McKinsey and Co., a global management consulting firm, companies are struggling with the best way to build capabilities. (Institutional capabilities are all skills, processes, tools and systems that an organization uses as a whole to drive meaningful business results. Individual capabilities refer to training, learning or specific skills.)
In the study, companies cited customer demand and strategic importance as the top reasons for building capabilities. McKinsey and Co. says executives most often identify skills in strategy, operations and marketing and sales as most important for business performance, focusing efforts mostly on frontline employees.
Despite recent technological advances and the advent of e-learning, on-the-job training is still the No. 1 vehicle companies use to better their workforces. And while experts have proven that informal or formal coaching is an effective PD tool, only 33 percent of respondents engage in mentorship. And even fewer companies use methods such as experiential learning or digital (mobile exercises or group-based online learning).
“These leading-edge training methods could enable all organizations to replicate or scale up their learning programs quickly and cost-effectively across multiple locations,” the authors wrote. “But currently, companies tend to plan and execute large-scale learning programs with a train-the-trainer approach or with help from external providers to roll out their programs.”
At the same time, executives reported struggling with how to measure the ROI of capabilities building. At least according to the McKinsey and Co. report, companies lack a clear vision for how to link capability building to the overall business. They also indicate a lack of resources for developing programs and implementing efforts. More than half the survey respondents said they’re not sure if their capability-building programs have met their targets – or whether such targets exist.
And so….what does this all mean?
McKinsey and Co. offers some tips:
- Diagnose systematically. Companies are best able to build strong capabilities when they systematically identify the capabilities, both institutional and individual, that can have the most positive impact on the business. Objective assessments are an important tool in this process — and few respondents say their companies use such assessments now. These diagnostics not only help companies assess their skill gaps relative to industry peers but also help them quantify the potential financial impact of addressing capability gaps.
- Design and deliver learning to address individual needs. The core principles of adult learning require that companies tailor their learning programs to employees’ specific strengths and needs, rather than developing a one-size-fits-all program for everyone. The most effective approach to adult learning is blended — that is, complementing in-class learning with real work situations and other interventions, such as coaching.
- Align with and link to business performance. To be effective and sustainable, capability building can’t happen in a vacuum. Learning objectives must align with strategic business interests, and, ideally, capability building should be a strategic priority in and of itself. Making human resources functions and individual business units co-owners of skill-building responsibilities and then integrating learning results into performance management are effective steps toward achieving this alignment.
What do you think? Have your PD efforts led to better company and/or individual performance?