Continuous Improvement of Learning and Development

I was reading through some research on how businesses are evolving their approaches to learning and development. A figure caught my attention: $1,111. This is how much businesses spent per person on training in the year 2020. What struck me, aside from the handsome arrangement of the number one, was the thought, “Still?” This was in contrast to the figures of $2,000 to $3,000 per employee per year that I heard again and again, back in the early 2000s.

In those days I helped organize several study missions to Japan for clients each year. We would visit 5-8 companies during the course of a week. They ranged from world-class and 20+ years on the continuous improvement journey to 5 years in and able to show the real joys and struggles of transformation. As invariably, they would answer the question or volunteer information regarding what they spent on employee learning development. The $2,000 to $3,000 figure was the spend pertaining directly to continuous improvement. Twenty years later, there’s still quite a gap between that and the $1,111 for training in all subject areas.

How Many Hours of Training Does it Take to Pay Back?

One reaction to seeing these figures may be, “Is it really necessary to spend more than $2,000 per employee..?” to succeed in building a continuous improvement-focused learning organization. There’s no single answer for all organizations and all contexts. But on those trips to Japan, someone always asked this question. The answer was surprising and revealed some differences in how the visitors were thinking about training. In short, much of the $2,000 to $3,000 figure was a budget per employee for recognition, reward, and celebration of their improvements. Sometimes it was paid as a bonus, but more often it was a $5 gift card for an improvement suggestion, or a group field trip or dinner to celebrate the completion of a project.

They arrived at this figure by working out what they needed to spend in order to keep people engaged in continuous improvement and make the scheme self-funding. How many hours of training were needed to get people the basic improvement knowledge, skills, and tools? What savings they could expect in aggregate? What financial incentives fulfilled people’s need for recognition, without turning it into a money game? While this seemed complicated to some of our group, it was just a matter of doing the math.

What Will It Cost Me to Keep You Interested?

One well-known automotive firm flatly told us that they aimed to pay out $3,000 per employee in improvement-related funds because their data showed that on average, the kaizen ideas of each person saved this much per year. Why not spend $1,000 and pocket the difference? Multiplied times tens of thousands of employees, that’s real money. You could hear the wrong gears turning in the minds of our tour group.

The answer from our host company was that they mainly wanted people to stay engaged in their work year after year, not to squeeze out another $100 per person in profit. By keeping people interested in improving safety, quality, and productivity, they not only made steady long-term gains. They also avoided complacency, inattention, and carelessness that could lead to large accidents, defects, or equipment breakdowns. While it was harder to correlate an accident that didn’t happen with the money spent on training, their safety and equipment loss data showed that the training more than paid for itself.

What’s the Right Amount of Learning and Development?

Back to the figures from the research paper. On the one hand, the spending per person has grown only modestly. On the other hand, the hours have grown by double-digits per annum over the past decade. It grew to about 55 hours of training per person in 2020, up more than 30%. That year may be an anomaly, but there is a longer-term trend. This is thanks in part to the adoption of online courses, webcasts, and virtual and blended learning. Studies show that investment in learning and development is one of the main things the younger generation wants from an employer. These are good trends.

When it comes to corporate training, it’s not a matter of “more is better”. While we can all benefit from more learning and development, in a business it’s important to define the right amount. We can’t take on many new ideas at once. A project that is too large may overwhelm us. Managing too many tasks makes us unproductive due to context switching. It’s much easier to get started when we know what’s the one right thing to work on, and perhaps the next one after that. Studies show that when adults are taught things we don’t use right away, we’re less likely to retain what we learned.

Just-in-Time Learning?

In lean management terms, people do their best work when they can organize their work in a customer-paced one-piece pull.  When we break down a larger task and connect our work to the customer demand signal., we can work on the one right thing, and then the next one.

There is a similar trend in training. It’s called microlearning. Back in the day, we would sit through hours or even days of training on a subject such as statistical process control, because that’s how we could book the trainer. Maybe the learner didn’t want to block off their whole day or sit for hours, but the training delivery mechanism dictated this. It was a push system. Today, a new generation of workers has grown up with YouTube and other ways to grab small bits of knowledge on-demand, just-in-time.

The challenge for corporations, and training designers like Gemba Academy, is to figure out what’s the right amount of the right thing, in terms of learning. We think we have a pretty good idea of the “what“. We’ve been working on moving from 15-20 minute videos toward 5-10 minute modules. The microlearning trend suggests that these lessons may need to be much shorter. This challenges our thinking about how we present these ideas, as well as how the learning experience is designed. This will require a combination of listening closely to customers and examining our set-up times, other batch-mode barriers, and other internal transaction costs.

Treating Learning and Development as Strategic Pillars

One of the most important questions a leader must answer is, “How do I get everybody working on the right things?“. Too often corporate training is “do things right.“. It’s driven by the need to be safe and correct in the handling of materials or information, to follow regulations, or simply to enable new hires to function in their jobs. These things are necessary, but barely sufficient to remain compliant with standards. It’s more fun when people understand the reason behind the need for the training and can shape the process and policies to secure that need. Regardless of what we call the training and development in continuous improvement, the organizations whose leaders find practical answers to this question are those who prosper in the long term.

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