The Trillion Dollar Training Problem

8/3/2019 The Trillion Dollar Training Problem

http://slidepdf.com/reader/full/the-trillion-dollar-training-problem 1/7



www.LTSGlobal.com

1-888- 877-9531

Elwood F. "Ed" Holton III, is CEO of Learning Transfer Solutions

Global LLC and Jones S. Davis Distinguished Professor of Human

Resource, Leadership and Organization Development at Louisiana

State University, USA. Dr. Holton has led efforts to create theLearning Transfer System Inventory and the Training Transfer

Solution system over the last 15 years. With over 200 articles and

17 books, he is widely considered to be an international expert on

human resource development and particularly learning transfer.

Contact him at [email protected]

“Dr. Ed Holton is one of the premier experts in learning transfer. Great to work with and extremely

professional.” November 29, 2010 Robin Kistler,

Director, LSU Executive Education, LSU - Stephenson Entrepreneurship Institute

“Ed Holton is one of, if not the, foremost experts in the area of transfer of training and perhaps HRD ingeneral. He has rather ingeniously used the fruits of his career-long research and experience andshaped it into the tools that companies can and should benefit from. Having personally worked withEd on research projects in this area I can definitively say that his solutions are meticulouslydeveloped and designed and boast rigorous theoretical framework (not something you encounterfrequently in HRD consulting). At the same time Ed’s tools and methods are designed for the real -world, demonstrating his exceptional ability to connect research and practice. Last but not least, he isa pleasure to work with, approachable, and down-to-earth and I have always walked away from aconversation with him feeling like I’ve learned something new.” November 21, 2010

Bogdan Yamkovenko, PhD

Organizational Development and Research Coordinator, The Shaw Group

“I regard Ed Holton as among the leading experts in the world on the subject of transfer of learning.Although he has written widely and is highly-regarded in the academic community, his unique gift isthe ability to convert ideas to practice and make a real difference in the effectiveness of learning

initiatives in organizations.” November 19, 2010

Tim Baldwin,

Eveleigh Professor of Business Leadership,Kelley School of Business

mailto:[email protected]



http://www.linkedin.com/profile/view?id=17084513&authType=name&authToken=mjsm&goback=%2Enpv_34176097_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1


http://www.linkedin.com/profile/view?id=31429448&authType=name&authToken=jiAx&goback=%2Enpv_34176097_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1


http://www.linkedin.com/profile/view?id=4185832&authType=name&authToken=wKQ_&goback=%2Enpv_34176097_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1








Only 15-30% of training

transfers into actual use on

the job to improve

performance.

In today's lean-budget world, thebottom line is that training will not b

supported if it doesn't get results. So

you want your customers to keep

"buying" then you have to figure out

how to make the learning transfer int

tangible results.

The problem is transfer of training-- only 15-30% of

training transfers into actual use on the job to improve

performance.

Here's how I see it. Last year organizations spent $134

BILLION dollars on training in the U.S (according to

ASTD). That means that somewhere around $100

billion of it was wasted!!! And that is only the direct costof training--not the salaries of the people who sat in the

classroom. That alone is a huge number that ought to

get us alarmed.

But wait--it gets worse. Research also tells us that an

8:1 return on investment is pretty typical for good

training. That means that the $100 billion we wasted

would have returned about $800 billion in performance

improvement if we had done the right things to make

training transfer happen.

Throw in some money for all the wasted wages and

salaries of the trainees and we have a TRILLION

DOLLAR TRAINING PROBLEM. That's right.....each

YEAR we waste as much money as the U.S.

government is spending to bail out the banks, AIG and

the automakers.....EACH YEAR I said.

Imagine what the cost is worldwide.....the cost must be

staggering.

I am fed up with accepting this in our profession. It is

way past time that we got better. No other profession

could get away with telling their CEO they are wasting

70-85% of the money they spend...why should we.

It doesn't matter whether you are an in-house training

department or an external solution provider, we all serve

customers who make a decision whether to "buy" ou

training. For in-house training departments, these

customers are inside our organizations and they "pay"

with their employees' time. For external providers, o

course they pay our bill.

So the key question is "What will keep your customer

"buying" your training?" There is only one answer--the

performance change that results from the training.

http://www.learningtransferguru.com/2009/04/trillion-dollar-training-problem.html

http://www.learningtransferguru.com/2009/04/trillion-dollar-training-problem.html





www.LTSGlobal.com

1-888- 877-9531

Learning has the power to

transform organizations and

trainers are the professionals

charged with the responsibilityto make it happen.

As I teach and talk about the transfer problem I find a lot

of resistance from trainers. Many will say "It´s not my

job...I only control what goes on in the training room."

While I understand their perspective, and agree that it´s

a shared responsibility, at the end of the day somebody

in the organization has to be accountable for making it

happen. If not us, then who?

I think one of the keys to solving the transfer problem is

getting clear on who is accountable for it. Right now it

often falls through the cracks because managers think

its training's responsibility and training thinks its not all

their responsibility.

I think what we are talking about here is leadership....is

training going to be the leader in making transfer

happen? Most leaders are accountable for things they

don't fully control, but they can influence.

If we don't step up in organizations and take

responsibility for LEADING the transfer solutions then I

think we will never solve the problem. Yes, there are

many other players in the transfer process, but at the

end of day only one part of the organization is

accountable....and I think it has to be training. We are

the custodians of the intellectual capital of the

organization so we need to make transfer happen

regardless of who else is also involved.

The time for the excuses that we don't CONTROL the

whole process is past....we have to make transfer

happen.

No Country Is Immune From This Huge Problem

Yesterday we had a meeting with our distributors from 8

different countries in North America and Europe. It was a

great meeting as we talked about our clients and the

transfer issues they are facing

What really struck me was that the issues are the same

whether the client is in Austria, Romania, PolandGreece, Spain, Portugal, Canada or the USA. For all o

them, learning transfer is a HUGE problem that clients

are desperate to do something about

Our research over the last ten years certainly says the

same thing. After administering our Learning Transfe

System Inventory (LTSI) to over 6,000 people in 20

countries, the results are remarkably similar. We neve

expected to find this as we thought cultural differenceswould play a bigger role

Our conclusion is that 1) the learning transfer problem is

a universal one, leaving no country untouched; and 2)

that we have to find solutions that work globally. As fo

part 2, we're working on it!

http://www.learningtransferguru.com/2010/07/learnng-transfer-universal-problem.html

http://www.learningtransferguru.com/2010/07/learnng-transfer-universal-problem.html

http://www.learningtransferguru.com/2009/09/whos-responsible-for-making-transfer.html





www.LTSGlobal.com

1-888- 877-9531

If CEOs decide to champion learning

transfer change, they will need HR

as a committed partner so they

tend to tread lightly.

What Your CEO/CFO Doesn't Know CAN Hurt Them

My first job after I received my MBA in Finance was as a

financial analyst with DuPont. Most of my job was

analyzing possible capital investments and acquisitions

to determine if the company would earn a financial return

high enough to justify the investment. So I learned a lot

about how CFO's and CEO's evaluate financial returns

from investments.

The range of returns on investment they see are quite a

bit lower than the returns from learning investments.

Consider a few examples:

• The historical return in the U.S. stock market is

around 10%.

• Wal-Mart, the largest U.S. company, has a

return on assets of 9.15% and return on equity of 22.5%

• ExxonMobil, the second U.S. largest company,

has a return on assets of 8.49% and return on equity of

19.9%

• Royal Dutch Shell, the largest company outside

the U.S., has a 5 year average return on assets of 9.3%

and return on equity of 20.7%

As you can see, CFO's and CEO's live in a world of

small investment returns compared to what we can

achieve through learning! But because they are used to

much smaller percentage returns, they can totally

overlook the learning transfer problem in their

organizations.

Let me illustrate with a little math. Suppose we run a

training program for 20 people that costs the

organization $20,000--roughly $1,000 per person in

direct costs and lost productivity. Now, suppose only

10% of the people transfer their learning--that's only 2

people. In order to earn a 20% return on investment-

which a CFO/CEO would typically be quite happy with-

all they have to do is make the company $2,000 each as

a result of their new skills! And if 30% of the learners

transfer their learning (6 people), they only have to make

$666 each!

I apologize for all the math but this illustrates why the

learning transfer problem flies under the radar in many

companies. Because the truth is, the POTENTIAL return

from that $20,000 investment was $160,000 if done

correctly!

But, CFO's/CEO's don't live in a world of 800% returns

or even 100% returns. Because they view the world

through a 10 - 20% lens, they are easily seduced into

thinking their training is really working when its not.

They totally miss how how big the learning transferproblem is and how much money they are losing from

poor transfer.

Its time we educated our CFO/CEO's on what they are

missing. Learning remains one of the most powerfu

investments an organization can make with HUGE

http://www.learningtransferguru.com/2010/10/why-cfos-and-ceos-overlook-learning.html





www.LTSGlobal.com

1-888- 877-9531

potential returns--but only if strong learning transfer

happens.

Your Organization May Have The Virus And Not

Realize It

I was talking with a training colleague of mine recently

who was starting up a new company. He said "We are

not going to call it a training company." When I inquired

why he responded, "Because training has such a bad

reputation and we no longer want to be associated with

that business (even though he would continue to do

similar work.)." He continued, "Training often doesn't get

results so customers are reluctant to buy more training--

so we have to call ourselves something different."

I have been in the learning/training business for almost

30 years and his comments really hurt--but I had to

acknowledge that he was right. The track record for

getting performance change from training IS poor. So I

can't really blame him for trying a different marketing

strategy.

I fear that this lack of performance results has become

like a virus in our profession and it has reached epidemic

proportions. This virus lurks inside our training

organizations, infecting every program while we busily

go about the business of offering training/learning

events. And just like a virus in our body, the training

system grows weaker and weaker over time.

The frustrating part for me is that I know it doesn't have

to be this way. I love training and learning and we should

be proud of it. But I also know that we need to do some

things differently.

There is a cure and it is called transfer of

learning/training. We know how to stop the epidemic bu

training organizations have to WANT to be cured. There

are even "vaccines" available to prevent this virus from

spreading. Have you had your shots yet?

Documents

The Trillion Dollar Training Problem