The State of Enterprise Learning

Why Learning is a Top Priority for Staying Relevant

The world used to be predictable. We could predict the future and build training programs to support the necessary skills. Today, that’s nearly impossible — we can barely predict which companies will survive. Since 2000, 52% of the S&P 500 companies have disappeared and another 40% are predicted to vanish in the next 10 years. On top of that, Gartner predicts that one-third of jobs will be replaced by software, robots, and smart machines by 2025. CEOs of today’s largest companies are worried. Technology adoption is one thing, but preparing your employees with the skills to adapt is even harder and has become a top priority. Companies will struggle to remain relevant and competitive if their employees aren’t continually learning, adapting and updating their skills, and becoming experts in new technologies. We ultimately need “new organizations” and better, more modern approaches to building enterprise learning cultures.

After three years of struggling to drive employee engagement and retention, improve leadership, and build a meaningful culture, executives see a need to redesign the organization. — Global Human Capital Trends 2016, Deloitte University Press

Learning is at the heart of this. Today, learning in the enterprise is broken and fundamentally needs fixing.

“There is a need to retool yourself, and you should not expect to stop… People who do not spend five to 10 hours a week in online learning,” he added, “will obsolete themselves with the technology.” — Randall Stephenson, CEO & Chairman, AT&T

Why Enterprise Learning Has to Change

There are several trends that are forcing enterprises to rethink how they develop talent and why current infrastructure won’t cut it:

Growth of New Technologies — A Cambrian explosion of new technologies has made it increasingly difficult to stay on top of new software. The Economist made the perfect analogy to describe why such a technology explosion is happening:

One explanation for the Cambrian explosion 540m years ago is that at the time the basic building blocks of life had just been perfected, allowing more complex organisms to be assembled more rapidly. Similarly, the basic building blocks for digital services and products — the “technologies of startup production”, in the words of Josh Lerner of Harvard Business School — have become so evolved, cheap and ubiquitous that they can be easily combined and recombined.

Talent & Skill Gaps — While it’s debatable whether there is an actual talent shortage, no one can argue that our workforce has the necessary skills today for our rapid technological change. What’s scary is that more than $171 billion is spent each year on enterprise learning systems in the US alone. The problem is, new skills aren’t being developed because the delivery and structure of these programs are outdated. According to an Accenture Skills Gap Study, only 21% of 1,000 employed and unemployed respondents reported “developing new skills in the past five years through formal training programs offered by their companies.” This limited access to training is not helping to close the skills gap:

For companies, skills shortages are increasingly common. Despite growing unemployment in many countries, organizations from almost every industry are struggling to find people with the capabilities they need to deal with changing technologies, markets and customers. — Accenture’s Outlook on the Learning Enterprise.

Digitalization & Business Innovation — Successful businesses today focus on digital and business model innovation. TechCrunch wrote an article, “The Battle is for The Customer Interface,” that sums up where the future is heading:

Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.

These are companies that are taking real market share away from those still stuck with traditional business models. To effectively compete and transform digitally, employees will need new skills, technologies, and a continuous learning mindset — you can’t expect employees to help you digitally transform with the skills they have today. The importance of this shows in the stock market. The Chief Learning Officer of Wipro, Abhijit Bhaduri, summarizes this with the following comparison in his blog post,Digital Dreams’ Decade:

On 21st July 2015, Facebook’s market cap stood at $275 billion, about $1.5 billion larger than the market cap of GE and about $18 billion higher than JP Morgan. Facebook’s market cap is now $40 billion larger than Wal-Mart’s. What makes this dramatic is that Facebook was incorporated in March 2004 and their employee base early this year was 10,000. GE with more than 307,000 employees was incorporated in 1892 and is the only one of the original companies still listed on the Dow Index. It is not about comparing organizations. It is about comparing mindsets. The digital decade ahead will be driven by a new set of rules that will be hard for many organizations to adapt to.

Automation & Rise of A.I. — There is a huge debate whether the rise of robots, A.I., and automation at new levels of scale will hurt employment or give rise to new opportunities for employees. Regardless of either outcome, employees will need new skills to adapt and ensure their skills are relevant as jobs and functions are completely displaced by computers and machines. An MIT Technology Review article, “How Technology is Destroying Jobs”, describes how there is a fundamental paradox now:

MIT Technology Review: “How Technology is Destroying Jobs”

Productivity (in terms of output) used to grow in parallel to employment. What we’re seeing now is their decoupling. Why?

Productivity is at record levels, innovation has never been faster, and yet at the same time, we have a falling median income and we have fewer jobs. People are falling behind because technology is advancing so fast and our skills and organizations aren’t keeping up.

Proliferation of Online Learning — Learners today are circumventing traditional training and talent development initiatives. They’re turning to the proliferation of online learning resources that have emerged and spread over the past 10 years. The majority of learning in an enterprise doesn’t happen through training — it happens continuously throughout the day. Approximately 80% of learning is completely informal and organizations today have no way of scaling those knowledge silos that could be incredibly value to the rest of the team.

Online learning has proliferated thanks to MOOCs — Massively Open Online Courses that are provided by Universities and increasingly from corporate universities. Take a look at the growth from late 2011 from Universities alone:

Source: Class Central via “MOOCs in 2015: Breaking Down the Numbers

Now there are MOOCs from tech companies such as the Acquia Academy for Drupal training, coding bootcamps from new skills academies like General Assembly, and curated and technical team learning platforms like what we’re developing at Outlearn. Then there are blogs, podcasts, articles, research reports, videos, and other content mediums where people go to learn throughout the day.

These are fantastic resources, but what we have are individuals going out to learn on their own and not bringing back that expertise to their teams. Companies have realized this trend and see it as a huge opportunity. Everyone has a passion and ability to mentor or act as a teacher. Leaders in talent development, like Google, have recognized this and focus on democratizing learning — 90% of training is delivered by peers. Education in the enterprise can no longer be 100% centralized.

Learning is a Top Priority

Those are the primary drivers for why learning has become a top priority amongst executives in the enterprise. According to Deloitte’s 2016 Human Capital Trends report, 84% of executives rated learning as important or very important.

In today’s business environment, learning is an essential tool for engaging employees, attracting and retaining top talent, and developing long-term leadership for the company.

Learning as a top priority is also indicative of recent venture capital funding that’s been invested. According to CB Insights, $3 billion was invested in educational and learning startups in the first half of 2015 alone. Nearly $1 billion of the investments were focused on the enterprise market.

A greater need for improved learning isn’t just in the United States, the importance is seen across the globe. Take a look at additional data from the 2016 Deloitte Human Capital Trends Report:

How Enterprise Learning Culture is Changing

If those are the challenges we face, then what are the transformations that are starting to take place to address the necessary change? By spending hundreds of hours connecting with L&D folks and engineering leaders, we see the following trends emerging that are necessary to transform and modernize enterprise education:

  1. Informal & Continuous Learning — Approximately 80% of learning happens informally, all the time. Training that happens once a quarter, or month, isn’t timely enough to address problem solving that happens on a daily basis. The future of learning happens anywhere, at anytime, all the time.
  2. Democratized Learning & Teaching — Everyone has something to teach someone else. We’re all becoming micro-experts and should be rewarded and encouraged for teaching our peers. We need to leverage the collective knowledge and ongoing learning that happens everyday on teams. The future of learning is from one-another, not from a centralized department.
  3. Commoditization of Education & Knowledge — The proliferation of online learning resources has commoditized knowledge. While an incredible resource, the challenge is now sifting through countless resources to find the best and most relevant. The future of learning is online and curated.
  4. Self-Directed Learning — No one enjoys sitting through narrated power point presentations with adversarial, legacy LMS platforms. It’s not the way people like to learn, nor is it the optimal way for them to learn. The best learning is self-directed and can be consumed at the learners’ own pace. The future of learning is a culture to develop, not a top down mandate.
  5. Reinvention of Careers & Positions — New roles are being created all the time in response to new technologies. Cloud developers and data scientist didn’t exist 10 years ago. We need to rethink how we develop our careers, develop our organization’s talent, and encourage curiosity.The future of learning looks more like “People as Apps” that continually need to be updated.
  6. Context is Critical — Especially with technology, there are usually several ways of doing things. General courses won’t show you how to do things the way your team or organization implements a specific technology. Simply providing courses to consume won’t cut it. The future of learning is contextualized, guided content for your employees and company.

Fix Learning & Build a Culture of Curiosity

Fixing learning won’t simply come from the adoption of a new LMS, a new hire, or mandate — it will come about by building a learning culture, fostering curiosity, and empowering everyone to be part of the teaching or mentoring process. It can also be one of the highest leverage activities you can focus on as a manager or leader on your team. Just take a look at the napkin math from Andy Grove, iconic former CEO of Intel, from his book High Output Management:

Training is, quite simply, one of the highest-leverage activities a manager can perform. Consider for a moment the possibility of your putting on a series of four lectures for members of your department. Let’s count on three hours preparation for each hour of course time — twelve hours of work in total. Say that you have ten students in your class. Next year they will work a total of about twenty thousand hours for your organization. If your training efforts result in a 1 percent improvement in your subordinates’ performance, your company will gain the equivalent of two hundred hours of work as the result of the expenditure of your twelve hours.

For more specifically on fixing learning for technical teams, you can read Outlearn’s Professional Developer Manifesto.

Conclusion

Enterprise learning and talent development is broken. This is especially true for technical teams whose success depends staying relevant on new technologies. Traditional training is no longer cutting it for organizations who ambitions to stay relevant and effectively compete in our dynamic economy. Talent development is being recognized as a top concern and priority across enterprise teams. The question is how fast will these enterprise teams be able to make a shift to more agile approaches to learning that are more continuous, democratized, and fundamentally focused on capturing the 80% of informal learning that happens constantly. Teams will need to shift towards cultivating learning cultures like Google where 90% of training comes from colleagues who are teaching one another, rather than relying on centralized training.

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